Medicare isn’t free : Annual Open Enrollment Period
Annual Open Enrollment Period
October 15 – December 7: Individuals can join, switch, or drop a plan for coverage beginning January 1.
here’s a quick overview of what the four parts cover:
Part A: Inpatient hospital treatment
Part B: Doctor’s visits, preventative treatment, ambulance service, some medical equipment
Part C: Medicare Advantage plans from a private insurer combining Parts A, B, and D
Part D: Prescription drug coverage
We always like to point out that Medicare is not really “free”. But you won’t pay a premium on Part A.
2. Know the potential costs.
In 2021, the cost for Part B coverage is $148.50 per month. That premium was going to be higher, but the CARES Act reduced the planned increase to a 25% increase. We’ll get a better idea of what the 2022 rate could be in October when the cost of living adjustment for Social Security is announced: due to the hold harmless provision, Medicare premiums can’t exceed increases in Social Security benefits.
One interesting wrinkle this year is that Part B plans will probably cover 80% of a new Alzheimer’s drug, Aduhelm, which carries an annual price tag of $56,000 per treatment. If one million Medicare enrollees were to take that drug, spending on it would exceed $57 billion in a single year, far surpassing spending on all other drugs combined. While it’s great that seniors who need Alzheimer’s care won’t have to pay for this treatment out of pocket, there’s a very good chance premiums on many Part B and C plans are going to go up as a result.
Of course, the ongoing fallout from the pandemic could affect Medicare premiums as well. Many healthy seniors put off routine doctor’s visits and other non-essential medical procedures to avoid potential COVID-19 exposure. Now that the majority of seniors are vaccinated, 2022 could see a rise in the use of medical services, which could also drive up premiums.
As for Part D, premiums are based on your level of retirement income. Drug companies and insurance companies often change the costs of medications and the amount of coverage provided at the beginning of every year. Unless you read the fine print on your annual policy notice, you might not be aware of a major increase until your pharmacist tells you the total bill. In addition to shopping around for the best coverage on any drugs you or your spouse take regularly, it’s also a good idea to shop around at local pharmacies for the best prices on those medications.
3. Know what you’re not getting.
I think we’ve covered the misconception that Medicare is “free.” But many seniors also head into retirement thinking that Medicare is going to pay for everything.
Well, here’s a list of things that Medicare A and B don’t cover, straight from Medicare.gov:
Most dental care
Eye exams related to prescribing glasses
Hearing aids and exams for fitting them
Routine foot care
So, to recap: much of Medicare isn’t free, it doesn’t cover everything, and the options it presents can be a lot more complicated than folks are prepared for. And in most cases, you only get one chance during the year to secure the coverage you need.
This intersection of your health care and your money is an area where making a rash decision can have really unfortunate consequences. Please set aside some time to consult with a health care professional and your fiduciary advisor during open enrollment next month. And if you have any questions about Medicare and your financial plan, don’t hesitate to call up Lloyd Schneider at Mintco Financial.
Or if you prefer drop us a line
Call us 813-964-7100 or 716-565-1300