Allworth Co-CEO Scott Hanson outlines important Medicare reminders and upcoming enrollment dates.
With some 10,000 people retiring each day, our advisors meet with a lot of folks each and every week. And either during these appointments, or via calls to one of our radio programs, there are always lots of questions about Medicare.
That’s because, from penalties for missing signup dates, to limited enrollment windows, if you’re confused about the rules for Medicare, you’re in good company.
Medicare is our federal government’s healthcare coverage that is available to people age 65 and over and for younger people with certain disabilities.
People who turn 65 and are already receiving Social Security are automatically signed up. That means, if you’re not taking Social Security at age 65, you need to signup for Medicare independently during your personal initial enrollment period so as not to miss the deadline and get assessed a late enrollment penalty. (The fee is assessed monthly for as long as you take Medicare.)
The Initial Enrollment Period for Medicare Part A (hospital insurance) and Part B (medical insurance) is a seven-month window that begins three months before the month you turn 65, includes the month of your birthday, and then lasts three months after your birth month. (Specifically, Part A covers inpatient hospitalization and skilled nursing care, while Part B is intended to cover things like doctor’s appointments and lab tests.)
After your Initial Enrollment Period expires, the next opportunity for you to signup is during what is known as the General Enrollment Period, which runs from January 1st until March 31st.
Signing up during the General Medicare Enrollment Period means that your insurance will begin on July 1st. (But, depending on when you were first eligible for Medicare, signing up during the General Medicare Enrollment Period likely means you’ll be subject to a penalty in the form of an increased monthly premium for Part B.)
Lastly, there’s the Annual Open Enrollment Period, which runs from October 15th until December 7th (which is when you can also make changes to your coverage).
Now, under certain circumstances, say, you move or lose your other insurance coverage, you may be eligible to apply for Medicare during what is known as a Special Enrollment Period. (The rules for Special Enrollment Periods vary depending on your situation.)
While the enrollment periods can be a little confusing, signing up initially is relatively easy:
Lastly, if you are automatically enrolled in Part B (because you are taking Social Security), but want to drop that part of your coverage, you simply need to follow the instructions on the back of the coverage card they send you.
Medicare Advantage, also known as Medicare Part C, is private insurance that has been created to work in conjunction with government-run Medicare. These plans are an “all in one” alternative to Original Medicare and Medicare Part D (prescription drug coverage). They basically cover everything Part A and Part B cover, and, in most instances, include other types of coverage such as dental, hearing, vision and wellness, and drug coverage.
In a sense, Part C is more like traditional health insurance than Original Medicare.
Signups for Part C occur each year during the Annual Enrollment Period, which runs from October 15th until December 7th. During this period, you can opt in (if you already have Parts A&B), or opt out of Part C and switch back to Original Medicare (Parts A&B).
Costs for Medicare Advantage plans vary, so be sure to research all your available options.
Medicare Part D is the prescription drug benefit plan that is offered by private insurers that work in conjunction with Medicare. It’s intended to help protect retirees from the sometimes incredibly high cost of many drugs.
If you are eligible for Part A and Part B, you are generally eligible for Part D.
All Medicare Part D plans cover certain heavily prescribed drugs, but each plan varies some when it comes to the various drugs that are available (the drug list is called a 'formulary').
The cost of a Part D plan is linked to your income. Called an Income Monthly Adjusted Amount, the program uses your tax returns to determine cost. Typically, people with higher income levels pay more. As for when to signup, you are eligible during the seven-month Initial Enrollment Period, though you can also signup (or make changes) during the Annual Enrollment Period from October 15th until December 7th.
Different insurers have slightly different plan options.
As with Part B, to avoid a lifelong monthly late enrollment penalty, if you’re going to buy a Part D plan, you should do so when you first become eligible to signup for Medicare.
As an aside, in looking at the remainder of the year, October seems to have more health-related observance dates than any other month. These include:
But while October has quantity, this year, especially, December 1st stands out: That’s because it’s the start of National Hand Washing Awareness Week.
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2Scott Hanson (2011, 2012, 2013, 2014, 2015 & 2016) and Pat McClain (2012, 2013, 2014, 2015 & 2016). Barron's© magazine is a trademark of Dow Jones L.P. The ranking reflects the volume of assets overseen by the advisors and their teams, revenues generated for the firms and the quality of the advisors' practices.
3As of 08/20, Allworth Financial, an SEC registered investment adviser and AW Securities, a registered broker/dealer have approximately $9 billion in total assets under management and administration.
4Barron’s 2020 Top 100 RIA Firms. Barron's© magazine is a trademark of Dow Jones L.P. The ranking reflects the volume of assets overseen by the advisors and their teams, revenues generated for the firms and the quality of the advisors' practices.
✢Scott Hanson, Investment Advisor 2005, 25 most influential people in the financial services industry. The ranking reflects 25 people who Investment Advisor magazine believes have had or will have the greatest influence on the financial services industry.
✼Pat McClain, InvestmentNews 2014, Invest in Others Community Service Award, presented to an advisor who has made an outstanding impact on a community through managerial contributions to a non-profit organization.
†Financial Times, FT 300 Top Registered Investment Advisers, June 2019. The ranking reflects six areas of consideration including the company's years in existence, industry certifications of key employees, AUM, asset growth, SEC compliance record and online accessibility and calculates a numeric score for each company.
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