Medicare is the national health-care program for all citizens, age 65 and over, not covered by an employee plan with 20 or more employees. You sign up for this program at 65 or when you or your spouse loses employer coverage. After that, you experience an annual open enrollment period every year that runs between Oct. 15 and Dec. 7. We are two days shy of the ending date.
During this period, you are deciding your coverage for the following year. Your health may have changed. Maybe you have a new doctor or your medication has changed. Be sure to get coverage in place before Dec. 7.
For 2020, Medicare Part B premiums will increase from $135.50 to $144.60. This is an increase of $9.10 or 6.7%. The annual deductible for Medicare Part B will be $198, or an increase of $13.
The IRMAA charge, which raises Part B premiums for higher-income earners, will increase to $174,001. This is the first year there has been inflation adjustment in this expense. Remember, the easiest way to be required to pay this higher cost is taking too much money out of qualified accounts. This might happen when doing Roth conversions.
Remember, the Social Security cost-of-living increase was announced in October. For 2020, it is 1.6%. This means that for every $1,000 of benefit, seniors will receive a $16 increase. This means most of the higher SS benefit will be used to cover the higher Part B premium.
Good news for 2020 is that Medicare Advantage plans have decreased 14%, or $23, on average. Some plans have enhanced benefits.
Another important change is Plan F Medigap plans will not be available to seniors who turn 65 after 2019. These plans are often considered the Cadillac of Medicare because they cover almost all cost.
This does not include pharmaceuticals or other things not covered by traditional Medicare such as dental, eye care or hearing aids. Some Advantage plans do provide help with these costs. People already on this plan type will be allowed to continue.
The next-most compressive plan will be Plan G. It covers all of the things in Part F, except Part B deductible, which is $198 per year. It is a little confusing because some letters are used in more than one place. Original Medicare has four parts: Part A for hospital coverage, Part B for doctors and testing, Part C for Advantaged plans and Part D for prescription coverage. Medigap plans also are distinguished by letters of the alphabet. Be careful not to mix them up.
During open enrollment, there are more Medicare scams than other times of the year. Scammers will sometimes call your house and demand information immediately. Remember; never give your SS number to anyone who calls. Your insurance company already has this information.
Some scammers have told people they need to buy a gift card or wire money right away. Some show up at your house unannounced. There are strict rules on what an agent is allowed to do, and none of the above things are permissible.
People under 65 also are making decisions now. They get an extra week, until Dec. 15, to make their choices. Even though the penalty under the federal “shared responsibility payment” is not in affect, it is dangerous to not have health insurance. Many people will qualify for a subsidy at www.healthcare.gov.
There also may be some association plans or other ways to help control cost. Do not expose yourself to the financial risk of not having insurance.
Gary Boatman is a Monessen-based certified financial planner and the author of “Your Financial Compass: Safe passage through the turbulent waters of taxes, income planning and market volatility.”
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