If you are on Medicare, it’s that time of the year again! Now is the time to review your current plan and compare the options available to ensure you are on the best plan for your situation. You could potentially save thousands of dollars. There is a deadline for making changes for 2021, so don’t wait until the last minute. Here are some key points you need to know to help get you started.
Medicare open enrollment: Begins on October 15 and ends on December 7.
Options for Medicare: You have two main choices:
- 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 want 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.
- 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.
Changes in 2021: The great news is starting in January 2021, many will see lower premiums for their Part D plans and lower prescription copays for several drugs. Also, many plans have added telehealth services as an additional benefit for certain medical consultations.
Part D – Rx Plans: If you choose a stand-alone drug plan with Original Medicare, 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 plan covers your prescriptions. 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 it can significantly differentiate 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.
Importance of Reviewing your Plans
It’s a good rule of thumb to review your current plan annually. In some cases, you can save thousands of dollars per year by carefully choosing plans based on your specific health and financial situation. The best research tool is Medicare’s website www.medicare.gov 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”
- Deadline to Make Changes – December 7, 2020
- Best option for you and changes in 2021
- Importance of Reviewing your plan
Kimberly Reynolds, M.S., CFP®, is a Partner and Senior Advisor and serves as the Director of Financial Planning at The Welch Group, LLC, specializing 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.
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