Medicare Open Enrollment: Getting the most out of your health insurance

All right. Health care changes as you age. So if you are over the age of 65, you are eligible for Medicare, the federal health insurance program provided by the government. But what does that mean? It's not as straightforward as it sounds. Open enrollment. I feel like open enrollment makes us all just sends a little bit of concern through all of us, no matter what level, what you're picking for health care. So let's talk about it. Michael Mazerant, Retirement Education Foundation is here. how you doing buddy good how are you guys doing you chose a very easy topic i'm sure to navigate right i know i feel like whenever people hear health insurance medicare they go oh i don't want to talk about this i totally get it it is complicated and we were just talking it's not one of those things where people tend to assume oh it's set and forget pick a plan and call it a day yeah please typically people should be shopping every single year or just at least double checking to make sure that the plan that they're on is still covering their doctors their networks their prescriptions because these things can change every single year and that's really the big takeaway if you like your doctor if you have a doctor your doctor may not be in next year's plan correct exactly and that's why it's important to double check every year during open enrollment to make sure if those things are still covered because you don't want to get caught off guard it's February or March you're going for your appointment they say oh sorry you're out of network now and at that point it's too late to go fix it so making sure that you're finding the right coverage, the right network during open enrollment is really important. So we're going to keep this as simple as possible, but also explain a few details of Medicare. So there's Medicare Part B and D, right? So there's Medicare, not to get too in the weeds, there's Medicare A, B, C, and D. Oh, okay. I thought they just skipped those other letters. Okay, I got it. So A and B are the ones that people are most familiar with because Part A and B, you are enrolling when you're turning 65 unless you're employed if you're still if you're still employed and you're on an employer plan you can stick on that employer plan until you retire but it's really important that if you are not working or if not covered by health insurance when you're turning 65 or once you do retire it is really important to enroll on parts a and b when you turn 65 or when you retire because if you miss those windows you can get stuck with a penalty forever a lifetime penalty if you lifetime penalty yes a lifetime penalty if you miss those windows so if you're turning 65 and you're not on an employer's health insurance plan or if you are on an employer's health insurance plan and you're retiring post 65 it's really important to make sure there's no gap in your coverage and that window now by the way is open through december 7th i believe correct so it opened october 15th it's open through december 7th for open enrollment now a lot of people don't turn 65 during that window so if you're turning 65 not during open enrollment yeah you have three months before your birth month you have your birth month and then you have three months after your birth month so it's a seven month window if you're turning 65 or retiring not during that open enrollment period all right man that lifetime penalty really uh got me for a lifetime for one clerical here right well and this is another thing too is that people for some reason people tend to make a lot of retirement decisions around medicare and i feel like people think that it's free medicare is not free parts a and part part b has a monthly cost and that's tied to your income people spend on average about 6,500 per person on Medicare between premiums, out-of-pocket deductibles, correct 6,500 a year per person for Medicare, correct, got it and people think, well I'm gonna work until 65 because I don't want to pay for private health insurance with this incorrect assumption that Medicare is free, Medicare is not free, and so this is why it's so important that people understand, yeah, why do you think it's free? I think it's, it's it is much cheaper than private health insurance if someone retires pre-65 to pay for private health insurance before Medicare that is more expensive than Medicare, but Medicare is not free so it's important that when people are thinking about retirement, they're baking in this Medicare cost because health insurance is not free in retirement. This might be a silly question but do people confuse Medicare and Medicaid? All the time. Medicare and Medicaid, very common to mix up. So Medicare is for people who are typically 65 or older. Medicaid, it's more of an income distinction where Medicaid is typically reserved for lower income people. And really, if someone can't afford Medicare policies, Medicare is more robust coverage. so if someone needs to be on Medicaid because their income prevents them from having Medicare, it is what it is. It's fine. But ideally we want to have people on Medicare for better health insurance coverage. Michael when you say shop around it's so it's in my mind you just check the box I want Medicare. I get that there's part A, B, C, and D and certain levels offer you maybe more a little bit different structure. Those are your four choices though or is there more than that? So those are the four categories and really the two main choices on Medicare are Medicare Advantage plans versus is Medicare Supplemental Plans, or Medigap as it's sometimes called. So Supplemental Plans, Medigap, cost more than Medicare Advantage. You'll see commercials all the time, especially right now for Medicare Advantage plans, because they're cheaper. And for some people, Medicare Advantage can be an okay choice, but Medicare Advantage, similar to Medicaid, is a more limited coverage. And so if someone can afford Medicare Supplemental Plans, they should be purchasing those instead, not Medicare Advantage, because once you purchase a Medicare, once you choose a Medicare Advantage plan, you're then stuck on that plan. So people go, I'm 65, I'm healthy, I don't have that many doctor's expenses, I'll take the cheaper Medicare Advantage plan now, and then I'll get supplemental, the more expensive, more thorough insurance down the road when I'm sicker. The problem is, down the road, if you choose Medicare Advantage, now they can underwrite you and they can deny you the request to increase your coverage. So you're not purchasing health insurance when you're 65 for your health when you're 65. You're purchasing health insurance for what could your health look like in 5, 10, 15, 20 years. So we beg people, do not be short-sighted with your Medicare selections. Even if Medicare supplemental costs a little more, if you can afford it, it's money well spent. So basically what you're saying is eyes wide open. There are a lot of great resources. Medicare.gov, honestly, I know it's a government website, but it's honestly a good, good resource. There are lots of good resources out there. This is an area where if you spend an hour, spend two hours educating yourself, it'll pay dividends the rest of your life. Fantastic. Thanks for the info, Michael. We're going to see you next hour. Yeah. We're going to have some more fun. Always. Talking money, raising our financial IQ, Al. That's what we're trying to do over here.