If you’re already enrolled in Medicare it may be time to evaluate your current coverage, make changes or switch plans during the open enrollment period from October 15 through December 7. If you have a Medicare Prescription Drug Plan, and are considering making changes from Original Medicare (Parts A and B) to a Medicare Advantage Plan, or vice versa, now is your chance to make changes or enroll.
Medicare health and drug plans are allowed to make changes to their offerings each year, including changes to costs, coverage, and what pharmacies and providers are in their network. If they no longer meet your requirements, during the Open Enrollment Period you can change Medicare health plans and prescription drug coverage for the following year. Changes made during Open Enrollment (also known as the Annual Enrollment Period) are effective for coverage as of January 1, 2020.
During Open Enrollment you can:
- Switch from Original Medicare to a Medicare Advantage plan, and vice versa
- Switch from one Medicare Advantage plan to another
- Switch from one Part D plan to another
- Change from a Medicare Advantage plan that doesn’t offer prescription drug coverage to one that does, and vice versa
You can also join a Prescription Drug (Part D) Plan for the first time if you missed your personal deadline for signing up. Or, you can drop your Part D coverage altogether.*
Do I Need to Change Plans?
If you’re enrolled in a Medicare health or prescription drug plan, review the materials that your plan sent you like the “Annual Notice of Change” (ANOC). If your plan is changing, be sure that it still meets your needs for the following year. If it doesn’t, now is the time to review your plan so that you’re satisfied with the level of care and coverage your receiving. Also, consider if your health has changed, if you may need additional care in the coming year, or if your premiums and out-of-pocked expenses are too high.
Since health care and drug expenses make up a good portion of a retiree’s budget and the budget of those close to retiring, we are available to answer your questions and help you with your options. Drug costs may differ substantially depending on the drug plan, so we suggest you review your current plan against others to see which offers the lowest out-of-pocket expenses for the particular brand-name and generic drugs, if any, that you use.
Among this year’s changes for 2020 is the closing of the coverage gap, or donut hole, for generic drugs. The gap was closed in 2019 for prescription drugs.
Here’s how the coverage gap works, according to Medicare. After you and your drug plan have spent a certain amount of money for covered drugs, you may have to pay more for your prescription drugs up to a certain limit. In 2019, once you and your plan have spent $3,820 on covered drugs, you’re in the coverage gap (this amount may change each year, and Medicare has yet to announce any changes).
Once you reach that coverage gap, you’ll have to pay 25% of your out-of-pocket costs for brand-name and generic drugs. You continue to pay those costs until you reach the threshold for catastrophic coverage, which for 2019 is $5,100 (again, this could change for 2020). Once you hit that limit you have to pay no more than 5% of your drug costs for the rest of the year.
Other changes to the Medicare program coming in 2020 are to Medigap plans (Medicare supplemental insurance). In general, Medigap policies are sold by private insurance companies and cover some of the health care costs that Medicare doesn’t, including co-payments, coinsurance and deductibles. They are standardized plans that must provide the same basic benefits, but some offer additional benefits and premiums vary.
For 2020, Medigap plans sold to new people with Medicare won’t be allowed to cover the Part B deductible. Because of this, Plans C and F will no longer be available to people new to Medicare starting on January 1, 2020. If you already have either of these two plans (or the high deductible version of Plan F) or are covered by one of these plans before January 1, 2020, you’ll be able to keep your plan. If you were eligible for Medicare before January 1, 2020, but not yet enrolled, you may be able to buy one of these plans.
ARE YOU ABOUT TO TURN 65?
The Open Enrollment Period doesn’t apply if you’re new to Medicare.
If you are 65 or older or turning 65 in the next three months and not already getting benefits from Social Security you should sign up for Medicare Parts A and B, unless you are working for a company with 20+ employees.
*If you don’t elect to get Part D coverage when you are first eligible, you may have to pay more to get this coverage in the future.
Medicare is an important part of retirement. Let’s discuss your retirement plan. Contact Bulwark Capital Management at 253.509.0395.
“What actions can I take during Medicare open enrollment each year?” AARP. https://www.aarp.org/health/medicare-qa-tool/actions-to-take-during-open-enrollment/
“Closing the Coverage Gap—Medicare Prescription Drugs are Becoming More Affordable,” Medicare.gov, The Official U.S. Government Site for Medicare. https://www.medicare.gov/Pubs/pdf/11493.pdf.
“How to compare Medigap policies,” Medicare.gov, The Official U.S. Government Site for Medicare. https://www.medicare.gov/supplements-other-insurance/how-to-compare-medigap-policies