What You Need to Know About Medicare Open Enrollment 

Last year, Marie turned 65 and she retired from work. Since then, she’s felt alive and free. She now enjoys traveling, taking classes, and checking items off her bucket list, including ziplining. One thing has been on her mind, and it’s not her fear of heights. Marie finds anything having to do with Medicare to be extremely confusing and she has been putting off thinking about it for as long as she could. 
 
Marie enrolled in Medicare for the first-time last year and wants to make some changes to her coverage, since she
feels she wasn’t well informed initially. She realizes that she is going to have to pay some attention to it now, since it’s that time of year when people with Medicare review their health insurance choices for the coming year.
 
If you are enrolled in Medicare — the federal health insurance program for people 65 and older and some younger people with disabilities — you will soon have the opportunity to make changes to your health and prescription drug coverage. Medicare’s Fall Open Enrollment begins next Monday, October 15 and lasts through Friday, December 7. 
 
During Fall Open Enrollment, you will be able to join a new Medicare Advantage plan (from a private company; instead of using Original Medicare) or a standalone prescription drug plan (a Medicare Part D plan). You can also switch between Original Medicare (with or without a Part D plan) and Medicare Advantage. Any changes you make during Fall Open Enrollment will take effect on January 1, 2019. 
 
Marie is not alone. At this time and when we first enroll, many of us find Medicare to be intimidating. There are a lot of options, confusing terminology, and people everywhere trying to sell you something different. People typically have a lot of questions as they research their Medicare options, which primarily include Original Medicare, Medicare Advantage and Medicare Supplement plans, before finding the plan(s) that best fits their needs.
 
Here are a few of the most commonly asked questions, and answers to help:
 
I heard Medicare Advantage Premiums will decrease. Is this true? 
 
CMS officially announced a 6% decrease in Medicare Advantage (MA) premiums in 2019 as the result of MA enrollment, health plan options, and benefits increase. CMS stated that the average 2019 MA premium will decrease from $29.81 to $28.00 and improve health plan affordability for most beneficiaries. 83% of MA enrollees are expected to have either the same or a lower premium in 2019. CMS estimates that 46% of MA beneficiaries in their current plan will have a $0 premium.
 
In addition, Medicare Advantage is offering 600 more health plan options and increasing the average number of MA choices for consumers in 2019. An estimated 3,700 MA health plans will be available in the market next year, with 91% of beneficiaries able to choose from 10 or more plan options. CMS anticipates MA enrollment to increase from 20.2 to 22.6 million enrollees in 2019.
 
What are the premiums and deductibles for 2019?
 
You may pay monthly Medicare premiums along with deductibles, co-insurance and co-payments for typical medical services. For 2019, costs are as follows:
 
Part A: Typically, there is no premium charge for Part A. The annual deductible is $1,340.
Part B: The premium for part B, part of the original Medicare program, is $134 per month, the annual deductible is $183, and there typically is a 20 percent co-pay.
Part C plans: The Medicare Advantage plans charge additional premiums, and co-pays vary.
Part D plans: The prescription drug coverage plans charge additional premiums, and co-pays vary.

I read somewhere that high-income taxpayers will face a new higher tier of IRMAA surcharges beginning in 2019. What is that all about?



Starting in 2019, there will be a new Income Related Monthly Adjustment Amount (IRMAA) tier for Medicare Part B premium surcharges for individuals earning more than $500,000 (or married couples with AGI in excess of $750,000), stacked on top of what were additional adjustments to the Medicare premium surcharge tiers that just took effect in 2018.

Since 2006, the Medicare Modernization Act has required that certain “high-income” individuals pay an IRMAA as a surcharge on their Medicare Part B premiums. In 2018, the surcharge started at an extra $53.50/month, and could rise as high as an extra $294.60/month on Medicare Part B, and applied to those whose (Modified) Adjusted Gross Income exceeded $85,000 (for individuals, or a MAGI above $170,000 for married couples). The end result of these IRMAA surcharges increased the total percentage of Part B costs that are covered by premiums, from 25% (the amount covered by the base $134/month Medicare Part B premium) to as high as 80% (for those paying the full $134 + $294.60 = $428.60/month premium).

Under the Bipartisan Budget Act of 2018, a new additional tier of surcharges was introduced for 2019, at a MAGI threshold of $500,000 for individuals (or $750,000 for married couples). Notably, the threshold for married couples is “only” 150% of the threshold for individuals, introducing an aspect of “marriage penalty” for high-income couples on Medicare. The new tier is intended to lift the Part B premium coverage from 80% to 85% for those high-income earners on Medicare.
Please see this chart for more details:
 
What does Medicare cover and what does it not cover?
 
Medicare covers roughly half of all medical and skilled nursing care expenses for an average Medicare enrollee. Some of the items and services Medicare does not cover include:
 
Long-term care;
Routine dental care;
Dentures;
Cosmetic surgery;
Acupuncture;
Hearing aids; and
Exams for fitting hearing aids (Part B covers diagnostic hearing and balance exams or screenings if ordered to see if you need medical treatment.)
 
Can I enroll in Medicare at any time?
 
For your first-time enrollment, usually it is wise to enroll at age 65 if you are not working or do not have health insurance through your employer. Generally, you have a seven-month window around your 65th birthday (three months before and four months after) to enroll.
 
But if you are working and older than 65, you can enroll within up to eight months of quitting your job. If for some reason you miss your initial enrollment window, you may pay a late penalty of 10% of your premiums. Note that you may also be eligible to enroll because of past work history (at another employer), or you may be eligible because your spouse is eligible.
 
For existing Medicare beneficiaries, there is an annual open enrollment period of about seven weeks in the fall, as mentioned above. During open enrollment, you can explore any new health and/or drug plans that may fit your health-care needs.
 
How Can I Get Help with Medicare Open Enrollment?
 
All of the following can help you comparison shop and complete the enrollment process:
 
  • If you use the Internet, the best tool by far is at www.medicare.gov. Once you’re on the site, click on the green “FIND HEALTH & DRUG PLANS” button.