Medicare 2019 – Key Enrollment Dates and Important Changes
The leaves are changing colors and a cool breeze is in the air, which means many retirees are securing their winter travel plans. However, before jumping on the plane to escape the cold winter months that lie ahead, it is also time for Medicare participants to decide if changes should be made to their health insurance plans. As outlined below, there are key enrollment dates and changes to Medicare in 2019-2020 that you should be aware of.
Open enrollment for current Medicare recipients begins October 15 and ends December 7. By now, you should have received your “Plan Annual Notice of Change” listing any changes to your plan. If not, contact your plan provider.
During the open enrollment period certain changes can be made:
- Medicare recipients can switch to Medicare Advantage plans and Medicare Advantage recipients can switch to traditional Medicare.
- Medicare Advantage plan participants can switch from one plan to another.
- Medicare Part D participants (prescription drug coverage) can switch from one plan to another.
- One can sign up for Medicare Part D if they did not sign up for a plan during their initial Medicare enrollment. A late enrollment penalty may apply.
Note: Auto re-enrollment occurs for Medicare Advantage as well as for Part D participants, however, Part D auto-enrollment only occurs if the current Part D plan is still available.
Here are a few other key enrollment dates:
- January 1 – February 14: Participants can leave Medicare Advantage and switch to original Medicare and Medicare Part D.
- January 1 – March 31: Special enrollment period to sign up for original Medicare if the initial enrollment period is missed. Coverage will not start until July 1 and late enrollment penalties may apply.
In addition to these key enrollment dates, there are some noteworthy changes to Medicare in 2019-2020 as summarized below:
- The Medicare Plan Finder tool (https://www.medicare.gov/plan-compare/) has been upgraded for the first time in over 10 years.
- Medicare Part B premiums and deductibles are expected to be slightly higher in 2020. Since the Social Security cost of living adjustment is expected to be greater than the Medicare increase, most Part B enrollees are expected to be subject to this increase.
- Some enrollees have Medigap plans (supplemental coverage) that pay their Medicare Part B deductible. Starting in 2020, these plans will no longer be available to newly-eligible enrollees, however, those that have them can keep them.
- For the first time since they were introduced in 2007, there will be a cost of living adjustment to the Medicare premium brackets for high-income participants, which results in higher Medicare premiums. This adjustment will be applied to all income brackets except for the highest bracket. In 2020, Medicare premiums start to increase for married participants that have $174,000 in income ($87,000 for single filers) and reach the maximum increase at $750,000 of income ($500,000 for single filers).
- The percentage of costs participants pay for covered drugs under Part D will now be capped at 25%, after meeting their deductible. The maximum allowable deductible will increase to $435 and the out-of-pocket threshold where catastrophic coverage begins will increase to $6,350. These are revised thresholds resulting from the “donut hole” of prior years now being fully closed.
Although for many Medicare participants, simply letting their benefits auto-renew with no action required, will be the right choice, the open enrollment period that occurs between October 15 and December 7 is the time for participants to review their benefits and determine if any changes should be made. Your BDF team is here to help you think through these considerations and give guidance as needed.
John D. Smith, CFP® is a Wealth Manager at BDF. A member of the Business Owner Team, he is adept at helping business owners integrate their unique business opportunities and risks into their personal wealth management plan, due to his 25+ years of experience. He finds that business owners, in particular, are often so focused on making sure that their business operations are running smoothly, they may overlook their personal financial well-being. John received his Bachelor of Science degree in Financial Counseling and Planning from Purdue University. He is a member of the Chicago Estate Planning Council and the National Association of Estate Planners and Councils and holds the ACCREDITED ESTATE PLANNER® designation. He is a member of the Financial Planning Association and a member of the University Club of Chicago and is Chairman of the club’s Wine Society.