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Are you ready for Medicare open enrollment?

Key takeaways

  • Medicare's Annual Enrollment Period begins on October 15 and runs through December 7.
  • Examine your needs and evaluate your options ahead of time, so you're prepared to make the necessary changes before the enrollment period ends.
  • Consider working with a knowledgeable professional to help ensure you are able to find a solution that suits your specific circumstances.

Medicare's Annual Enrollment Period (AEP) begins on October 15 and runs through December 7. During this period, you can add, drop, or switch your coverage, such as supplemental Medigap plans, Medicare Advantage plans, and your Part D prescription drug plan—but should you? Here are a few things to consider as you review your options during this year's Medicare AEP.

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Why make a change?

There are a few reasons why it might be worth changing your Medicare coverage. They include:

  • The cost of coverage. If you're looking to save money, you may be able to find a less expensive plan that provides you with the necessary coverage at a lower cost.
  • Changes in your health. Perhaps you've developed a new condition that requires additional care or have ended a course of treatment and can now afford to scale back your coverage.
  • Increased drug prices. If your health insurance company raised the price of medications that you rely on, you may be able to find a better deal with another provider.
  • Dissatisfaction with available services. You may have found that your plan doesn't provide sufficient access to certain treatments or specialists that you would like available to you.
  • Simplicity. If you find juggling multiple plans challenging, the simplicity of an all-in-one Medicare Advantage plan, which may combine Medicare Part A hospital insurance, Part B medical insurance, and Part D prescription coverage may be appealing.

Whatever your reason, having a clear sense of what's motivating your desire to make a change will help you better identify the right plan for you. And if none of the above reasons apply to your situation, you may be just fine keeping everything as it is. In any event, changes to your coverage will take effect on January 1 of the upcoming year.

Medigap supplemental insurance plans

If you haven't already, or if you have experienced changes in your health that make you think you may need more options when it comes to your health care, you may want to consider enrolling in a Medigap insurance plan. Medigap plans are sold by private insurance companies and supplement your Original Medicare (Parts A and B) coverage, which only covers a portion of your overall health needs. These plans may help eliminate many Medicare out-of-pocket costs, extend skilled nursing home and hospital coverage, and cover limited health care costs when traveling abroad. You can also generally keep your doctors under Medigap.

Medigap plans can be costly, so it's important to thoroughly evaluate your needs before enrolling. Consider not just the current state of your health, but factors that may impact your health in the long term, such as your family history. You should also consider what effect the cost of such a plan could have on your finances in retirement. It's important to seek a balance between the appropriate amount of coverage for your situation and the appropriate cost for your long-term financial situation.

If you drop Medigap and want to re-enroll later, you will most likely need to go through medical underwriting, the process that insurance companies use to determine your health status, what coverage to extend to you, and what the appropriate price should be. You may end up paying a higher premium or not qualifying for coverage at all.

Medicare Part D prescription drug plans

If prescription drug costs or the availability of certain medications is a concern for you, it may be worth considering a new Medicare Part D prescription drug plan. Be careful not to put too much focus on the monthly premiums for Part D plans when doing your research. Pick a plan based on how the prescription drugs you're taking are covered. And pay attention to Medicare Part D plans with special rules that may limit prescription usage or force you to satisfy requirements before you can have a prescription drug.

The Medicare Plan Finder at Medicare.gov will show you what plans are available in your area and allows you to input information about your current prescription drugs to better understand which plans will cover them and at what cost. You can also review ratings for the plans, to get a sense of how others feel about the service they've received.

If you're already enrolled in a Part D plan, you may have received an "Annual Notice of Change" letter from your provider, which details things such as cost increases and changes to the price or availability of certain drugs. Familiarize yourself with these changes before seeking out a new plan to be sure you're getting the plan that is right for your situation.

Medicare Advantage: An all-in-one option

If the cost and complexity of juggling Original Medicare, a Medigap plan, and a Part D plan is causing you headaches, you may want to consider enrolling in a Medicare Advantage plan. These plans try to simplify the Medicare experience by offering combined coverage (they combine Parts A and B with benefits such as vision, dental, hearing, or prescription drug coverage.) in a single, low-cost monthly premium (some as low as $0). Sounds great, right?

It can be. But it's important to look closely at the details. The cost of Medicare Advantage premiums can vary widely based on factors such as convenience, flexibility, and where you live. These plans often have smaller networks of doctors, hospitals, and pharmacies, which can be especially difficult if you intend to travel extensively or plan to split your time in two different regions. There could be substantial fees and high out-of-pocket costs for utilizing out-of-network providers as well, offsetting the plan's low monthly premiums.

A little preparation goes a long way

Understanding the basics of Medicare can help you make more informed decisions about your health care coverage during the Annual Enrollment Period, but if you are still unsure of what's best for your situation, consider working with a professional. Fidelity Medicare Services® has a team of licensed Medicare advisors who can help you decide whether you should keep or change your existing coverage during the annual enrollment period. They can help you evaluate your options and help you find coverage that takes your specific needs and concerns into account.

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This information is intended to be educational and is not tailored to the investment needs of any specific investor.

Fidelity does not provide legal or tax advice. The information herein is general in nature and should not be considered legal or tax advice. Consult an attorney or tax professional regarding your specific situation.

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