Time For Medicare Open Enrollment: How It Works

Annual open enrollment for Medicare runs from October 15 through December 7. This is the time Medicare health and drug plans can make changes. It’s also, of course, a chance for you to make changes, as well. The open enrollment period is only for those who are already enrolled in Medicare.

The standard monthly premium for Medicare Part B will increase by $9.80 per month to $174.70 in 2024. The annual deductible for Medicare Part B will be $240 in 2024, a $14 increase from the $226 annual deductible in 2023.

Eligibility for Medicare depends on a number of criteria. But in general, anyone who has lived in the United States legally for at least five years, has worked and paid Medicare taxes long enough, and is age 65 or older qualifies for Medicare coverage. The month you turn 65, you will no longer be covered under the Affordable Care Act. Also, once you’re enrolled in Medicare, you can no longer contribute pretax money to your health savins account (HSA). You can use the funds from your HSA to pay some healthcare costs, including your Medicare premiums.

Open Enrollment

If you are already on Medicare, open enrollment is a great time to review your coverage and see if there is a better fit. Any changes you make during this period will take effect January 1. Create or login into your Medicare account, so you can:

• See how the details of your current plan are changing for next year.
• Compare the benefits and costs of your current plan to other plans available in your area. Medicare offers a plan finder tool online to help.
• Build your prescription drug list to help you compare plans.
• Check prices based on any help you get with prescription drug costs.

Remember: When comparing plans look at the estimated “Yearly Drug & Premium Cost.” A plan with the lowest premium may not always provide the lowest total cost to you.

How Medicare Works

Medicare, a national healthcare program funded by the U.S. government, was created by Congress as part of amendments to the Social Security Act in 1965 to give coverage to people ages 65 and older without health insurance. Over the years, Congress has made many changes to Medicare. In general, the program has been extended by making more people eligible for it and expanded by using it to cover more medical conditions.

The program is administered by the Centers for Medicare and Medicaid Services (CMS) and extends coverage to include people with certain disabilities and those who have end-stage renal disease and amyotrophic lateral sclerosis (Lou Gehrig’s disease).

Medicare is divided into several categories: Medicare Part A (Hospital Insurance), Medicare Part B (Medical Insurance), Medicare Part C (also called Medicare Advantage), Supplemental or Medigap, and Medicare Part D for prescription drugs. (Note: If you have Medicare Advantage, you can also make a change during Medicare Advantage open enrollment from Jan. 1 to March 31 each year.)

Enrollment in Part A and Part B is automatic for anyone who receives Social Security benefits. Part D coverage is optional, and enrollment must be done by the individual. Part C, Part D and Supplemental are run by private insurance companies that follow rules set by Medicare.

With Medicare Part A (Hospital Insurance) and Medicare Part B (Medical Insurance), you pay for services as you get them. When you get services, you’ll pay a deductible at the start of each year, and you usually pay 20% of the cost of the Medicare-approved service, called coinsurance. If you want drug coverage, you can add a separate drug plan under Part D.

Part A: Hospital Insurance

Medicare Part A covers costs billed by hospitals or similar inpatient or inpatient-like settings, such as skilled nursing facilities, hospice, and some home-based healthcare. However, this plan doesn’t cover long-term or custodial care. Coverage is automatic for anyone who receives Social Security benefits. For those who don’t receive benefits, enrollment can be done through the Social Security Administration website.

Premiums for Medicare Part A are free if an insured person or their spouse contributed to Medicare for 10 or more years through their payroll taxes. Medicare Part A has a deductible ($1,600 in 2023) and coinsurance, which means patients pay a portion of the bill. There’s no coinsurance for the first 60 days of inpatient hospital care.

Part B: Medical Insurance

Medicare Part B generally covers costs for outpatient care such as doctor visits. Part B also covers preventive services, ambulance services, certain medical equipment, and mental health coverage. Some prescription drugs also qualify under this plan. Part B does come with some costs, however, which are adjusted annually. The premiums vary, according to the Medicare recipient’s income level. Medicare part B also has a deductible.

