Every year, the Medicare open enrollment period begins on October 15 and ends on December 7. This is when you decide which plan or plans are best for you. As you know, Medicare has several parts.
There’s Part A, which generally covers hospitalizations and is offered at no cost. Part B covers outpatient medical care. If you want extra services and are willing to pay more to get them, Part C may be what you’re looking for. Finally, Part D is prescription drug coverage provided by private insurers.
While some people think Medicare will cover all their healthcare costs, that’s not the case. According to the latest data, a 65-year-old retiring this year can expect to spend around $155,000 in healthcare and medical expenses throughout retirement. This highlights the importance of reviewing your Medicare plan to ensure you have the best coverage.
This being said, here are some things you should know about Medicare open enrollment!
1. Medicare open enrollment dates
Every year, the enrollment period is October 15 to December 7. This is when Americans can enroll in or make changes to Medicare or Medicare Advantages policies. It’s important to note that you may be restricted from making a change regarding Medigap or a supplementary policy.
For those with Medicare Advantage plans, there’s another open enrollment period that starts on January 1 and ends on March 31. This is when people can go back to their original Medicare or change from one Medicare Advantage plan to another.
If you’re happy with what you have, you don’t have to do anything to re-enroll.
2. Medicare Advantage issues
You can tell the Medicare open enrollment period started by the advertisements that inundate your mailbox and your airwaves. Experts warn that Medicare Advantage plans have come under fire in the past few years for their aggressive marketing strategies.
Some beneficiaries say they were having good experiences with their Advantage plans until they got sick and found themselves fighting for coverage.
According to Sandy Leith, director of the Senior Health Insurance Program for Illinois, advertisements for some plans set Americans up for failure, with essential details hidden in fine print. Moreover, appeals for denied claims can be difficult to navigate. That’s how people end up with services that aren’t up to par.
3. Medicare Advantage differences
These plans come with a monthly cost that varies depending on the plan (that is, in addition to the Part B premium cost). The plans usually include prescription drug coverage and annual out-of-pocket spending caps for covered services.
A Medicare Advantage plan may also offer extra benefits not included by traditional Medicare, such as hearing, vision, and dental coverage, as well as gym memberships. Providers are able to do this because they manage costs, partly by limiting recipients to in-network providers.
During Medicare open enrollment, experts recommend making sure your preferred providers are still included in the network for your plan.
4. Limits on Medigap changes
During Medicare open enrollment, people who choose to maintain their current traditional Medicare may also go for a supplemental medigap plan from a private insurance company to cover costs like copays.
It’s important to note that traditional Medicare, when not paired with Medigap, doesn’t have a limit on out-of-pocket expenses in a year. On the other hand, Medigap policies have standardized benefits, but they cannot be paired with Medicare Advantage plans. Most US states offer 10 types of Medigap policies, but premiums vary significantly by insurer.
If you have a Medicare Advantage plan, you can switch to the traditional plan during Medicare open enrollment, but you may have trouble getting a Medigap policy. Some states provide more protection than others, but, usually, your first time enrolling in Medicare is your best chance to get a Medigap policy.
5. Medicare premiums
As you might think, Medicare open enrollment comes with some changes for the next year.
In 2024, traditional Medicare beneficiaries will pay a monthly rate of $174.70 for Medicare Part B. This is an increase of $9.80 from $164.90 in 2023. All Medicare Part B beneficiaries will have an annual deductible of $240 in 2024, up from $226 in 2023. This rate applies to those making less than $103,000 per year. For individuals who earn more, income-related monthly adjustments apply at various levels.
Medicare Part A beneficiaries who need hospitalization will pay an inpatient hospital deductible of $1,632 in 2024, an increase of $32 from $1,600 this year. The coinsurance amount that beneficiaries pay for the 61st through 90th days of hospitalization will be $408, compared to $400 per day in 2023. When it comes to lifetime reserve days, individuals will pay $816 per day, up from $800 per day in 2023.
For beneficiaries in skilled nursing facilities, the daily coinsurance for the 21st through 100th day of extended care services will be $204 in 2024, up from $200 in 2023.
Benefits, plan choices, and average premiums for the Medicare Part D prescription drug program and Medicare Advantage will remain stable in 2024. However, this year’s Medicare open enrollment comes with other changes—minor though.
The average monthly plan premium for Medicare Advantage plans, which include the Part D drug program, is projected to increase from $17.86 in 2023 to $18.50 in 2024.
Besides Medicare open enrollment, there are other things you should know about federal health insurance, and this book can offer you the information you need to know.
6. When do you have to enroll in Medicare?
Usually, experts recommend people enroll in Medicare within the three months before and three months after turning 65. It’s important to keep this in mind, because not doing so during the Medicare open enrollment can result in financial penalties, which can increase your premium for the rest of your life.
There are exceptions, though. They apply to people who receive health insurance through their spouse’s job or their employer, as long as the workplace has 20 or more employees. Make sure to check with your employer about how they handle your group’s health coverage at age 65.
Be careful with the “COBRA trap,” which is the insurance you may get after you leave your job. Most people don’t know that it doesn’t eliminate the requirement that they apply for Medicare at age 65.
7. Watch out for IRMAA
People with higher incomes pay more for their Part B and D premiums. This is thanks to IRMAA, or the income-related monthly adjustment amount.
In 2023, an individual with an income between $97,000 and $123,000 pays $230.80 per month for Part B, while the premiums for those earning less are $164.90. In 2024, people with an income between $103,000 and $129,000 will pay an extra $69.90 per month, for a total of $244.60.
Keep in mind that your income for IRMAA purposes is calculated based on the income you earn two years before the Medicare open enrollment when you decide to apply for federal health insurance.
8. Avoiding the surcharge
The good news is that you can appeal your IRMMA during the Medicare open enrollment if your income is lower now than two years ago due to a life-changing event, such as divorce, retirement, or the death of a spouse, or if you think there’s been a system error.
Apart from that, the only way to avoid the surcharge is to have less modified adjusted gross income. Also known as MAGI, it includes all taxable income from work, investments, and the taxable portion of your Social Security.
The sad news is that most popular deductions, such as mortgage interest and charitable donations, don’t reduce your MAGI. However, Roth IRA withdrawals don’t count toward your MAGI. If you’re still working, you can still make more contributions toward tax-deferred retirement accounts to lower your income. Another option would be to delay collecting Social Security benefits.
If you liked our article on things you should know about Medicare open enrollment, you may also want to read 8 Toughest States for Retirees.