Every September, Medicare plans deliver an “annual notice of change” to members. This will detail any changes in coverage, costs and service effective next year.
CNBC’s recent article entitled “Medicare open enrollment is coming up. Three steps to save money this fall” explains that Medicare open enrollment is a few weeks away. If you want to save some money next year, you need to get going ASAP.
Open enrollment for Medicare and Part D prescription coverage is every year from October 15 to December 7. This is a very important time for seniors because this is when they can shop for a better or less expensive plan.
You can switch from original Medicare (Part A hospital insurance and Part B medical coverage) to a private Medicare Advantage plan. You can also move from one Medicare Advantage plan to another and enroll in a prescription drug plan.
It is a major job to compare all the plans and make a decision. Here are three steps that can help you make the selection process easier.
- Understand your plan. Start watching for an “annual notice of change” from your Medicare plan. You receive this notice only if you’re already on Medicare, no matter if you’re employed. Look at all of your medical expenses over the last six months and make a list of the doctors you see regularly and your prescribed meds.
- Compare the plans. Once you understand the details of your plan, start shopping. The Medicare Plan Finder is an online tool from the government to that can help you select a plan.
- Get in the habit of planning. Medicare is an essential component of your retirement planning. You want to manage your premium costs, so you need to do your homework. Premiums for some parts of Medicare are based on your modified adjusted gross income from two years ago. MAGI also adds in capital gains, Social Security, and required minimum distributions (RMDs) from IRAs and 401(k) plans. Therefore, the premiums you’ll be paying in 2021 are based on 2019′s income tax return.
Of course, there’s not a lot you can do at this point to modify your 2019 income.
However, you still have a chance to plan for 2022′s premium expenses. Ask your financial advisor now to see what you can do to manage your income for this year. This can help you decrease Medicare costs in the future.
Reference: CNBC (August 26, 2020) “Medicare open enrollment is coming up. Three steps to save money this fall”