Medicare Open Enrollment Starts October 15th ~ Here’s What You Need to Know

Maura Schauss |

The CFP® Team at Washington Wealth Advisors

As you work through your retirement checklist, did you get stuck on healthcare planning? An often overlooked transition to retirement is navigating Medicare’s enrollment options. To help you out, we offer a review of the Parts of Medicare with various enrollment options and periods to keep you informed. For those who are already enrolled, this is an ideal time to reassess your coverage to make sure it’s still the best fit for you. Open enrollment begins October 15th. 

The Four Parts of Medicare

Let’s review. Medicare coverage is divided into 4 parts and each part has different coverage levels:

  • Medicare Part A: Also known as hospital insurance, Medicare Part A covers inpatient hospital care and some nursing care coverage. If you or your spouse paid Medicare payroll taxes during your working years for at least 10 years, Part A is free for you. If you didn’t, you can still get coverage by paying a monthly premium.
  • Medicare Part B: Part B is medical insurance coverage for some medical conditions and preventative care, including doctor visits and other outpatient services. You will pay a monthly premium for Part B coverage. Together, Parts A and B are known as Original Medicare.
  • Medicare Part C: Known as Medicare Advantage Plan, this is an alternative to Original Medicare that is offered through Medicare-approved private companies. This plan bundles Part A and Part B and often includes Part D as well. Medicare Advantage plans also often cover additional services not covered by Part A, Part B, or Part D, including vision, hearing, and dental visits.
  • Medicare Part D: This is an optional private insurance add-on that includes drug coverage. Even if you don’t need prescription coverage when you are first eligible for Medicare, you may want to enroll in the plan to avoid extra long-term costs.[1]

Not Yet Covered by Medicare? Know Your Enrollment Period

Keep in mind that Open Enrollment is for those who have already enrolled in Medicare.

Your initial Medicare enrollment period is based upon your birthday, not a set date on a calendar. You need to sign up for coverage during the window of time beginning three months prior to the month you turn 65 through the end of the third month after your birthday – a total enrollment period of seven months. 

There can be permanent enrollment penalties if you do not enroll on time so do not miss this window unless you know you are exempt!

Already Covered by Medicare? Know Your Open Enrollment Options

The Open Enrollment period affects each part separately. Here’s what you can do with your Medicare coverage:

  • If you have Medicare Parts A & B, you can switch to Part C.
  • If you have Medicare Part C, you can switch back to Original Medicare or change to a different Medicare Advantage Plan.
  • If you have Part D, you can switch to a different Part D plan or drop your prescription drug plan.
  • If you don’t have Part C and Part D, you can use this time to enroll in Part C and Part D for the first time.

This year, Medicare Open Enrollment begins October 15th and remains open through December 7th. The decisions you make during this period will affect your 2023 Medicare coverage.

Know Your Medicare Advantage Plan Change Periods

Not only can you change your Medicare Part C (Medicare Advantage Plan) now, but also know there is the Medicare Advantage open enrollment period that occurs from January 1st to March 31st.  Those who have Medicare Part C have the opportunity to change to a different Part C plan or switch to Parts A and B. Any other changes need to happen in the October to December Open Enrollment period.

Medicare Part B Premium Appeals Process

Medicare premiums are based on your modified adjusted gross income (MAGI) that is provided to the IRS. To set your Medicare costs for 2023, Social Security will likely rely on the tax return you filed in 2022 that details your 2021 earnings.  You can ask Social Security to adjust your premium if a “life-changing event” caused significant income reduction or financial disruption in the intervening tax year — for example, if you retired or lost a job.  You’ll find detailed information on the Social Security web page Medicare Premiums: Rules for Higher-Income Beneficiaries.

Overwhelmed by Medicare Open Enrollment? We Can Help.

While it is true that choosing the right Medicare plan can be a complicated endeavor, it is also true that choosing the wrong plan could negatively impact your wealth management strategy.  Simply put, taking your time and shopping around for the right plan will benefit your health and medical needs while also benefiting your pocketbook.

The right Medicare advisor can help you reassess which plan will work for you. Then, we at Washington Wealth Advisors can help you incorporate your healthcare plan into your overall financial planning strategy.  Schedule a meeting with us, call 703.584.2700 or email clientservices@washingtonwealthadv.com to get started.

 

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Washington Wealth Advisors is a fee-only registered investment advisory firm serving busy families, executives, women building wealth, and small business owners. We provide Wealth Advisory Services—financial planning coupled with asset management—guided by a personalized investment strategy based on each client’s unique goals. Our independent advice, fiduciary approach, and proactive investment management help to support our clients’ overall financial peace of mind.

 


[1]https://www.medicare.gov/drug-coverage-part-d/costs-for-medicare-drug-coverage/part-d-late-enrollment-penalty