Retirees rely on their Social Security benefits. However, another program they have to worry about is Medicare, which some might argue has even more complexities than Social Security.

Medicare is the federal health program for people in the U.S. over 65 and has several different parts. Retirees typically don’t enroll in all parts of Medicare and have some optionality when choosing. Retirees can change plans, too, so you are not locked in for life.

Similar to Social Security, there are some key dates retirees need to keep in mind. For instance, the initial enrollment period for Medicare begins three months before your 65th birthday and extends until three months after. Now, another key date is approaching on Dec. 7.

Several different enrollment periods

One confusing part of Medicare is that there are several different enrollment periods. The one I mentioned is important because retirees can incur lifelong penalties if they miss initial enrollment unless they are still working and have insurance through an employer. However, there are other key enrollment periods:

• Oct. 15 to Dec. 7: This is the annual enrollment period, which is a good time to evaluate your current Medicare or Medicare Advantage plans and make changes.
• Jan. 1 to March 31: This is the general enrollment period when retirees can sign up for Medicare Parts A and B if they didn’t sign up when first eligible or if they aren’t eligible for a special enrollment period. Despite its name, most retirees shouldn’t use this period, because penalties can apply for missing both your initial enrollment period and any special enrollment period that you might qualify for.
• Jan. 1 to March 31: This same dates cover the open enrollment period for Medicare Advantage, also known as Part C. These plans come from private companies outside the federal government that the federal government has approved. Many of these plans combine types of coverage that you’d find in Medicare Parts A, B, and D. Despite the name “open enrollment,” retirees who aren’t already enrolled in Medicare Advantage cannot join the program during this time. They can switch plans or opt back into traditional Medicare coverage if they are already enrolled in Medicare Advantage.

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Annual enrollment

All Medicare retirees should evaluate and make any necessary changes to their Medicare plans by Dec. 7, which is when the open enrollment period concludes. There are several things retirees can do before annual enrollment ends:

• Change from traditional Medicare to Medicare Advantage.
• Change from Medicare Advantage to traditional Medicare.
• Change Medicare Advantage plans.
• Change from a Medicare Advantage plan that also covers prescription drugs (Part D) to one without, or vice versa.
• Enroll in, change, or end a prescription drug plan.

Medicare plans can change every year and are influenced by many factors, including legislation, how Medicare Advantage performs, changes made by the Centers for Medicare & Medicaid Services (CMS), changing demographics of Medicare enrollees, the overall healthcare market, and more. Another thing that may have changed is you. Your health needs might be different than they were a year ago, making your current plan less effective than it once was.

A retiree’s Medicare Part D plan can also change the drugs it covers and the cost of those drugs, for better or worse. Passed with the Inflation Reduction Act, the government obtained the ability to negotiate drug prices with major pharmaceutical companies. The first negotiated new prices are expected to go into effect in 2026 and save retirees billions in out-of-pocket drug costs and improve access to certain drugs for Part D enrollees, so you’ll definitely want to look at your plan and others that are available carefully during the annual enrollment period next year.

When evaluating Medicare plans, retirees should examine their health needs, how much they use and pay for prescription drugs, and what they might have to cover out of pocket. Then look at premiums, co-pays, and maximum out-of-pocket costs in available plans to choose the best one for your needs, at the best price possible.

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