The Medicare open enrollment period is the time during which people with Medicare can make new choices and pick plans that work best for them.
Each year Medicare plans typically change what they cost and cover. In addition, your health-care needs may have changed over the past year. The open enrollment period is your opportunity to switch Medicare health and prescription drug plans to better suit your needs.
The Medicare open enrollment period begins Oct. 15 and runs through Dec. 7. Any changes made during open enrollment are effective as of Jan. 1, 2014.
During the open enrollment period you can:
• Join a Medicare Prescription Drug Plan
• Switch from one Medicare Prescription Drug Plan to another Medicare Prescription Drug Plan
• Drop your Medicare prescription drug coverage altogether
• Switch from Original Medicare to a Medicare Advantage Plan
• Switch from a Medicare Advantage Plan to Original Medicare
• Change from one Medicare Advantage Plan to a different Medicare Advantage Plan
• Change from a Medicare Advantage Plan that offers prescription drug coverage to a Medicare Advantage Plan that doesn’t offer prescription drug coverage
• Switch from a Medicare Advantage Plan that doesn’t offer prescription drug coverage to a Medicare Advantage Plan that does offer prescription drug coverage
Now is a good time to review your current Medicare plan. There are some factors you may want to consider as part of that evaluation. For instance, are you satisfied with the coverage and level of care you’re getting with your current plan? Are your premium costs or out-of-pocket expenses too high?
Has your health changed, or do you anticipate needing medical care or treatment? Now is the time to determine if your current plan will cover your treatment and what your potential out-of-pocket costs may be. If your current plan doesn’t meet your health-care needs or fit within your budget, you can switch to a plan that may work better for you.
Most Medicare Prescription Drug Plans have a temporary limit on what a particular plan will cover for prescription drugs. In 2014, this gap in coverage (also called the “doughnut hole”) begins after you and your drug plan have spent $2,850. It ends after you have spent $4,550 out-of-pocket, after which catastrophic coverage begins.
However, part of the Affordable Care Act gradually closes this gap by reducing out-of-pocket costs for prescriptions purchased within the coverage gap. In 2014, you’ll pay 47.5 percent of the cost for brand-name drugs in the coverage gap and 72 percent of the cost for generic drugs in the coverage gap. Each succeeding year, out-of-pocket prescription drug costs within the coverage gap continue to decrease until 2020, when you’ll pay 25 percent for covered brand-name and generic drugs within the gap.
Health Exchanges, or Marketplaces, which are part of the ACA, are available for people to shop for health insurance coverage. The exchanges opened Oct. 1. The ACA also includes an insurance mandate, which requires most individuals to have health insurance or face a penalty. However, if you have Medicare, neither provision applies to you. As a Medicare recipient, you won’t face penalties for being uninsured. Also, Exchanges do not provide information on Medicare plans, and you can’t purchase Medicare coverage through an Exchange.
Determining what coverage you have now and comparing it with other Medicare plans can be confusing and complicated. Pay attention to notices you receive from Medicare and from your plan, and take advantage of help available by calling 1-800-633-4227 or by visiting the Medicare website, www.medicare.gov. Your financial professional can also help you find the information you need to make decisions about Medicare. You may be wondering if you qualify for subsidies available through the Exchanges to help pay for the cost of health insurance. Unfortunately, these subsidies are not available to Medicare recipients.
Send financial questions you wish to have answered in this column to Dorion-Gray Retirement Planning Inc., 2602 Route 176, Crystal Lake, IL, 60014. You also may fax them to 815-455-4989 or email firstname.lastname@example.org.
• Paula Dorion-Gray, CFP, is a registered representative of Securities America Inc., member FINRA/SIPC and president of Dorion-Gray Retirement Planning Inc.