The year's final months mark open enrollment season for health insurance, and Medicare is no exception. However, if you haven't updated your Medicare coverage, now is the time to act, as enrollment closes on December 7th. Below, we have prepared a brief guide on what open enrollment for Medicare entails and what changes you can make.
What is open enrollment?
Medicare open enrollment is for those with Medicare coverage who want to elect changes to their benefits for the following calendar year, 2023.
During this time, you must decide whether or not you want to use Medicare or Medicare Advantage. Additionally, you can elect to signup or unenroll from a supplemental plan with prescription drug coverage.
For those unfamiliar, a traditional Medicare plan through the Government provides hospital and medical insurance coverage, known as Medicare Parts A & B. Medicare Advantage is private insurance coverage that offers Parts A, B, and D, the latter of which includes drug coverage. Those who elect for the public Medicare option can choose Part D as a supplement and add Medigap coverage to help cover out-of-pocket costs.
Public or Private?
The big question for Medicare enrollees during open enrollment is whether or not they want to utilize the traditional public option or a private Advantage program. With traditional Medicare, you can see any doctor who accepts Medicare in the United States and will pay 20% of any bill after meeting your annual deductible, plus your monthly premium for Part B coverage. Notably, there is no out-of-pocket maximum that limits your annual medical expenses.
While some may elect to add Medigap coverage to help cover expenditures that arise from medical treatment, others may want to consider an Advantage plan. With these private option plans, you pay your Part B and private insurance premiums but no longer need Medigap coverage since you have a maximum out-of-pocket cap on health expenditures. Plus, you usually will have coverage for any prescription drugs.
Notably, Medicare Advantage plans can limit which providers you can see and usually require referrals to see a specialist. Only you can decide which option is best for you, as everyone's circumstances are different.
Longterm Care Is Not Part of Medicare
It is important to note that Medicare does not cover daily care expenses associated with nursing homes, assisted living homes, or in-home care for personal assistance not deemed skilled care. If you don't require professional nurse care but still need aid in completing your daily activities, this is where long-term care insurance comes into play.
Generally, the optimal time to buy long-term care coverage begins around age 60 and ends around the Medicare enrollment age of 65. Still, you can usually buy a policy if you are younger or older than these ages, the former being more cost-effective and the latter being more expensive.
If you do not have a long-term care policy but are interested in learning how it could fit into your financial plan, please set up an appointment with us today. We strive to understand every client's needs and ensure they create an optimal retirement, health, and estate plan. So, we will look forward to talking with you soon!
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