“Don’t agonize. Organize.”
~Florynce Kennedy, American Lawyer (1916-2000) Question: What do I need to know about the Medicare Open Enrollment Period? Answer: The Medicare open enrollment period began October 15 and runs through December 7, 2017 allowing participants to make changes that will become effective January 1, 2018. This an opportunity to make any necessary adjustments so participants will have the Medicare health care and prescription drug coverage plans that works best for them.
The open enrollment period is different in that during this time you can join and/or switch Medicare Prescription Drug Plans (Part D) or drop it all together. You may also switch from Original Medicare to a Medicare Advantage Plan, a different Advantage Plan or vice-versa.
Although the majority of retired Americans expect Medicare to cover all their healthcare costs, in reality, Medicare only pays about 60 percent of current retirees’ medical costs. Most U.S. citizens become eligible for Medicare on the first day of the month they turn 65. You can apply during a seven-month window around your 65th birthday; the month of your birthday, plus the three months prior and three months later. The open enrollment period allows for “do-overs” and fine-tuning adjustments. What Should You Do?
Now is a good time to review your current Medicare plan. Several things to consider are whether or not you’re satisfied with your current coverage and costs, if your health has changed, or do you anticipate needing medical care or treatment in the near future? The open enrollment period is the opportunity to evaluate your current situation and to make any changes. New for 2018
The Part D prescription drug plan initial deductible amount increases by $5 to $405 in 2018.
After you’ve spent $3,750 on covered drugs ($50 higher than 2017) you enter what is called the “donut hole” until you’ve spent $5,000 when catastrophic coverage begins. Part of the Affordable Care Act gradually closes this gap by reducing your out-of-pocket costs for prescriptions purchased in the gap. In 2018, you’ll pay 35% of the cost for brand-name drugs in the gap and 44% for generic drugs.
Medicare beneficiaries who file individual tax returns with income greater than $85,000 and those filing jointly with income in excess of $170,000 pay additional monthly premiums for Medicare Part D prescription coverage. This Income-Related Monthly Adjustment Amount (IRMAA) increase may be as much as 58%, while others may see their IRMAA drop. For details, see the Centers for Medicare & Medicaid Services website www.CMS.gov.
It can be confusing and complicated to determine your current coverage and compare it to other available plans. Pay attention to notices you receive from Medicare and from your plan, and take advantage of help available by calling 1-800-MEDICARE or by visiting the Medicare website www.medicare.gov.
A successful retirement plan includes planning for what you want to have happen, but also for what might go wrong. Experts estimate that a couple spends between $400,000 to well over $1 million on healthcare costs during retirement. Managing income and setting aside a portion of your retirement holdings specifically for healthcare costs may help you handle this common surprise.
In addition, it’s important to document your desires and preferences about medical care, asset management and end-of-life decisions with your loved ones, family, and the appropriate professionals. Get the dialogue started to ensure the best possible care for you and so others will understand your requests and needs before a situation becomes urgent. It’s as simple as asking “Who, What, Where, When and How” regarding your future; Who will you be spending time with, what will you be doing, where would you like to be, when could this happen, how will you get around, and how will expenses be paid? Put this in writing for family, friends and the professionals who oversee your legal, financial, insurance and health matters. If you’d like a Medicare Quick Reference Guide please contact our office. Don’t agonize, organize; we can help. Stay focused and plan accordingly.
Past performance does not guarantee future results. Views expressed are the current opinion of the author and are subject to change without notice. Information contained in this report was received from sources believed to be reliable, but accuracy is not guaranteed. Raymond James & Associates, Inc. member New York Stock Exchange/SIPC does not provide advice on tax, legal or mortgage issues. These matters should be discussed with an appropriate professional.
“Certified Financial Planner Board of Standards Inc. owns the certification marks CFP®, CERTIFIED FINANCIAL PLANNER ™, CFP® (with plaque design) and CFP® (with flame design) in the U.S., which it awards to individuals who successfully complete CFP Board’s initial and ongoing certification requirements.” This article provided by Darcie Guerin, CFP®, Vice President, Investments & Branch Manager of Raymond James & Associates, Inc. Member New York Stock Exchange/SIPC, 606 Bald Eagle Dr. Suite 401, Marco Island, FL 34145. She may be reached by phone at 239-389-1041, or by email: email@example.com. Website: www.raymondjames.com/Darcie.