Many people planning for retirement focus most of their attention on Social Security. That’s because they have some control over the benefits they’ll receive from the government program, and the cold hard cash that Social Security pays out is essential to cover living expenses of all kinds.
However, Medicare is often even more important for the financial well-being of retirees than Social Security. The federal government program covers a huge portion of healthcare costs for those 65 or older.
The challenge with Medicare, though, is that the program offers many different options for seniors to choose from. The right choice can mean the difference between comprehensive coverage, partial coverage, or no coverage at all, in some cases. That’s part of why Medicare offers an annual open-enrollment period that begins on Oct. 15 and continues until Dec. 7. By taking advantage of open enrollment, you can save money and ensure continued access to the healthcare you need.
Below, you’ll learn more about three potential changes you could consider that might save you money or get you better healthcare in 2023.
1. Switching between traditional Medicare and a Medicare Advantage plan
Open enrollment lets you make broad-based changes in the Medicare coverage you get. Those who’ve previously been part of traditional Medicare and have received Part A hospital coverage and Part B medical outpatient coverage can opt to move to a Medicare Advantage plan, instead.
Medicare Advantage plans often offer lower total premiums with more comprehensive coverage than traditional Medicare. But the private insurance companies that offer them impose more restrictive limits on the healthcare providers you’re eligible to use to get coverage.
On the other hand, if you’ve historically used a Medicare Advantage plan and want to switch back to traditional Medicare during the open-enrollment period, you can do so, as well. Remember, the key is to determine not just the premiums you’re paying, but also the total out-of-pocket costs involved with both options. If one choice offers real advantages over the other, switching can put more money in your pocket.
2. Moving from one Medicare Advantage plan to another
Because private insurers offer Medicare Advantage plans, most Medicare participants have more than one to choose from. Different providers offer different types of coverage, so you might find that your current coverage doesn’t result in as much savings as a rival-insurer’s plan. You can make the switch during open enrollment.
In making that assessment, look not only at monthly premium costs, but also at deductibles, copayments, and the annual limits on out-of-pocket expenses that the plans you’re considering offer. If one gives you a chance for substantial savings, it’s smart to make the switch.
3. Changing your prescription-drug coverage
Lastly, those seeking coverage for prescription-drug costs often consider Medicare Part D plans, particularly if they’re using traditional Medicare. Some Medicare Advantage plans include prescription drugs in their coverage, but others don’t, requiring their participants to look to Part D, as well.
As you age, your healthcare needs change, and it might be that your current Part D plan doesn’t cover a drug that you now need. If you find a better plan that does offer coverage, you can make the switch. Moreover, if you didn’t sign up for Part D before, you can do so during open enrollment, and those who no longer want a Part D plan can remove their coverage, as well.
