By John Halterman
Just as getting a driver’s license seems to occupy the mind of every almost-16-year-old, enrolling in Medicare occupies the mind of everyone nearing retirement. The problem with Medicare, a federal insurance program designed for people age 65 and older, is that it often seems complicated. One of the things that makes it so confusing is that applying for Medicare isn’t a one-time event that you can just forget about as you move on with life.
How can you make sense of the various plans and enrollment periods and make the best coverage decision for your life, health, and wallet? Let’s go over some basics.
Who Is Open Enrollment For?
Medicare open enrollment is for people who are already a part of the Medicare system. Even if you have only signed up for Parts A and B, you can still take advantage of open enrollment.
If you have not yet enrolled in Medicare, then open enrollment does not apply to you. Your initial enrollment period is based on your birthday, not a set date on a calendar. You need to sign up for coverage during the window of time that starts three months before the month of your 65th birthday and ends at the end of the third month after your birthday month, for a total of 7 months.
When Is Medicare Open Enrollment?
Open enrollment for existing Medicare participants, though, has nothing to do with your birthday. It is at the same time every year, and everyone currently enrolled can take advantage of it, even if you only began Medicare the month before. This year, open enrollment goes from October 15, 2019, to December 7, 2019. The decisions you make during that period affect your 2020 medical coverage.
In 2019 and the years following, there is a new open enrollment period for Medicare Advantage plans only from January 1 to March 31. (1) This open enrollment is more restrictive than the fall Medicare open enrollment. Also, it only applies to Medicare Advantage plans, so any other changes need to be made during the Medicare open enrollment that is fast approaching.
What Can I Do During Medicare Open Enrollment?
Medicare open enrollment is the annual opportunity that all participants have to change their Medicare coverage. Here are some of the changes you can make during open enrollment:
Enroll in Medicare Part C (Medicare Advantage) for the first time. If you currently have Parts A and B (Original Medicare), you can switch to Part C. Part C is contracted by outside companies and offers the same coverage as Original Medicare but can include even more services.
Switch back to Original Medicare (Parts A and B) if you currently have Medicare Advantage (Part C).
Change your current Part C plan to a different Medicare Advantage plan.
Enroll in or drop Part D prescription drug coverage.
Change your current Part D plan to a different prescription drug coverage Part D plan.
How Much Will This Cost Me?
The costs of Parts C and D vary depending on the plan you choose. If you’re looking at switching from a Part C plan to Original Medicare, then the costs will depend upon your income and how long you worked and paid into the Medicare system.
The standard premium for Medicare Part B is $135.50 for 2019. However, if your income is over $85,000 for a single person or $170,000 for a couple, then your premium will be higher. The range for high-income earners is from $189.60 to $460.50. (2)
Medicare Part A is free if you or your spouse paid into Medicare for at least 10 years, or 40 quarters. If you only have 30-39 quarters, it costs $240. The premium for less than 30 quarters is $437. (3)
What Should I Do During Open Enrollment?
The best Medicare choices for you will depend on your health and financial situation. Original Medicare is affordable and provides basic care. However, it doesn’t cover things like dental and hearing, which can be covered by Part C plans. Also, if you take medications, having the right Part D plan can have a big impact on your finances.
Medicare can be confusing, especially with the variety of Part C and Part D plans available to you. Also, you need to make sure that the plan you choose is compatible with your wealth strategy and you can afford the premiums without jeopardizing your future. Because of this, it’s helpful to work with an experienced professional when reassessing your Medicare coverage during open enrollment.
At Beacon Wealth Management, we understand that Medicare coverage is an important part of your overall retirement plan. As such, we are here for you as you evaluate your options and seek answers to your questions. If you’re tired of muddling through important retirement planning issues on your own, call (304) 626-3900 or email me at firstname.lastname@example.org to get our help!
John Halterman, best-selling author and nationally published blogger, has been featured as a financial guest expert on the shows of self-help gurus Brian Tracy and Jack Canfield, author of Chicken Soup for the Soul, and has appeared on ABC, FOX, BRAVO, NBC, CBS, and A&E. John is the expert host of the weekly WDTV News 5 segment “Solutions 4 Financial Independence.”
As an authority on wealth management, he has been invited by hundreds of institutions such as universities, federal agencies, professional associations, and large energy and utility corporations to be a guest speaker and educational event host. Event topics include retiring ready, managing down market investment risk, how to reduce your tax burden, and transferring your family wealth in the most tax advantageous way.
John is the founder and owner of Beacon Wealth Management, specializing in helping entrepreneurs, professional practitioners, and retirees overcome the 5 major challenges facing successful families. He is a warm communicator with a passion for helping people transform their financial futures. John understands the multifaceted set of financial worries people face as they become more successful and enter the Retirement Red Zone. He empathizes personally with each client and delivers a collaborative client experience that empowers people to reach their life goals.
With more than two decades of experience, John’s professional credentials include Certified Wealth Strategist, Accredited Investment Fiduciary, Certified Estate Planner, Chartered Federal Employee Benefits Consultant, Professional Plan Consultant, and Registered Financial Consultant. He is also a past member of Ed Slott’s Master Elite IRA Study Group.
A native of Weston, West Virginia, John served in the United States Air Force prior to becoming a wealth advisor. Today, he resides with his family in Clarksburg, West Virginia. He and his wife, Lisa, have been married since 2005 and have three amazing children. A family-oriented man, he enjoys giving back to his community, coaching youth sports, landscaping, architectural design, and playing racquetball.