If you don’t have group health insurance from a large employer and fail to sign up for Medicare Part B at 65, then later decide you need it, you’ll likely pay a penalty of 10% of the standard premium for each 12-month period that you delayed. You will pay this penalty for life.

You could avoid the penalty if you had health insurance through your job or your spouse’s or partner’s job when you first became eligible. You must sign up within eight months of when that coverage ends and show proof of group insurance after you turn 65.

Part C: Medicare Advantage

Individuals who are eligible for Medicare Parts A and B are likewise eligible for Part C, also known as Medicare Advantage. Consumers purchase Medicare Advantage plans through private insurers rather than through the government itself. Medicare Advantage must offer coverage that is at least equivalent to Medicare Parts A and B.

Each Medicare Advantage plan can charge different out-of-pocket costs. They can also have different rules for how you get services. In most cases, you’ll need to use healthcare providers who participate in the plan’s network. Some plans won’t cover services from providers outside the plan’s network and service area. If you join a Medicare Advantage Plan, you’ll still have Medicare, but you’ll get most of your Part A and Part B coverage from your Medicare Advantage plan.

Many of these plans offer annual limits on out-of-pocket costs. Many also provide benefits that Medicare patients otherwise would need to purchase via supplemental insurance such as a Medigap plan, and they may include co-pays, co-insurance, deductibles, and even costs related to insurance while traveling outside the U.S. Some plans may also include dental, vision, and hearing care. Note that hearing aids are not covered by basic Medicare, although some Medicare Advantage plans do cover hearing services as supplemental benefits.

Supplement or Medigap:

Medicare pays for much, but not all, of the cost for covered healthcare services and supplies. A Medicare Supplement Insurance (Medigap) policy can help pay some of the remaining health care costs, like copayments, coinsurance, and deductibles. Some Medigap policies also cover services that basic Medicare doesn’t cover, such as emergency medical care when you travel outside the U.S. You must have Medicare Part A and Part B to purchase a Medigap policy. Medigap isn’t compatible with Medicare Advantage—you may purchase one or the other.

Part D: Prescription Drug Coverage

Medicare offers supplemental prescription drug coverage through Medicare Part D. Enrollees in Medicare Part A or Part B may enroll in Part D to receive subsidies for prescription drug costs that Original Medicare plans do not cover.

Each plan can vary in cost and specific drugs covered but must give at least a standard level of coverage set by Medicare. Medicare drug coverage includes generic and brand-name drugs. Plans can vary the list of prescription drugs they cover (called a formulary) and how they place drugs into differ.

Enrolling in Medicare

If you’re receiving Social Security benefits when you turn 65, you’ll be enrolled automatically in Part A, which covers hospital costs, and Part B, which covers doctor visits. If you want Part D prescription drug coverage, you’ll need to enroll yourself — that’s not automatic.

If you’re not receiving Social Security benefits, you’ll sign up for Medicare through the Social Security Administration website. You typically should do so in the seven-month window around your 65th birthday (which includes the three months before the month you turn 65, your birthday month, and the three months after your birthday month) to avoid permanent penalties and long waiting times for your insurance to start. (If your birthday is the first day of the month, this period will include the four months before and two months after your birthday month.)

If you want Medicare Supplement Insurance, or Medigap, you sign up during the six-month Medigap enrollment period, which starts the month you turn 65 and are enrolled in Medicare Part B. The private insurers who provide Medigap plans are required to take you if you sign up during that period. Otherwise, there is no guarantee they will sell you a Medigap plan, or they could charge you more for a plan.

For further questions, see.

https://www.cms.gov/

https://www.medicare.gov/publications/10050-Medicare-and-You.pdf

https://www.cms.gov/newsroom/fact-sheets/2024-medicare-parts-b-premiums-and-deductibles

https://www.medicare.gov/

https://www.ssa.gov/benefits/medicare/

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