The Medicare annual election period begins on October 15th and goes through December 7th.  During this time, Medicare recipients are faced with many decisions.  These decisions can seem complex and can impact many different aspects of your financial situation.  In this blog post, we discuss the top three issues you should consider during the Medicare annual election period.

For this post, we want to welcome Lance Otey, ALMI, AIAA, ARA, ACS.  He is the executive director at Abundant Financial Group, a life and health insurance firm in the Dallas-Ft. Worth area.  Lance specializes in Medicare, health insurance, and benefits for individuals, business owners, and employer groups.

Each year during the Annual Election Period (AEP), those on Medicare have an opportunity to review their coverage and make changes for the following year. There are many factors and considerations, but we will highlight three of the most common items to consider.

1. How is your current coverage working for you?

If you currently have a Medicare Supplement, you probably purchased it for the long haul.  Unless it is a matter of budget, there is probably little reason to change.

However, you will need to consider your Part D Prescription Drug Plan. Has your prescription list changed at all over the past year? Do you expect it to change next year? Is your current plan still being offered next year? If so, has the premium gone up, or has the formulary (i.e. list of drugs covered) changed?

If you have a Medicare Advantage plan with Prescription Drug Coverage (MAPD), not only will you need to entertain the same questions regarding your prescriptions but will also need to find out if your current doctors and nearby hospitals have renewed their contracts with your carrier for the following year.  Additionally, you will need to consider things such as: How frequently do you intend to travel next year? Are you planning any upcoming surgeries? What are your needs relating to vision, hearing, and dental?  How has your experience with your current plan been this past year?

Many folks choose to remain in their current plan because they do not want to start the process all over, or do not know where to begin. This is where having a relationship with an adviser you can trust will come in handy.  Your Medicare adviser will be able to ask the right questions to help you make the best decision for your specific needs and budget.

2. If you are on Medicare Advantage, can you switch to a Supplement and vice versa?

The only time you are guaranteed acceptance into a Medicare Supplement is when you are at least 64 ½ and first enroll in Part B.  This can be due to “aging into Medicare” by turning 65 or enrolling in Part B later on due to a special circumstance, such as retirement.

If you currently have a Medicare Advantage plan and want to switch to a Supplement, your application will be medically underwritten. Different companies have different underwriting guidelines. A good Medicare adviser will know if you will qualify at all, and if so, with which companies you have the best chance based on your health history.

If you currently have a Medicare Supplement and have determined that you would like to try a Medicare Advantage plan, the process is much easier. AEP is the right time of year to look at that option and enroll in an Advantage Plan. If you try an Advantage plan, and at any time during the first 12 months, you decide to move back to your Supplement, you can do so.

3. If you select Medicare Advantage, how will you handle your max out of pocket in a worst-case scenario?

Medicare Supplements are a great way to pay upfront and limit your financial exposure when you need care. However, what if a Supplement is beyond your reach due to your financial or health situation? If you have a Medicare Advantage plan and are faced with a high dollar claim, are you able to afford your annual maximum out of pocket which can be $4000-$6000 or more? If you would rather not take the chance, there are ways to make an Advantage Plan function more like a Supplement by adding ancillary coverage for a fraction of the cost.

What are you most concerned with when it comes to a high dollar claim? Is it a fall or another accident? Cancer? Heart Attack? Stroke or some other Critical Illness? Maybe it’s general hospitalization or care needed afterward in a rehabilitation clinic.

There are cost-effective ways to layer your protection that can help save you money in the short term while reducing your exposure for the long term. You should always let your Medicare adviser know what concerns you most and ask about ways they can give you peace of mind in addressing those concerns.

With the Medicare annual election period upon us, you are going to be faced with many complex decisions.  These decisions can seem daunting and can also impact many aspects of your financial situation.  Having the right advisors can make the decision-making process easier.  If you need help understanding your Medicare benefits and how they impact your overall financial plan, please contact us today.

You can also view our full interview with Lance Otey here, and please don’t forget to subscribe to our YouTube channel for more valuable insights.

Lance Otey, ALMI, AIAA, ARA, ACS is the executive director at Abundant Financial Group.  Lance has more than 15 years’ experience in the life and health insurance industry.  Lance specializes in creating customized comprehensive benefit packages for individuals, business owners, and employer groups.  Lance also specializes in Medicare supplements, prescription drug plans, advantage plans, and ancillary benefits.

Author: Brett Fry

Brett rejoined Forteris Wealth Management this year and is managing our office in Dallas, TX.  While helping clients plan for retirement, education and generational asset transfers, Brett's expertise in portfolio management, managing concentrated stock positions, planning for the sale of a business, and helping young professionals accumulate wealth enables him to guide clients through their continuously changing financial decisions.