By Daniel Korleski, MBA
Preparing for retirement requires careful planning. Some people even have a retirement planning checklist. One of the most important items to have on this checklist is planning for healthcare. While navigating the many enrollment options of Medicare can be headache-inducing, it’s a necessary part of the process. Thankfully, we’ve simplified things by summarizing the multiple plans available and their enrollment periods. If you’re already enrolled in Medicare, now is a great time to reassess your coverage to ensure it’s still the best fit for your retirement needs. Since open enrollment starts soon, here’s what you need to know.
The Four Parts of Medicare
Medicare coverage is divided into 4 parts and each part has different coverage levels:
- Medicare Part A: Also known as hospital insurance, Medicare Part A covers inpatient hospital care and some nursing care coverage. If you or your spouse paid Medicare payroll taxes during your working years for at least 10 years, Part A is free for you. If you didn’t, you can still get coverage by paying a monthly premium.
- Medicare Part B: Part B is medical insurance coverage for some medical conditions and preventative care, including doctor visits and other outpatient services. You will pay a monthly premium for Part B coverage. Together, Parts A and B are known as Original Medicare.
- Medicare Part C: Known as Medicare Advantage Plan, this is an alternative to Original Medicare that is offered through Medicare-approved private companies. This plan bundles Part A and Part B and often includes Part D as well. Medicare Advantage plans also often cover additional services not covered by Part A, Part B, or Part D, including vision, hearing, and dental visits.
- Medicare Part D: This optional private insurance add-on includes drug coverage. Not to make things even more confusing, but Part D has a late enrollment penalty. Even if you don’t need prescription coverage when you are first eligible for Medicare, enroll in the plan to avoid extra long-term costs.
Your Open Enrollment Options
Keep in mind that open enrollment is not for those who have not yet enrolled in Medicare. If that’s you, your initial enrollment period is based upon your birthday, not a set date on a calendar. You need to sign up for coverage during the window of time that starts three months before the month of your 65th birthday and ends at the end of the third month after, for a total of seven months.
The open enrollment period affects each part separately. Here’s what you can do with your Medicare coverage:
- If you have Medicare Parts A & B, you can switch to Part C.
- If you have Medicare Part C, you can switch back to Original Medicare or change to a different Medicare Advantage Plan.
- If you have Part D, you can switch to a different Part D plan or drop your prescription drug plan.
You can also use this time to enroll in Part C and Part D for the first time.
When Can I Make These Changes?
Medicare open enrollment is from October 15th through December 7th each year. Making changes to your plan during this time provides the most flexibility and will affect your 2023 Medicare coverage.
Don’t get this confused with the Medicare Advantage open enrollment period that occurs from January 1st to March 31st, where those with Part C can change to a different Part C plan or switch to Parts A and B. Any other changes need to happen in the October-December enrollment period.
Overwhelmed? We Can Help.
We know that choosing the right Medicare plan can be a complicated and challenging process. But the plan you choose can either positively or negatively impact your wealth management strategy. Taking the time to shop around for the right plan will not only benefit your health and medical needs but your pocketbook as well, so it’s worth the effort.
The good news is, you don’t have to navigate this process alone. At Cobalt Private Wealth we’re here to walk you through the process and help you determine which plan will work best for you. Reach out to us at danielkorleski@cobaltprivatewealth.com or 719-332-3863 to schedule a meeting. We look forward to working with you!
About Dan
Daniel Korleski is the President & CEO of Cobalt Private Wealth, where he helps his clients grow, manage, and protect their wealth so they can work toward a stronger financial future. With over 30 years of experience in the financial services industry, Dan has served as the managing director for Investment Trust Company, chief investment officer for the Wealth Management Group at American National Bank in Denver, and regional investment manager for the Greater Colorado Region of the Private Bank at Wells Fargo, where he oversaw the management of over $2 billion. In 2008, he was appointed by the mayor of Colorado Springs to the City’s Investment Advisory Committee. Dan holds an MBA in investment management from Midwestern State University in Wichita Falls, Texas, a Bachelor of Science in Finance from Florida State University, and is a member of both the CFA Society Colorado and The Financial Planning Association.
Dan loves to give of his time to his community and has served as Chair of the Board of Trustees of Pikes Peak Hospice Foundation, the Board of Directors of Catholic Charities of Central Colorado, President of the Broadmoor Rotary Club and Vice President of the Board for the Pikes Peak Chapter of Trout Unlimited. Dan was born and raised in Spain and is fluent in Spanish. When he’s not working, you can find him traveling around the world with his wife of 25 years, Montse, fly fishing, golfing, and hiking with his golden retriever, Curro and rescue pup Brandy. To learn more about Dan, connect with him on LinkedIn.
