Open enrollment is on employees’ radars during this time of year. Once retired and on Medicare, is this still a topic of discussion? Absolutely. And here’s why.
Every fall, as true as the leaves dropping from trees, employers send “open enrollment” notifications to their employees for medical and other benefits. This gives employees a chance to review their current benefits and decide if changes should be made. These changes could be updates for a growing family, or young-adult children who leave the nest to start a life and career of their own. Some employees may be on autopilot and often don’t review the next year’s plans and costs.
Open enrollment for retirees may be more complex. Here are some topics to help retired clients make sense of Medicare open enrollment.
Medicare open enrollment is from October 15 to December 7 each year. For most retirees during the early stages of retirement, it may be business as usual. Some are happy with the Medicare option they have elected, and their retirement plans are working as intended. But those retirees with increasing healthcare costs, or at the later stages of retirement might want to consider the following:
If the client is in the Go-Go stages of retirement, he or she likely will be traveling. This could be visiting kids and grandkids or enjoying visiting places on a bucket list. The retiree may be happy with original Medicare because it allows access to healthcare anywhere while traveling in the United States and its commonwealths and territories. Costs may not be a concern right now.
A retiree’s health may be declining, and prescription drug costs are increasing year after year. In 2021, the cost for Medicare Part D is between $12 and $77 on top of the premium paid for Part B. Even then, it may not cover all prescription drugs. The retiree may want to entertain Medicare Advantage as an option because it bundles the services via a managed-care program, usually for a lower payment, but there are things to consider.
There are many tools online for planning purposes for a retiree. If a client is considering making a change due to lifestyle changes or events, a cost-effective strategy is important. There are a few resources listed below that can help with comparisons.
Clients have worked hard and planned for a comfortable retirement. And even though retirees’ overall expenses may go down in retirement, studies show that spending for healthcare increases in retirement. By helping them look at the full Medicare picture, they can make the choices that make the most sense for them during open enrollment, which will allow them to enjoy watching the leaves fall with the certainty that healthcare considerations have been fully thought out.
For more information on retirement-planning strategies, please contact the Retirement Strategies Group at (800) 722-2333, or email us at RSG@PacificLife.com.
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