Medicare Open Enrollment is Here: Five Things Advisors Need to Know

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In this blog, I’m going to break down five critical points to know about Medicare for 2024 coverage. Knowing these key facts will:

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• Help you and your clients optimize their Medicare coverage and costs.
• Make it easier to go through the enrollment process.
• Protect your clients from unnecessary spending and risk.

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Bonus content: Check out our Open Enrollment 101 video on YouTube for a deeper dive into Medicare!

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1. The timeline for Open Enrollment is a critical window of opportunity.

From October 15th to December 7th each year, Medicare beneficiaries can make changes to their existing Medicare coverage. During Open Enrollment, your clients on Medicare can:

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• Join, drop, or switch to another Medicare Advantage Plan (or add or drop drug coverage).
• Switch from Original Medicare to a Medicare Advantage Plan or from a Medicare Advantage Plan to Original Medicare.
• Join a Medicare drug plan if you're on Original Medicare.
• Switch from one Medicare drug plan to another for those on Original Medicare

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It’s important to not delay taking action during Open Enrollment since this is the only time of the year Medicare beneficiaries can make changes outside of Medicare Advantage Open Enrollment, which is only for those on Medicare Advantage. Other than that, the only other time someone could make changes to their Medicare coverage is if they qualify for a Special Enrollment Period. The requirements for a Special Enrollment Period are very specific, so it’s best to advise clients to make Medicare coverage changes during Open Enrollment.

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2. Income plays a big role in Medicare.

The income-related monthly adjustment amount (IRMAA) is based on: 

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• Your client’s tax filing status. 
• The current year’s adjustment amount. 
• Your client’s modified adjusted gross income from two years prior. 

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For 2024, the standard base monthly premium for Part B is $174.70. For Part D, you will pay the chosen plan’s premium, plus a potential income adjustment of up to $81. To calculate your client’s 2024 IRMAA, which is added to these base premiums, the Social Security Administration (SSA) will look at their tax return from 2022. Their Medicare premiums and IRMAA determination are sent to them every year in the fall. Below is a table of expected total costs, which include both the base amount and IRMAA charge:

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3. Not all Medicare Advantage plans are created equally.

Medicare Advantage plans are offered through commercial insurance companies as an alternative way to manage your Medicare coverage from one carrier. They must cover all the same services as Original Medicare but can also include prescription drug coverage (Part D) as well. Insurance companies are paid a fixed amount annually for each person enrolled in their plans. In exchange, Medicare requires the plan to provide specific benefit protections and quality service. 

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Much like employer-sponsored health plans have different coverage and cost options, so do Medicare Advantage plans. Even within the same state some plans’ costs and services can vary quite a bit. This is because of extra services covered, contracts, drug formularies, and other factors that impact how health plans set their costs. For example, some Medicare Advantage plans offer additional benefits such as some coverage for glasses, dental care, and/or hearing services. It should be noted, however, that these vision and dental benefits are often not the same as stand-alone vision and dental insurance plans. 

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One of the most important things to consider about Medicare Advantage is that provider networks vary by plan. Your client will want to make sure their providers are in-network with a plan before enrolling.

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4. Medicare coverage doesn’t apply to dependents or spouses who are under 65.

This tip applies more so to Initial Enrollment Periods (“IEPs”), but it’s still important to call out in case you have clients turning 65 during the Open Enrollment period. Unlike employer-sponsored health insurance or Marketplace health insurance, Medicare coverage is only for individuals. Even if a married couple is the same age and Medicare-eligible, they have to enroll in Medicare coverage separately. If you have clients who are enrolling in Medicare soon with a spouse under 65 or a child they were covering through their employer plan, you’ll want to work with them to find alternative coverage options. Employer-sponsored healthcare coverage, Marketplace coverage, and COBRA are all potential options depending on each client’s situation. 

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5. Supplemental coverage, like Medigap and employer-sponsored retiree health benefits, need to be factored into Medicare coverage decisions.

Many Medicare beneficiaries have some form of supplemental coverage, such as a Medigap plan. Retiree health benefits from an employer or union are another form of supplemental coverage. This additional coverage helps to offset some of the out-of-pocket costs associated with Medicare. Although enrollment in these plans and benefits is not tied to Medicare’s Open Enrollment period, your client's costs are affected by these plan options and therefore they might want to shop around for other options during the Open Enrollment period. For example, many unions offer retiree benefits, but they are often Medicare Advantage plans. Perhaps they enrolled when they first retired but the plan no longer suits their needs. Often, these plans are a “use it or lose it” situation so clients feel pressured to initially enroll, but they can always make changes during the Open Enrollment period after being on the plan for a few years.

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Moving Forward

Although these five key pieces of information will make it a lot easier to prepare for and enroll in a Medicare coverage option, there are additional factors to consider that will make the Open Enrollment process even smoother. We suggest using the preferences and questions in this blog as a way for you and your clients to quickly and easily identify which Medicare options will work best for them. And if you really want to make healthcare planning a seamless experience for clients, schedule a call with me to learn how Caribou’s healthcare planning software supports financial goals and makes you the ultimate comprehensive financial planner.

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