Impact of Health Care Expenses on Financial Planning - Focus on Medicare Open Enrollment: What You Need to Know

By Andi McNamara, CFP®
Vice President, Director of Financial Planning
Washington Trust Wealth Management

This time each year, it’s almost impossible to turn on your television or open your mailbox without being flooded with advertisements from insurance companies about Medicare open enrollment—each claiming to provide the best benefits for you. It can be overwhelming.

Your Open Enrollment Choices

Medicare—the federal health insurance program for individuals aged 65 and older, as well as some younger individuals with disabilities—has four parts: Part A (hospital insurance), Part B (medical insurance), Part C (Medicare Advantage plans), and Part D (prescription drug coverage). Medigap is a supplemental insurance policy sold by private companies that can be used along with Medicare Parts A and B to fill the gaps in their coverage.

Medicare’s open enrollment period (formally known as the “Medicare Advantage and Prescription Drug Plan annual election period”) is designed to allow you to review your Medicare coverage for the following year, ensuring that your plan still aligns with your healthcare and financial needs. During open enrollment, you can make changes to which parts you wish to enroll in and whether to enroll in a Medigap policy. If you’re already enrolled in Medicare, you can make changes to your plan during open enrollment from October 15 through December 7, with changes going into effect on January 1, 2024.

(Note that this differs from your Initial enrollment period, which is the seven-month period that includes the three months before your 65th birthday, your birthday month, and the three months after.)

So which plan is right for you?

During the open enrollment period, it's important to review your current Medicare plan(s), taking into consideration your healthcare needs, prescription drugs, and your financial situation. Think about any changes in your healthcare needs and whether your current coverage meets those needs. For example, you may want to ensure your preferred doctors and hospitals are in-network, and that any prescription drugs you take are covered.

The right plan depends on your own personal goals and needs. Other resources to evaluate include:

• You may want to read “Addressing Healthcare in Retirement: Protecting Your Future” and ”The ABCs of Medicare: When You’re Sixty-Four,” which walk you through the process of choosing Medicare/Medicare Advantage/Medigap options as part of your overall financial plan.
  
  
• Two federal websites – Medicare.gov or the Social Security Administration site at ssa.gov – also explore your Medicare options for your individual needs.
  
  
• Because insurance differs from state to state, each state also has a health insurance assistance program to help guide you with decision making around healthcare plans and costs.
  • Rhode Island: SHIP (State Health Insurance Assistance Program)
  • Massachusetts: SHINE (Serving the Health Insurance Needs of Everyone) Program
  • Connecticut: CHOICES (Connecticut’s program for Health insurance assistance, Outreach, Information and referral, Counseling, Eligibility Screening)

Washington Trust Wealth Management Can Help

Your Washington Trust Wealth Advisor helps you plan for your healthcare expenses as part of your long-term financial plan. We put this very important decision into context, including modeling different scenarios to determine how Medicare and Medigap premiums, out-of-pocket costs, health care cost inflation, using Health Savings Accounts, and long-term care coverage can impact your plan.