Get Ready for the Medicare Open Enrollment Deadline
Many people understand they can switch from their 2014 standalone Part D prescription drug plan to a new standalone plan for 2015. Medicare beneficiaries can also drop their Part D coverage altogether, although this is not a good move unless you are moving from traditional Medicare to a Medicare Advantage plan with a prescription drug feature.
Medicare beneficiaries can also do the following:
1. Change from traditional Medicare to a Medicare Advantage plan.
2. Go from a Medicare Advantage plan to traditional Medicare, although the choices may be limited when it comes to finding a Medicare Supplement plan.
3. Transfer from their current Medicare Advantage plan to a new Medicare Advantage plan for 2015.
4. Move from a Medicare Advantage plan without prescription drug coverage to a plan that offers prescription drug coverage. Note that the Medicare beneficiary can also move from a Medicare Advantage plan that offers prescription drug coverage to one that does not.
Important: Beneficiaries who have enrolled in a Medicare Advantage (MA) plan (offered by private insurance companies) with no prescription drug coverage are able to enroll in a standalone Part D prescription drug plan only if they participate in a PFFS (Private Fee For Service) type MA plan or in a MSA (Medical Savings Account) type MA plan.
Be very careful if a beneficiary is a participant in an HMO or PPO type MA plan; enrolling the beneficiary in a standalone Part D plan will result in their being dropped from their MA plan and returned to original Medicare. Not only will they inadvertently lose their preferred type of coverage, but if they are unable to purchase a Medigap plan, the change can result in paying higher out-of-pocket healthcare costs. In an HMO or PPO, the participant must receive his or her prescription drug coverage from the plan. A SNP (Special Needs Plan) must include a prescription drug plan.
If a Medicare beneficiary does not want to make a change, then there’s nothing to do! He or she should receive, however, a notice from their current provider an "Annual Notice of Change" that will tell the beneficiary what changes will occur to the plan in 2015.
By the way, don’t confuse the Medicare open enrollment with the Patient Protection and Affordable Care Act open enrollment that occurs Nov. 15, 2014 through Feb. 15, 2015.
Financing Retirement Healthcare
You know every aspect of your clients’ financial lives… that’s why you’re the best resource to help your clients solve the complex puzzle of retirement, investment, risk management, estate and tax planning. Year-end planning is a great time to start that discussion with your clients. Turn to the AICPA Personal Financial Planning Section for all the tools you need to begin that important conversation with confidence. Leading technical expertise, education and powerful resources are there to help you practice knowledgeably and profitably.
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James Sullivan, CPA/PFS, Core Capital Solutions, LLC. James has more than 25 years of experience in individual tax, investing and personal financial planning. His practice focuses primarily on seniors—those about to retire or those who have already retired. Prior to joining Core Capital Solutions, James spent 20 years at Arthur Andersen LLP.
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