Although many think of Medicare as a one-and-done decision, smart financial advisors know that their clients can save potentially thousands of dollars by helping them review their coverage during the Open Enrollment Period (OEP) from October 15 – December 7. Optimizing one’s Medicare coverage is confusing for many clients, but if a persons’ financial or health situation has changed, it’s especially critical that they review their coverage during Open Enrollment.
The OEP is the time each year when seniors can reevaluate and change their Medicare Part D prescription or Medicare Advantage Plans, or switch from Original Medicare (with or without a Medigap policy) to a Medicare Advantage Plan. *BEWARE – In most states, even during the OEP, your ability to get a Medigap (also known as a Medicare Supplement) policy will be based upon your health. This does not change during the OEP.
More than two-thirds of those enrolled in Medicare do not check to see if there’s a more cost-effective or suitable plan during the OEP, according to a 2021 study by the Kaiser Family Foundation. Financial advisors can play a critically important role in keeping client optimize their healthcare costs by prompting and guiding them through the OEP.
“Why would I bother reviewing my plan when it worked great for me this year?”
Regardless of how a client feels about their present Medicare coverage, it is critical they review their coverage during the OEP. A plan that worked well for a client this year be entirely different coverage next year. By law, plans are allowed to change the provider networks, pharmacy networks, medications they cover and do not cover, requirements for prior authorization or step therapy, out-of-pocket costs for services and medications, and more. Essentially, everything about a plan could change next year — all while maintaining the same plan name.
“How important is it really for me review my coverage?”
Some clients need to review their coverage more than others. If a client can answer yes to any of the following, it is especially important for them to reevaluate their Medicare coverage during the OEP:
• Has it been more than two years since they last reviewed their Medicare Part D or Advantage plan?
• Has their health changed since they last reviewed Medicare plans?
• Do they take any brand name medications? Or, do they take five or more medications?
Advisors can start by engaging clients who have not reviewed or updated their Medicare Part D or Medicare Advantage plans in the last two years. Since Part D & Medicare Advantage plans change every year—and these changes can be costly—these clients should be top of mind during the OEP. By keeping the same plan for more than a couple of years, clients are likely overpaying on certain costs such as out-of-pocket copays, premiums and deductibles.
For clients whose health situation have changed or those who are managing any brand name medications or many generic medications, the OEP can help them save on prescription drug costs. Evaluating the network pharmacies and providers, as well as prescription costs are especially important for these clients. People do not realize that simply changing pharmacies could save them hundreds of dollars a year.
The OEP also provides a perfect opportunity for advisors to grow their business. Retirees want advice on how to navigate and manage Medicare, but few of these people have a trusted resource or a retirement plan that addresses anticipated healthcare needs. Advisors should not squander the opportunity to set themselves apart from the thousands of financial advisors who are ill-equip at guiding their clients through the Medicare process.