Your health directly impacts your financial vitality, especially as you age. Dealing with health issues is not only complicated and potentially distressing but also can result in serious financial implications. While we never know what our future holds, there are ways to be strategic and optimally position yourself when choosing the right Medicare coverage.
If you are currently covered by Medicare, the fall is an important time to assess your well-being as open enrollment begins on October 15 and runs through December 71. Open enrollment is the time to make changes to your coverage that will go into effect on January 1, 2024. Here are a few things to consider for your health, as well as your financial security, as you prepare for open enrollment.
Planning for Medicare 2024 Open Enrollment
Again, open enrollment for those currently covered by Medicare begins on October 15. There are four key parts to Medicare (Parts A, B, C, and D) and we summarized what they entail in a blog post here.
One of the primary goals of open enrollment each year is to allow Medicare participants to ensure they remain on or move to the best Medicare plan for them. This can be a confusing process, and a conversation with your insurance company or checking out the resources at Medicare.gov can help you make sure you have examined all the perspectives. While you will automatically remain on your current Medicare plan if you don’t make changes during open enrollment2, making sure you have the right plan can save you time, money, and frustration for the year to come.
Assess Any Changes to Your Health or Finances
Since Medicare coverage is income-based, you should work with a financial professional to make sure you understand what will be viewed as income, and how you can position yourself so that you don’t have to overpay for Medicare coverage. Premiums are also based on other factors, such as collecting Social Security, so making sure you are in the optimal position will save you as much money as possible.
You should also assess whether your health has changed over the past year, or if you anticipate any changes could occur in 2024. Some examples include medical equipment needs, such as new hearing aids, or changes to your prescription medications. In some cases, you may have underutilized your Medicare coverage and can decide if you want to move to a lower plan. Different Medicare plans fit better than others, and it’s important to make sure you are covered by the one that is best for your current or future circumstances.
Also, keep in mind the areas that Medicare does not cover, and whether you’ve had changes in those areas, such as dental work, eye exams, or overseas care for upcoming travel plans. There are supplemental policies, called Medigap3, available that can help cover the areas that Medicare does not.
Plan for Long-Term Care
One of the costliest areas that Medicare does not cover is long-term care, which includes rehabilitative care, in-home health care, and assisted living facilities. In 2021, the annual median cost of nursing home facility care in New Jersey was over $145,0004. Currently, Medicare will only cover a maximum of 100 days of nursing home care (provided certain conditions are met)5. It is estimated that 70% of people over 65 will need long-term care at some point in their lives6, and for most, 100 days will not be sufficient. Fortunately, there are insurance policies available to make sure you are covered so that you and your loved ones can have peace of mind. The transition to long-term care is difficult enough without also worrying about how you or your family will afford it.
Long-term care policies come in several options, such as traditional, hybrid, or life insurance with a rider for long-term care. Keep in mind, many variables will impact the cost of those policies, such as opting for a longer elimination period. At Scafa Financial Services, LLC, we regularly review these selections with clients to find the right balance between sufficient long-term care coverage and cost. Feel free to reach out to our team if you have any questions or concerns about your long-term care plan.
2. UnitedHealthcare (uhc.com)
4. Genworth Financial, Inc.
6. U.S. Department of Health and Human Services, 2019