The Medicare Annual Enrollment Period starts on October 15 and runs through December 7. That makes now the perfect time for retirees to review and, if warranted, change your policy coverage.
Taking the time to examine your Medicare options each year is a wise move for both your health and your wealth. Evaluating your coverage can highlight policy and premium changes that may otherwise prove costly in relation to your current health needs. SageVest Wealth Management offers some recommendations to help you minimize your healthcare costs during retirement.
Review Your Coverage Annually
Most individuals sign up for Medicare during their initial enrollment period, and then retain the same policy, year-in and year-out. The reality is that Medicare policies change each year, and so does your health. Reviewing your elections on an annual basis allows you to select more accurate and therefore more economical coverage, based upon your current medical needs. It’s especially important if you’ve recently received a major health diagnosis, if your medications have changed substantially, or if you’ve moved interstate.
Year-End Is The Best Timeframe For Review
A number of open enrollment periods (short timeframes during which you can change your health care coverage elections) occur towards year-end. Common open enrollment periods begin as follows for the current year:
October 15, 2016 Medicare Open Enrollment
November 1, 2016 Healthcare Marketplace
November 14, 2016 Federal Employee Health Benefit Program
How To Evaluate Your Options
While you may not find a plan that exactly matches all your requirements, defining your specific needs can help keep out-of-pocket expenses at a minimum as you evaluate different plans.
• Premiums and deductibles are only one aspect of selecting cost-effective coverage. They should be reasonable, and appropriate for your age and vitality. Younger individuals may be willing to risk a higher deductible in order to lower monthly premiums. However, if you’re older and more likely to meet or exceed deductible levels, high deductible plans are probably inadvisable.
• Participating practitioners in your plan change yearly. Make a list of all your medical professionals, including specialists like audiologists, physiotherapists, etc. Make sure you can still access your selected providers, and check which are classed as in-network.
• Prescription coverage changes annually too. A drug that was covered this year may be in a higher priced drug tier or not included at all in next year’s plan. Use the labels on your prescription containers to prepare a list of your medications and dosages.
• Individual healthcare needs are primary, even if you’re part of a couple. The plan that suits your partner’s healthcare needs may not be most appropriate for you.
• Medicare star ratings reflect how well a particular plan did across a number of different categories, including quality of care and customer service. These Medicare-assigned ratings can be very helpful when comparing specific plans side-by-side.
Help Is Available
Research shows that most retirees rarely or never re-evaluate their Medicare coverage once they’ve enrolled and made initial selections. One reason for this is the complexity of the Medicare system, which can seem confusing. However, help is available.
• The main Medicare website includes vast amounts of helpful information and links to other resources. It can also help you contact representatives familiar with the options in your state, in order to review plan available in your region.
• The State Health Insurance Assistance Program (SHIP) also provides state-by-state Medicare assistance.
• 1-800-MEDICARE is toll-free. Representatives can help you find the lowest-cost plans based upon the medications you take, your medical providers, and more. They can even enroll you in a new plan and automatically dis-enroll you from your current plan. Note that changes always take effect at year-end.
• The SageVest article, Age 65 – Medicare Enrollment, offers a comprehensive overview of the Medicare system.
Employer-Sponsored Retiree Health Plans
If you have access to one, an employer-sponsored retirement plan likely remains the best option for healthcare coverage during retirement. Your former employer may contribute a portion of the premium, and should undertake due diligence to ensure broad, reasonably priced coverage.
A Note Of Caution Before You Switch Plans
As an important note, if you’re on Medicare, one thing to be aware of is that some plans require medical underwriting when you change. Unless you live in one of the states where your right to change is protected by legislation (Connecticut, Massachusetts, New York, California, Maine, Missouri, Oregon, and Washington), then be careful about skirting annual expenses at the risk of losing access to a better plan in the long-run.
Ultimately, it may not be worth switching insurance for small savings, but even if you don’t make policy changes, evaluating your coverage annually is still important. At the very least, it’ll give you a firm idea of your plan coverage and costs for the coming year; and, if you’re in good health, a plan evaluation and change in policy may yield substantial savings.
We invite you to contact us for more information on this and other important financial considerations for retirement.
