By: Mark Thatcher, CRPC®
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 Should Take Note of Open Enrollment?
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.
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.
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:
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 financial plan 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 Cypress Wealth Services, we understand that Medicare coverage is an important part of your overall retirement plan. As such, we want to make ourselves available to you as you evaluate your options and answer any questions you may have about your insurance coverage or retirement plan. Contact one of our offices today or call us at 866.888.6563.
Cypress Wealth Services is an independent RIA firm providing financial planning and investment management to high net worth individuals, families, business owners, and institutions. Cypress Wealth Services comprises professionals with diverse backgrounds and extensive experience and qualifications. Cypress Wealth Services is uniquely qualified to serve a broad range of client needs, and their experience and expertise act as a foundation for their client service process. The firm uses The Second Growth, which focuses on efficiently protecting, growing, and transferring to their loved ones the wealth and legacy a person has already built. With offices in Palm Desert, CA, Tustin, CA, and Anchorage, AK, the firm serves clients across the country in Wealth Management Services, Fiduciary Services, 401(k) Design and Management, Investment Reporting Services, Financial and Retirement Planning, and more. For more information, visit www.CypressWS.com or call 760.834.7250.