by Scott Christianson, CFP®
Executive Vice President
Portfolio and Wealth Management
With summer winding down and fall ramping up, many households are looking towards a change in the seasons and fall activities. For those older than age 65 and on Medicare, an annual review of medical insurance coverage may reduce medical costs over time.
Open Enrollment
Each fall, Medicare enrollees can review and reassess their healthcare needs and current Medicare coverage for the coming year. From October 15 until December 7, participants can switch from Original Medicare to a Medicare Advantage plan (or vice versa), move between Medicare advantage providers, make adjustments to a prescription drug plan and address other impactful changes. Changes made during this open enrollment period go into effect on January 1 of the following year.
Considerations for Open Enrollment
Shopping for Medicare coverage can be daunting with a plethora of options and industry jargon to decipher. When reviewing options, here are some points to consider:
Out-of-pocket costs including premiums, copays and deductibles.
Prescription drug coverage for medication needs as well as eligibility requirements.
Expected changes in health care needs, providers or significant medical procedures in the coming year.
Breaking Down the Parts of Medicare
Medicare coverage is broken down into four distinct parts, each providing a different level of coverage and benefits.
Medicare Part A: Covers inpatient hospital stays, limited stays in a skilled nursing facility, hospice care and some home health care.
Medicare Part B: Covers certain doctors' services, outpatient care, medical supplies, and preventive services.
Medicare Part C: Also, known as Medicare Advantage, Medicare Part C plans are a type of Medicare health plan offered by a private company that provides both Part A and Part B benefits. Most Medicare Advantage Plans also offer prescription drug coverage.
Medicare Part D: Helps cover the cost of prescription drugs.
Medicare Costs
While Medicare coverage limitations and rising costs are typically the focus of the news, the Inflation Reduction Act, which passed in August of 2022, included authority for the Secretary of the Department of Health and Human Services to negotiate pricing for select drugs directly with manufactures. The initial list of drugs slated to be impacted was recently released, but the pricing is not applicable until 2026. Over time, these price curtailments are likely to mitigate Medicare Part B increases.
Other Resources
Choosing the right type of Medicare coverage can be a daunting process. There are, however, many resources available. In this video, Samantha Pahlow, CTFA, AWMA, shares important information on enrolling for Medicare and how to avoid the financial pitfalls of not enrolling in a timely fashion.
Medicare brokers and agents can be another valuable resource to help navigate options in certain areas. These Medicare specialists can provide specific advice and assist with enrolling in the optimal plan for a person’s needs. This advice is typically a free benefit to enrollees as the cost for each plan is the same if purchased through a broker or agent or directly through insurer.
Details and resources for specific plans are available at www.medicare.gov, including a personalized side-by-side comparison between plans.
Understanding healthcare costs today and in the future is a critical component of retirement planning. As changes occur, assumptions in retirement planning and budgeting can also be affected. Your portfolio manager and wealth planning team are available to help you navigate your decisions and address how they impact your plan.
Ferguson Wellman, Octavia Group and West Bearing do not provide tax, legal, insurance or medical advice. This material has been prepared for general educational and informational purposes only and not as a substitute for qualified counsel. You should consult qualified professionals to understand how this information may, or may not, apply specifically to you.