Your Money, Your Future
Your Money, Your Future

If you miss this Medicare deadline, it could hurt your health

Key Points
  • The time to make changes runs from Sunday through Dec. 7.
  • If you're happy with your coverage, you don't need to do anything.
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It's likely you've started hearing chatter about Medicare's open enrollment period, which begins Sunday and runs through early December.

If you're like many older Americans, the question is whether you need to do anything.

Put simply, it depends.

"A lot of people won't need to do a darn thing," said certified financial planner Hans "John" Scheil, CEO and owner of Cardinal Retirement Planning in Cary, North Carolina.

In basic terms, the enrollment period, which lasts until Dec. 7, is for adding or changing coverage related to Medicare Part C (also known as an Advantage Plan) and Part D (prescription drug coverage).


Part A. This covers inpatient stays at hospitals, skilled-nursing facilities and the like. As long as you've paid into the system by working the equivalent of about 10 years, you won't pay any premiums. If not, you'll have to pay for it.

Part B. Everyone pays premiums for this coverage, which generally includes outpatient services and supplies. Higher incomes generate higher premiums: If you're single and have an income of more than $85,000 or are married with a joint income of at least $170,000, you will pay more.

Part C. Also called Medicare Advantage, the program lets people choose from a Medicare-approved private insurance plan instead of Parts A and B. Each plan comes with differing variables, ranging from coverage to deductibles and co-pays.

Part D. This is prescription-drug coverage. A voluntary option, it often ends up being included with an Advantage Plan. If you have Parts A and B instead of an Advantage Plan, you can purchase Part D coverage separately.

Here's a quick checklist to help you decide. (All changes take effect Jan. 1.)

1. You have a Medicare Advantage plan and want to change plans (or revert back to just Parts A and B).

2. You received a notice that your Advantage plan coverage is changing and you want to comparison shop.

3. You have Original Medicare (Parts A and B), and possibly a Medigap policy and want to switch to an Advantage Plan.

4. You want to join a Medicare prescription drug plan (Part D), switch to another, or drop this kind of coverage altogether.

If you're happy with your coverage or OK with any upcoming changes, there's no action needed.

A lot of people won't need to do a darn thing.
Hans "John" Scheil
owner, Cardinal Retirement Planning

The annual fall enrollment period has nothing to do with initially signing up for Medicare. In that case, you get seven months to register instead of seven weeks.

The clock starts ticking three months before the month in which you turn 65 and ends three months after your birthday month. So, for example, if the big day is June 15, your signup period begins March 1 and ends Sept. 30.

If you are still working and get health care through your employer, you might be able to delay signing up without paying a penalty. Generally speaking, it's during your initial enrollment period that you must sign up for Medicare Parts A and B.

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You also can enroll in Part C (a Medicare Advantage plan) or Part D (prescription drug coverage) during your initial signup. Keep in mind that if you decide not to get drug coverage when you're first eligible for Medicare, you'll generally pay a late enrollment penalty forever.

If you want to purchase or change a Medigap policy — which is separate from an Advantage Plan — different enrollment rules apply.

Medigap is used only with Original Medicare (Parts A and B) to eliminate holes in coverage and reduce out-of-pocket expenses. These policies do not offer prescription drug coverage, however, which means you would need to sign up for Part D separately.

What is an Advantage Plan?

Also known as Medicare Part C, an Advantage Plan provides coverage from an insurance company — i.e., Aetna, Humana — that takes the place of Original Medicare (Parts A and B).

While these approved plans are regulated by the Center for Medicare and Medicaid Services, they are administered by the insurance companies and can vary in terms of coverage.

Most Advantage Plans charge a monthly premium in addition to the Part B premium you already pay, although some do not. For 2017, that Part B amount was $134 (although you could up end up paying less). The amount for 2018 has not yet been announced.

Also this year, the estimated average monthly cost for an Advantage Plan was $31.40, according to the National Council on Aging. The group cautions, however, that the amount can range from zero to more than $200, depending on your location and coverage.

Most Advantage Plans include prescription drug coverage, which means you don't have to sign up for Part D separately.

"They sometimes add other benefits, like vision, dental or even gym memberships," Scheil said.

Yet because they typically are HMOs or PPOs, your options for providers might be limited. If it's an HMO, you must visit in-network providers. PPOs might let you go out of network to your favorite doctor, but you'll pay more.

"That's one of the biggest downsides to Part C," Scheil said.

What about Part D?

Part D, meanwhile, is for prescription drug coverage. If you get an Advantage Plan and it includes prescription drug coverage, there is no need to worry about Part D.

However, if you have a Medigap policy along with Original Medicare, you would need to purchase a Part D plan separately to get prescription drug coverage. Each Part D plan can vary in cost and drugs covered, so it's worth carefully reviewing what's included.

For help with finding and comparing Medicare Advantage or prescription drug plans, you can visit the Medicare Plan finder at the Medicare website. Or, call the Medicare help line at 800-633-4227.