INSIDE THIS EDITION:
Is the Bull Market Close to an End?
Weekly Snapshot of Global Asset Class Performance
Medicare Open Enrollment Started October 15th
401k Plan Manager
Diversification and Efficient Frontier Portfolios
It has been more than 10 years since the S&P 500 bottomed on March 9th of 2009. Is this extended bull market near its end? The answer depends on the lens with which it is viewed.
Medicare Open Enrollment Period Began October 15th
By Scott A. Bishop, MBA, CPA/PFS, CFP®
What is the Medicare open enrollment period?
The Medicare open enrollment period is the time during which people with Medicare can make new choices and pick plans that work best for them. Each year, Medicare plans typically change what they cost and cover. In addition, your health-care needs may have changed over the past year. The open enrollment period is your opportunity to switch Medicare health and prescription drug plans to better suit your needs.
When does the open enrollment period start?
The Medicare open enrollment period begins on October 15 and runs through December 7. Any changes made during open enrollment are effective as of January 1, 2020.
During the open enrollment period, you can:
- Join a Medicare Prescription Drug (Part D) Plan
- Switch from one Part D plan to another Part D plan
- Drop your Part D coverage altogether
- Switch from Original Medicare to a Medicare Advantage Plan
Switch from a Medicare Advantage Plan
- to Original Medicare
- Change from one Medicare Advantage Plan to a different Medicare Advantage Plan
- Change from a Medicare Advantage Plan that offers prescription drug coverage to a Medicare Advantage Plan that doesn’t offer prescription drug coverage
- Switch from a Medicare Advantage Plan that doesn’t offer prescription drug coverage to a Medicare Advantage Plan that does offer prescription drug coverage
What should you do?
Now is a good time to review your current Medicare plan. As part of the evaluation, you may want to consider several factors. For instance, are you satisfied with the coverage and level of care you’re receiving with your current plan? Are your premium costs or out-of-pocket expenses too high? Has your health changed, or do you anticipate needing medical care or treatment?
As a starting point, listen to our interview on the STA Money Hour on maximizing your Medicare benefits. The open enrollment period is the time to determine whether your current plan will cover your treatment and what your potential out-of-pocket costs may be. If your current plan doesn’t meet your health-care needs or fits within your budget, you can switch to a plan that may work better for you.
How do you decide on what Medicare Plan is Right for you?
Source: 2016 Medicare Brochure “Choosing a Medigap Policy”.
What’s new in 2019?
The “Donut Hole” is closing!
Beginning in 2019, Medicare Part D Prescription Drug Plan participants will no longer be exposed to a coverage gap, referred to as the donut hole. Due to changes made by the Bipartisan Budget Act of 2018, Part D participants will see a reduction in their out-of-pocket costs for brand-name drugs from 35% to 25% — a reduction that was originally scheduled to take place in 2020. The gap in coverage for generic drugs will not be closed until 2020. In 2019, Part D participants will pay 37% of the cost of generic drugs.
Also in 2019, the Medicare Advantage Disenrollment Period will be replaced by the Medicare Advantage Open Enrollment Period. The Medicare Advantage Disenrollment Period, which ran from January 1 through February 14, allowed you to drop your Medicare Advantage Plan and return to Original Medicare (Parts A and B) and it allowed you to sign up for a Medicare Part D Prescription Drug Plan. In 2019, a new Medicare Advantage Open Enrollment Period will run annually from January 1 through March 31. If you’re enrolled in a Medicare Advantage Plan, you’ll have the opportunity to switch to another Medicare Advantage Plan, switch to Original Medicare Parts A and B, sign up for stand-alone Medicare Part D Prescription Drug Plan (if you are covered by Original Medicare), or drop your Medicare Part D Prescription Drug Plan.
What’s was new in 2020?
Starting January 2020, Medigap Plans will no longer be allowed to cover Plan B deductibles for those turning age 65. This should be a minor change since the deductible is currently $185.
A bigger change is that Medigap Plan F, a popular plan which covered all of Part A and Part B deductibles will no longer be offered for those turning age 65 (but it will still be available for those that turned age 65 last year and earlier. Plan G will still be available.
What will you pay in 2020 for Medicare Part B?
Medicare premiums, deductibles, and coinsurance amounts change annually. Here’s a look at some of the costs that will apply in 2020 if you’re enrolled in Original Medicare (Part A and Part B).
According to the Centers for Medicare & Medicaid Services (CMS), most people with Medicare who receive Social Security benefits will pay the standard monthly Part B premium of $135.50 in 2020. However, if your premiums are deducted from your Social Security benefits and the increase in your benefit payments for 2020 is not enough to cover the Medicare Part B increase, then you may pay less than the standard Part B premium.
People with higher incomes pay more than the standard premium. If your modified adjusted gross income as reported on your federal income tax return from two years ago is above a certain amount, you’ll pay the standard premium amount and an Income Related Monthly Adjustment Amount (IRMAA), which is an extra charge added to your premium, as shown in the following table:
What will you pay in 2020 for Medicare Part B?
Other Medicare Part A and Part B costs in 2019 include the following:
- The annual Medicare Part B deductible for Original Medicare is $185.
- The monthly Medicare Part A premium for those who need to buy coverage will cost up to $437. However, most people don’t pay a premium for Medicare Part A.
- The Medicare Part A deductible for inpatient hospitalization is $1,364 per benefit period. An additional daily coinsurance amount of $341 will apply for days 61 through 90, and $682 for stays beyond 90 days.
- Beneficiaries in skilled nursing facilities will pay a daily coinsurance amount of $170.50 for days 21 through 100 in a benefit period.
Where can you get more information?
Comparing the Medicare coverage you currently hold to other Medicare plans can be confusing and complicated. It’s important to pay close attention to notices you receive from Medicare and from your plan. Take advantage of helpful resources available by calling 1-800-MEDICARE or by visiting the Medicare website at www.medicare.gov.
Financial Planning and Investment Advice offered through STA Wealth Management (STA), a registered investment advisor. STA does not provide tax or legal advice and the information presented here is not specific to any individual’s personal circumstances. To the extent that this material concerns tax matters or legal issues, it is not intended or written to be used, and cannot be used, by a taxpayer for the purpose of avoiding penalties that may be imposed by law. Each taxpayer should seek independent advice from a tax professional based on his or her individual circumstances. These materials are provided for general information and educational purposes based upon publicly available information from sources believed to be reliable—we cannot assure the accuracy or completeness of these materials. The information in these materials may change at any time and without notice. As always, a copy of our current written disclosure statement discussing our services and fees continues to be available for your review upon request.