Reader Question:

“Hello, I’m 68, retired, and I keep seeing reminders about open enrollment. Since I’m already on Medicare, do I need to do anything during open enrollment, or is that mainly for people with employer health plans?”

Answer:

Great question! This is one we hear often this time of year. While “open enrollment” is strongly associated with employer benefits, it’s just as important once you are retired and on Medicare.

Here’s what retirees should know:

Medicare’s own open enrollment window is a great opportunity to change your current coverage. Medicare’s Annual Enrollment Period runs  Oct. 15-Dec. 7 each year, and it’s your opportunity to review and change your coverage for the following year. This is the window to switch between Original Medicare and Medicare Advantage, change Medicare Advantage plans, or switch your Part D prescription drug plan.

Plans change every year, and premiums, covered drugs, networks and out-of-pocket maximums can all shift. Even if you are happy with your current plan, it’s worth doing your homework.  A Part D plan that covered your medications affordably last year might restructure its formulary or raise copays for the coming year. We recommend that every retired client review their Explanation of Benefits and Plan Summary each fall, even if they don’t plan to change plans. A “set it and forget it” approach can quietly cost you hundreds, or even thousands, of dollars over a year.

For those individuals  who are still working past age 65 and covered by a qualifying employer plan, you may have deferred Medicare enrollment. However, once that employment or coverage ends, you have a limited Special Enrollment Period. Missing this window can trigger permanent penalties on Part B and Part D, which is a timing issue we build directly into retirement conversations.

If you carry a Medigap (Medicare Supplement) policy, those aren’t technically tied to the same October–December window, but it’s still a smart time to review pricing and coverage alongside everything else, especially since Medigap underwriting rules can make switching later more difficult or expensive.

One item that is often missed about Medicare is IRMAA. Your Medicare Part B and Part D premiums are income-adjusted based on your tax return two years prior through what’s called the Income-Related Monthly Adjustment Amount (IRMAA). This means a large one-time income event such as a Roth conversion, a big capital gain, or an RMD surge can temporarily push your Medicare premiums significantly higher two years later. This is exactly the kind of multi-year tax and income planning we do with clients, so decisions made today don’t create surprises down the road.

Open enrollment isn’t just an employer-benefits exercise for retirees. It’s a once-a-year checkpoint worth taking seriously. A 20-minute review each fall can meaningfully affect your  health care costs, and, when layered with income and tax planning, it can protect you from costly surprises like IRMAA surcharges.

If you’d like help reviewing your Medicare options or understanding how a planned withdrawal might affect your premiums, that’s exactly the kind of conversation we’re happy to have.

If you would like to have your question answered in a future edition of Lebo Beat, please email it to Pittsburgh@carsonwealth.com.

John McGowan, CFA, MBA, of Carson Wealth will answer select reader-submitted questions and offer professional insights on investing, retirement planning, estate planning, taxes and other personal finance topics.

Have a financial question you’d like addressed in a future column? Email your question to Pittsburgh@carsonwealth.com. Selected questions may be featured in an upcoming edition.