Millions of people rely on Medicare to cover their health-related needs. But Medicare is not a one-size-fits-all solution. On October 15th, the Medicare open enrollment period began – but before you enroll or make any changes, it’s important to understand what Medicare is and how it will change.
What is Medicare?
Medicare is the federal health insurance program for: people who are 65 and older; certain younger people with disabilities; and people with End-Stage Renal Disease. There are also different parts of Medicare that help cover specific services:
- Medicare Part A (Hospital Insurance): Part A covers inpatient hospital stays, care in a skilled nursing facility, hospice care, and some home health care.
- Medicare Part B (Medical Insurance): Part B covers certain doctors’ services, outpatient care, medical supplies, and preventive services.
- Medicare Part D (prescription drug coverage): Part D adds prescription drug coverage to original Medicare, some Medicare Cost Plans, some Medicare Private-Fee-for-Service Plans, and Medicare Medical Savings Account Plans.
These plans are offered by insurance companies and other private companies approved by Medicare.
How do you enroll?
The initial enrollment period (IEP), which is the first time you can sign up for Medicare, is 3 months before your 65th birthday. The annual election period (AEP) to make changes to your Medicare health or prescription drug coverage is October 15th through December 7th.
During the AEP you’re able to switch coverage, switch prescription plans, and/or enroll in Medicare Part D if you haven’t done so already. You can also leave your coverage as-is, but keep in mind that benefits and premiums can change.
You can enroll for Medicare Part A and/or Medicare Part B online at www.socialsecurity.gov, by calling Social Security, or in-person at your local Social Security office.
How will Medicare change in 2019?
With the new year quickly approaching, it’s important to get an overall understanding of the changes to come for Medicare in 2019.
To fight medical identity theft, Social Security numbers will be removed from Medicare cards and replaced with a new Medicare Beneficiary Identifier (MBI). Once you receive your new card, be sure to destroy the old one to avoid fraud.
Perhaps the most significant change is the coverage gap, also known as the “donut hole,” will be eliminated in 2019 for brand-name drugs. The donut hole is the gap in prescription drug coverage when a person reaches their initial coverage limit ($3,820 in 2019) and ends when they spend $5,100.
In 2019, there will also be a new premium bracket for Part B and Part D enrollees where people with incomes of $500k – $750k will pay a new higher premium.
With these changes comes uncertainty about how your coverage may be affected. Before taking any next steps, always consult with your Financial Advisor and a Medicare advisor on how these changes could affect you on the short and long term.