Guide to understanding Medicare open enrollment

Key Points

  • Take time to analyze how you use the health care system before Medicare open enrollment begins.
  • Review your Medicare benefits and determine what your Medicare coverage cost you in the past year to help you make the right choice for this year.
  • Keep up to date on any Medicare plan changes.

Health care expenses typically increase during retirement, so making informed decisions about your options is vital. Understanding Medicare open enrollment and how it works allows you to weigh your options and find the coverage that’s right for you and your budget.

The basics of open enrollment for Medicare

The Medicare open enrollment period is when people currently enrolled in Medicare can evaluate their existing health plan and prescription drug coverage and make any changes for the year ahead.

During this time, for example, you may elect to opt out of Original Medicare (Parts A and B) and enroll in a Medicare Advantage Plan that offers a wider range of benefits. Or, if you have a Medicare Advantage Plan, you may be able to switch to a competing Medicare Advantage Plan if it is less expensive or better fits your needs.

Review your health care needs

Each year, it’s important to review your personal health care needs and determine if your current Medicare coverage is meeting them. A good first step is to analyze how you use the health care system. Some questions to consider are:

  • Have there been any changes in your health?
  • Do you have medical conditions that require frequent doctor visits?
  • Have you been hospitalized in the last year, and have you needed to see one or more specialists?
  • Do you take one or more prescription medicines daily for treatment of a chronic health issue?

Needs versus costs

Equally important is to review and analyze what your Medicare coverage costs you. Here are some questions to start:

  • What were your insurance premium costs in the last 12 months?
  • How much did you spend for co-pays and co-insurance, and did you reach or exceed your deductible?
  • How much did you spend on prescription drugs for the year?

Identifying the answers to these questions, and those above, will help you evaluate which Medicare coverage plan may best suit your needs.

Consider changes to get better coverage

Leading up to open enrollment, you will receive information from the Centers for Medicare & Medicaid Services (CMS) about legal changes to Medicare. Or, if you have Medicare Advantage coverage, you will receive an annual notice of change letter from the insurance company.

  • Compare and choose. If you decide to comparison shop among Medicare Advantage Plans, make sure to compare the details, such as the plan’s network of doctors, hospitals, benefits, and prescription drug coverage. Also, contrast the financial aspects including premiums, deductibles, co-pays and out-of-pocket limits.

    Your objective is to compare the benefits and cost effectiveness of plans in the context of what you need.

  • Be an educated health care consumer. Understanding Medicare takes some time and effort because it is complex. The more you know about Medicare, the better you will be at making health care decisions that will have a positive effect on your life and future.

Talk with your advisor about your health care needs in retirement and find out how you can make the most of your Medicare benefits.