2022 Medicare Open Enrollment is Approaching

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The period of 2022’s Medicare open enrollment occurs between October 15 and December 7. Are you prepared?

Medicare is an important component of retirement and financial planning. While you may be approaching retirement age or simply be interesting in educating yourself on what Medicare is, this article explores the ins-and-outs of Medicare to help you understand how to qualify and more:

Background

Vintage lightbulb hanging from string on dark background; idea imageryMedicare is a U.S. government national health insurance primarily offered to individuals 65 or older but also to those with a disability status determined by the Social Security Administration (SSA). While it’s said that the idea for Medicare formulated as far back as 1912 with President Theodore Roosevelt, the program did not officially go into effect until 1965 under President Lyndon B. Johnson. Flash forward to today, Medicare is currently administered by the Centers for Medicare and Medicaid Services (CMS). Provisions have been added to the program since its inception, including arguably one of the most notable provisions, short-term skilled nursing services following a hospitalization. 

Who Qualifies

As we hinted to above, you do not have to be retired to receive coverage. Data from last August shows that there were over 63 million people in the U.S. receiving coverage through Medicare, and spending reached over $900 billion.

Medicare Options

When you first become eligible for Medicare, there are two main ways to obtain coverage during the open enrollment period. Your options are Original Medicare and Medicare Advantage (also known as Medicare Part C). Since Original Medicare and Medicare Advantage may not cover all the services you’re looking for, you may choose to obtain a Medigap policy to help supplement the costs. 

Original Medicare Parts A, B and D

Original Medicare consists of Parts A, B and D.

Part A: Hospital insurance helps cover the costs of:

  • Hospital inpatient care (deductible and coinsurance apply)
  • Skilled nurse facility (on a short-term basis with some coinsurance, depending on the duration of the stay)
  • Some hospice and home care​

Hospital insurance does not cover the costs of:

  • Private rooms in a hospital or skilled nursing facility
  • Private nursing care
  • 24-hour care at home
  • Household services
  • Meal delivery

Part B: Medical insurance helps cover the costs of:

  • Doctors, labs, supplies, outpatient cost provisions and many preventative care costs​
  • Part-time home health care on a limited basis
  • 80% of costs after you pay a $233 deductible ​

Does not cover all medical needs, such as:

  • Eye exams
  • Dental​
  • Dentures​
  • Hearing aids​
  • Long-term care​
  • Cosmetic surgery

Part D: Prescription drugs (voluntary) helps cover the costs of:

  • Both formulary and generic drugs

Plans are offered by a private insurance company for a premium and may have a deductible.

Medicare Advantage (also known as Part C)

Offered by private insurance companies, Medicare Advantage is a Medicare-approved plan that bundles parts A, B and usually D. Medicare Advantage is often compared to an HMO plan as, in most cases, your providers need to be in the plan’s network. Certain plans may offer extra services, including vision, hearing and dental.

Medigap

Medigap is different from Medicare Advantage (Part C), and the policy helps pay the costs that an Original Medicare Plan does not cover and offers a larger network of healthcare providers. Similar to Part C, the plan is offered by a private insurance company. 

Medicare Premiums

  • Premium for A: Often $0 charge​
  • Premium for B: Withheld from Social Security benefits based on income level. In 2022, the standard premium starts at $170.10/month and varies based on income
  • Premiums for C, D and Medigap: Charged by the private company

How To Apply

Medicare coverage starts on the first day of the month when an individual turns 65. A person who has taken Social Security benefits prior to age 65 will be automatically enrolled. A person who chooses not to enroll in Medicare when they are eligible, and rather enrolls at a later date, may incur a penalty. 

Aspects to Consider

It’s important to remember that Medicare does not cover all medical cost; therefore, you may opt to purchase Medicare Advantage or supplemental coverage utilizing Medicare consultants. Additionally, some doctors may only accept Medicare for existing patients. For additional information, please visit medicare.gov. Our retirement and financial planning experts are available to support you at any stage of this process. Contact us if you have any questions, and we’ll be in touch.

This report is based upon publicly available information and is provided for general information and education purposes. The information has been compiled from data considered reliable and we cannot assure the accuracy or completeness of these materials. The information in these materials may change at any time and without notice. This material should not be construed as insurance advice or an offer to buy insurance.
This publication contains general information only and Sikich is not, by means of this publication, rendering accounting, business, financial, investment, legal, tax, or any other professional advice or services. This publication is not a substitute for such professional advice or services, nor should you use it as a basis for any decision, action or omission that may affect you or your business. Before making any decision, taking any action or omitting an action that may affect you or your business, you should consult a qualified professional advisor. In addition, this publication may contain certain content generated by an artificial intelligence (AI) language model. You acknowledge that Sikich shall not be responsible for any loss sustained by you or any person who relies on this publication.

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