Allworth Co-CEO Scott Hanson shares a few important reminders as we approach Medicare's Open Enrollment period.
The proverbial window will soon be open.
If you’re like me, the above phrase elicits feelings of possibility and images of curtains billowing before an open window from a soft, spring breeze.
However, in this instance, I’m afraid, those images are a bit misleading.
That’s because this particular “window” is not spring-like, at all. It’s actually the Medicare Open Enrollment window for 2022. And not only is it about to begin, but the rules pertaining to all things Medicare are not likely to make you see possibility so much as make you see red.
However, with a little planning and preparation, Medicare, and all the rules and deadlines supporting it, can be managed to your advantage.
Just as a brief overview, started back in 1965 under the Social Security Administration and now administered by the Centers for Medicare and Medicaid Services, Medicare is our national health insurance program. And it ostensibly provides health insurance for folks aged 65 and up, but also covers some younger individuals with disabilities.
While it’s difficult to cover all the contingencies associated with signing up for and changing your Medicare coverage, here are some key enrollment basics that everyone should know.
Open Enrollment for Medicare runs from October 15th until December 7th (Pearl Harbor Day)
Medicare Open Enrollment, which is also referred to as Medicare’s Annual Election Period, runs from October 15th through December 7th each year. Basically, it exists to allow you to re-evaluate and, if you so choose, to alter or upgrade your drug and Medicare coverage.
Any changes you make to your coverage during the Open Enrollment period will take effect January 1st, 2022.
*Please note that while the Open Enrollment period officially ends on December 7th, if you’ve been impacted by any of the recent disasters (fires, floods, and severe weather, or anything FEMA declares a major disaster) we’ve experienced this year, there are extended enrollment opportunities.
Here are some specifics of what you can accomplish during the Medicare Open Enrollment period.
Change from Original Medicare to Medicare Advantage (with restrictions)
Change from Medicare Advantage to Original Medicare (with restrictions)
Move from one Medicare Advantage plan to a different plan
Switch from one Medicare Part D drug plan to another
Sign up for a Medicare Part D plan (if you didn’t sign up when you were first eligible)
And, of course, there are a few things that you can’t do during the Medicare Open Enrollment period.
For instance, Medicare Open Enrollment does not cover Medigap plans, as the rules governing these plans vary by state, and so those have their own unique enrollment periods and regulations.
Also, if you decided not to sign up for Medicare when you were initially eligible, you aren’t allowed to use the fall (October 15th through December 7th) period to sign up. (See below for additional enrollment periods).
But aren’t there other Medicare enrollment periods?
Yes, there are.
There’s the Initial Enrollment Period.
Your Medicare Initial Enrollment Period starts three months before you turn age 65, includes the month of your 65th birthday, and then runs for three months after your birthday month.
The good news is that’s seven full months to sign up for Medicare. The bad news is, if you fail to sign up, you could be hit with a late enrollment penalty.
Then there’s the Medicare General Enrollment Period.
The Medicare General Enrollment Period is for those folks who didn’t sign up for Medicare during their Initial Enrollment Period, and who aren’t eligible for any other special enrollment (see below). This period runs from January 1st to March 31st each year.
The last enrollment period I’ll touch upon is the Special Enrollment Period.
You may qualify for the Special Enrollment Period if you missed the sign up for your Initial Enrollment Period because you were still taking part in a healthcare plan sponsored by your (or your spouse’s) employer, or because you have a disability.
You may qualify to sign up for Original Medicare during an eight-month period that begins:
The month after your employment ends
The month after your group healthcare plan ends
There is one other question I sometimes receive, typically during one of our Social Security or retirement planning workshops, and that is, some folks who are nearing age 65 understandably want to know whether they will have to sign up for Medicare each year, or if it just continues throughout retirement?
The answer, I’m happy to say, is that once you’ve signed up for Original Medicare (or Medicare Advantage, Medicap, or Part D coverage), you won’t ever have to sign up again. But you should still evaluate your coverage every year to ensure it makes sense for your situation.
It almost goes without saying that Medicare (and Social Security) are integral parts of retirement and managing them correctly can save you time and money and a lot of headaches.
As I explain to my clients, it’s always best to have your ducks in a row, and be prepared for anything, and that is especially true when it comes to these two massive government programs. Case in point: Depending on your status, filing for Social Security at precisely the right time can result in tens of thousands of dollars in extra income in your pocket over the course of your retirement.
But, of course, that means the opposite is true, as well.
Please call us if you have any questions about Medicare, Social Security, investing, or retirement planning.