Medicare Update

11:18 AM PDT

Olympia, WA

For Seniors, it’s that time of year again…open enrollment for Medicare! Tune into the channels more frequented by the older generation and it seems every other advertisement is targeting Medicare options. Every year between October 15th and December 7th, Medicare offers what is called Open Enrollment.  During this time period seniors can change their options on Medicare coverage.  

During open enrollment, one can switch or drop a plan, change from or to Medicare Advantage, and change Part D drug coverage.  These changes come into effect on January 1st of next year.

First, let’s review some of the Medicare basics.  It is a national health insurance for those disabled and age 65 and over. It consists of Part A (Hospitalization and Major Medical), Part B, (Conventional Medical Insurance), and Part D (Pharmaceutical).  Parts B and D have premiums which can vary based on your income.  And Part C, called Medicare Advantage, replaces both Parts A and B.

If you have not already signed up for Social Security, you will need to make sure to sign up for Medicare during the initial enrollment period.  This period is 3 months prior to turning age 65 to 3 months after.  Miss the initial sign up and you’ll be saddled with a lifetime penalty of 10% each year! It is best to sign up early if you want benefits to begin upon reaching age 65.

Recently, the trend has been that employers have made Medicare the primary payer.  Unless your employer coverage is a group plan with at least 20 employees, it is recommended to establish your Medicare coverage.  Your employer’s HR department should be able to advise you regarding this aspect of your coverage.

Everyone qualifies for Parts B and D if they are a US citizen or legal resident for 5 years.  Keep in mind spouses may need different Part D plans based on the drugs they are taking.  Go to https://www.medicare.gov/plan-compare/#/?year=2023&lang=en for assistance in selecting the best Plan D options for you.

A Medigap policy is supplemental insurance covering the gaps in Part A & B coverage.  If you did not initially purchase a Medigap policy at age 65 but later do so, pre-existing conditions may be denied. No supplemental policy is allowed when enrolled in Medicare Advantage.

Getting back to Open Enrollment, what are the things that one should consider? Should you choose Medicare Advantage or traditional Medicare? Medicare Advantage is offered by private insurers who contract with Medicare.  Several options are available.  The best places to explore differences would be www.medicare.gov/find-a-plan and https://www.ehealthinsurance.com/medicare/parts/medicare-advantage-vs-medicare-supplement-plans/.

If you have 2 homes or are a frequent traveler, it is best to check Medicare Advantage plans carefully to make sure you have coverage outside of your provider network. Also, if traveling overseas Allianz has a reasonably priced policy (about $400 per year) providing coverage that otherwise may be denied.

Parts A & B plus a Medigap policy will generally provide better coverage than Medicare Advantage.  However, the premiums are higher.  Your individual circumstances will determine which is the best option for you.

Finally, the dreaded donut hole is scheduled to be eliminated as part of the Inflation Reduction Act.  This is where your prescriptions get more costly once your annual drug costs exceed $4,660.  The donut hole is expected to be eliminated completely in 2025.

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