Carl Lachman, MBA, CFP®

Medicare Open Enrollment Has Begun

Medicare open enrollment period began October 15 and remains open until December 7. This open enrollment period is the same every year. What do you need to do?

Consider Making Changes to Your Drug Coverage

Although you probably made some Medicare choices in the three months leading up to your 65th birthday, you may want to consider your options every fall and see if it makes sense to make changes in your coverage.

For instance, you probably chose some sort of Medicare Part D coverage, which is insurance for prescription drugs. But do you know that the formulary of drugs covered under each Part D plan changes every year? You should check the drugs you need against the formulary list of your plan to make sure they are still covered. If the coverage has changed, it may make sense for you to change to a different prescription drug plan. There is no medical underwriting for drug plans, so this sort of change is not particularly difficult to make. Look into it.

Do You Have Retiree Coverage from a Past Employer?

If you have retiree coverage from a past employer, how well do you understand your coverage? There is a good chance it was fantastic when you retired, but benefits change and it might not be very good today if you shop around. You don’t want to be stuck with coverage you can’t change, so don’t wait to check. If you wait too long, you might not be able to make a change to other Medicare coverage options.

Consider Your Current Health and Your Health History

How did you decide what Medicare or Medicare Advantage coverage to have? Chances are, you didn’t make a fully informed decision. Who can be fully informed when the program is complicated and hard to understand?

Because of this, the coverage you have may not be a good match for the health issues you are having. For instance, are the doctors you want or need to see in network? If not, maybe you should switch to a different plan. How about your out-of-pocket costs? Are they higher than you expected? Now is the time to see if you have better options that will save you money.

“I Really Don’t Understand Medicare”

Many people don’t understand Medicare. It might as well be a discussion of quantum mechanics and particle physics. Here’s a quick summary:

• Medicare is the U.S. government health insurance that is available when we turn 65 years old. We can sign up in the three months before our 65th birthday.

• Medicare A is hospital insurance, and Medicare B is medical/doctor insurance.

• An alternative to A + B is to go with Medicare C, which is called Medicare Advantage. It is a private health insurance option (like an HMO or PPO) available from many insurance companies.

• Medicare D is prescription drug insurance coverage.

• Most people want to get Part A coverage at their 65th birthday, even if they are still working and have employer health insurance coverage.

• Many will also want to get Part B at their 65th birthday.

Are You Confused?

Many choices, many options, many costs. It is complicated! Don’t give up if you are confused at this point: Medicare confusion is a sign of normal brain function!

Most of the time, the people you will talk to about Medicare will be either well-meaning government employees or insurance salespeople. Many of the government employees have a hard time understanding the complexities of the system and thus will have a hard time helping you make a good decision. Most of the insurance people are only interested in the sales commission they will receive when you sign up. Neither group is really looking out for your best interests. So what should you do?

Find Someone to Be On Your Side

Considering that health costs can be such an enormous part of your expenses after you turn 65, it makes sense to spend a little money to get some good unbiased advice.

Do you work with a fee-only financial planner? If so, you might be able to get good advice without additional cost. These financial planners usually include Medicare advice as one of the services they offer, and you might be able to get the advice without any additional expense.

Even if you work with a fee-only financial planner, no matter how smart they are, they probably don’t know everything about Medicare. So who else can you talk to? A good option is one of the independent Medicare experts that don’t sell insurance and that charge a fee to help you understand the best Medicare solution for your set of circumstances.

If you don’t use a fee-only financial planner and want to understand what they do, try visiting the National Association of Personal Financial Advisors online at www.NAPFA.org. This nonprofit only has links to fee-only advisors.

An Online Medicare Expert

Recently, I attended a financial conference where one of the speakers was from the i65 Medicare Software company. I was impressed. This online solution will give you detailed Medicare advice for a $65 charge. You enter your information online, and you receive a report that includes step-by-step instructions for your situation. Take a look online at www.i65.com/consumers.

Considering that your health care costs in retirement can exceed $250,000 over the rest of your life, a charge of $65 and the time it takes you to fill out your information online seems like a trivial price to pay to get good advice.

A Month and a Half

The last few months each year are often busy, and you probably have a full schedule. But you can’t change the fact that Medicare open enrollment closes in just a little more than a month and a half.

If you are diligent, you can start reading and researching, and maybe find the best Medicare solution for you. But what if you are wrong? Consult a reliable source that is independent of the government and insurance companies and that is willing to look out for your best interest, even if you have to pay them something. Your peace of mind is worth the cost.