The open enrollment period for Medicare is upon us.
Running from Oct. 15 through Dec. 7, this period is Medicare enrollees’ annual opportunity to tweak their coverage for 2019.
If you already have Medicare — the federal health insurance program primarily for folks age 65 and older — start by reviewing the “plan annual notice of change” document that your plan should have sent you last month.
If you’re newly eligible for Medicare or will become eligible soon, start by finding out when your initial enrollment period is. That’s the seven-month period during which you can first sign up for Medicare — and it does not necessarily overlap with the open enrollment period.
Don’t delay these steps. Signing up for Medicare coverage is a complex process, and fine-tuning your coverage during the open enrollment period can be intimidating as well.
For a smoother process, review the following key facts before proceeding.
1. You’re not alone
Medicare can be confusing for both new and existing beneficiaries. The latest edition of the “Medicare & You” guide that beneficiaries receive every year is 120 pages.
If you find yourself overwhelmed, know that help is out there.
One free option is the State Health Insurance Assistance Program, or SHIP, for your state or territory. Federal grants fund these programs, which offer counseling and assistance to Medicare beneficiaries. To learn more about them, visit the national SHIP website.
2. There’s an alphabet soup
Medicare is so complex that even its alphabet doesn’t make much sense. Still, fully understanding the ABCs of Medicare is critical to making the right choices for your health and budget.
The two main types of Medicare coverage are known as Original Medicare and Medicare Advantage.
Original Medicare plans are coverage you obtain directly from Medicare. This type of plan includes:
- Medicare Part A (hospital insurance)
- Medicare Part B (medical insurance)
If you opt for an Original Medicare plan and also want prescription drug coverage, known as Medicare Part D, you must buy such a plan separately.
Medicare Advantage plans are offered by private insurance companies, like HMOs and PPOs, that are approved by Medicare. A typical Medicare Advantage plan includes:
- Medicare Part A
- Medicare Part B
- Medicare Part D
3. Medicare is not free
Health care expenses don’t end when Medicare begins. Like private health insurance coverage that you obtain through an employer, Medicare coverage entails costs like premiums and deductibles. Plus, it doesn’t cover all health care-related expenses, as the next section of this article explains.
So it’s perhaps no wonder that two married 65-year-olds who retire in 2018 would need $280,000 to cover their medical expenses throughout retirement, according to the latest annual estimate from Fidelity Investments.
4. Medicare is not all-encompassing
Medicare doesn’t cover all health care-related costs. Services and items that Part A and Part B generally do not cover include:
- Long-term care
- Most dental care
- Eye examinations related to prescribing glasses
- Cosmetic surgery
- Hearing aids and exams for fitting them
- Routine foot care
You can use Medicare.gov’s “Your Medicare Coverage” search tool to determine whether other services or supplies are covered.
5. You might want — or need — a supplement
If you opt for Original Medicare, you also can buy a Medicare supplement insurance policy to help pay for expenses the Original Medicare plan doesn’t cover, like copayments and deductibles. These supplemental policies are also known as Medigap plans.
Folks who opt for Medicare Advantage do not have the option of supplementing their Medicare Advantage plan with a Medigap plan, however.
To learn more about Medigap plans in general, check out “The ABCs of Selecting a Medicare Supplement Plan.”
To learn about how you might be affected by two popular Medigap plans becoming closed to new enrollees soon, don’t miss “A Big Change to a Popular Medicare Option Might Increase Your Costs.”
6. Beware the Part D late penalty
If you put off prescription drug coverage, it can cost you for the rest of your life. Medicare calls it the “Part D late enrollment penalty.”
You may owe this penalty if you go without prescription drug coverage for any continuous period of 63 days or more after your initial Medicare enrollment period — when you’re first eligible to sign up for Medicare.
This is no one-time fee, however. By law, the Part D late enrollment penalty becomes part of your monthly drug coverage premium. So, you generally must pay the penalty for as long as you have a Medicare drug plan.
To learn more about this penalty — including how you can avoid it — visit Medicare.gov’s “Part D late enrollment penalty” page.
7. Safeguard your ID number
Seniors receive a unique Medicare ID number upon becoming a beneficiary. Your Medicare number is like other sensitive personal information in that it’s valuable to identity thieves. The Medicare blog explains:
In fact, thieves consider your Medicare number and other protected health information more valuable than credit card information because people can reuse them to bill Medicare for services that you didn’t get. When people steal your identity and bill Medicare for items or services you didn’t get, it drives up costs for everyone.
Until recently, Medicare numbers were based on Social Security numbers. That started changing earlier this year, when Medicare started sending beneficiaries new Medicare cards with new unique ID numbers as part of an effort to prevent identity theft. You’ll still need to safeguard the new number, though.
To learn more about this change, check out the “New Medicare Card” webpage.
Do you have any Medicare tips you would share with others? Tell us about them by commenting below or over on our Facebook page.