Medicare – What You Must Do Right Now

If you are on Medicare, it is that time of the year again!  It is time to review plans to ensure you are on the best plan and making changes could save you thousands of dollars. 

  1. Deadline for making changes for 2020:  Medicare open enrollment begins on October 15th and ends on December 7th.
  2. Options for Medicare:  You have two main choices:
  1. Original Medicare. With Original Medicare, you will want to add a Medicare Supplemental (Medigap) plan and a Part D Prescription Drug Plan.  This option is best if you’re going to pay a set monthly premium and have little or no out-of-pocket cost throughout the year for medical. You will have copays/deductibles with Part D prescription plans.  It is advantageous for people to choose this type of coverage when they travel outside of Alabama and for people who want to select their doctors without needing referrals or being restricted to doctors within a plan network.
  2. Medicare Advantage Plan. With Medicare Advantage Plans you combine Part A, Part B, and usually Part D coverage, and these plans act as an HMO or PPO. Depending on what plans are offered in your area you can have the choice of a plan with no or very low premiums. With Medicare Advantage plans you share the costs of your medical and prescription care. For example, you will have doctor copays and deductibles each time you see your physician or go to the hospital. Each plan has a different maximum out-of-pocket cost, so you should carefully compare the Advantage Plans available in your area for the amount you would pay for copays, deductibles, and annual maximums.  You also need to check with your physician to ensure he/she accepts your plan. These plans are best if you are healthy and rarely visit the doctor, and you are comfortable knowing you’ll share the costs of all doctor and hospital visits.
  1. Major changes in 2020: If you are a current Medicare recipient, you can no longer enroll in Plan C or F – these are Medicare Supplemental Plans that were considered the “Cadillac” plans and they are closed to new enrollees except if you are first eligible for Medicare between now and the end of 2019.  If you want a similar plan, then Medicare offers Plan G, and it is available to all Medicare recipients.  Plan G provides the same benefits of Plan F, except you have to pay the Part B deductible out of pocket each year.  The Part B deductible in 2019 was $185 annually, but the deductible has not been announced for 2020. 
  1. Part D – Rx Plans:  If you are choosing a stand-alone drug plan with original Medicare, then be sure to carefully review your prescriptions and choose the best plan that matches your needs.  Part D plans can change their formulary each year, so you want to be sure your prescriptions are covered by your plan. Also, be aware of each plan’s preferred pharmacies where drug pricing can be much lower than non-preferred pharmacy pricing. Be careful when identifying whether you take the brand or generic prescription drug because this can make a significant difference in your drug costs. Some individuals have saved $25 to $50 per month just on their Part D premium by switching to a plan that best fits their needs. But that’s only part of the story… having the wrong plan could cost you thousands in out of pocket drug costs.
  2. Importance of Reviewing your Plans:  Remember, you can save thousands of dollars per year in some cases by carefully choosing plans based on your specific health and financial situation. Your best research tool is Medicare’s website where you can input your personal data, and they’ll help analyze which plan is best for you. 

Follow The Welch Group every Tuesday morning on WBRC Fox 6 for the Money Tuesday segment.

WBRC Fox 6 Talking Points

“Medicare – What you need to do now.”

  1. Deadline to Make Changes – December 7, 2019
  2. The best option for you
  3. Importance of Reviewing your plan

Kimberly Reynolds, M.S., CFP®, is a Partner and Senior Advisor and also serves as the Director of Financial Planning at The Welch Group, LLC, which specializes in providing Fee-Only investment management and financial advice to families throughout the United States. Kimberly is a graduate of The University of Alabama and holds a Masters of Science in Human Environmental Sciences with a concentration in Family Financial Planning and Counseling and is a CERTIFIED FINANCIAL PLANNER™.  In addition, Kimberly served as an Adjunct Instructor in Tax Planning and Management at The University of Alabama for five years. For more information, visit The Welch Group. Consult your financial advisor before acting on comments in this article.