What You Need to Know About “Medicare Part D”

A couple, both age 65, retiring today will spend, according to Fidelity Investments’ 2013 survey, approximately $220,000 on health care during their retirement years – and that doesn’t include any assisted living or nursing care.  While this year’s figure represents an 8 percent decrease from last year’s estimate of $240,000, making the most of your health expense resources during retirement can make a significant difference in how long your retirement savings will last.

The annual open enrollment period for 2014 Medicare Part D begins Oct. 15 and will extend until Dec. 7.  The open enrollment period changed in 2011 to move the deadline away from the holidays to allow for more time to make decisions.

During the enrollment period, Medicare recipients can add, drop or change their prescription drug coverage (Part D).  According to Medicare Today, anyone eligible for Medicare Part A (whether actually enrolled or not), or who is currently enrolled in Medicare Part B, may join Medicare Part D for help paying prescription drug costs. Your eligibility is not dependent on your income, health status or current prescription expenses.  Although enrollment in Medicare Part D is voluntary, if a beneficiary does not sign up when first eligible and decides to enroll later, a penalty fee may apply.

Medicare Part D participants can choose between joining a Medicare prescription drug plan (PDP) through a Medicare-approved private company or joining a Medicare Health Plan, such as Medicare Advantage, that includes prescription drug coverage.  If you are already enrolled in Part D, you can switch your plan during the enrollment period.  For those using a PDP, changing plans has no impact on the doctors you see. With a Health Plan, however, you may be limited to the doctors within the particular plan’s group.  That hurdle often discourages participants from changing plans, but if premium costs are a concern, participants would do well to investigate their options.

The Medicare Plan Finder can help you determine if you would benefit from switching plans.  You will find this tool and many others at Medicare.gov.  If you have questions or need additional help in determining how health care costs may impact your retirement, please call our office.  We’re here to help!
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Karen helps attorneys; mediators, individuals and couples, navigate through the financial morass of divorce and widowhood. Her expertise lies in understanding the special tax and financial issues that can plague divorce and she helps clients get their financial fair share and equitable settlements. She provides financial analysis, projections and solutions so clients can avoid long-term regret over decisions made early on in divorce and widowhood.  Karen offers a range of financial, investment and insurance services that address clients’ complete financial picture and long-term needs before, during and after marriage.  She is currently writing a book entitled, “To Have and To Hold Onto Your Financial Fair Share: Financial Decision Making When Marriage Ends in Divorce or Death.”