Medicare Open Enrollment is Here: Five Things Advisors Need to Know

In this blog, we’ll go over five critical points financial advisors need to know as we approach the Medicare Open Enrollment season. Knowing these key points will:

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• - Help you and your clients optimize their Medicare coverage and costs.

• - Create a smoother enrollment process.

• - Protect your clients' retirement and financial plans from avoidable financial risk.

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Bonus content: Check out our Open Enrollment Guide for a deep dive into all things Open Enrollment!

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1. The timeline for Open Enrollment is a critical window of opportunity

From October 15th to December 7th each year, Medicare beneficiaries can make changes to their existing Medicare coverage. During Open Enrollment, your clients on Medicare can:

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• - Join, drop, or switch to another Medicare Advantage Plan (or add or drop drug coverage).

• - Switch from Original Medicare to a Medicare Advantage Plan or from a Medicare Advantage Plan to Original Medicare*.

• - Join a Medicare drug plan if you're on Original Medicare.

• - Switch from one Medicare drug plan to another for those on Original Medicare.

*Important note: Medigap is a critical component of Original Medicare, but switching from a Medicare Advantage plan to a Medigap plan typically requires underwriting.

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Open Enrollment is the only time of the year (outside of Special Enrollment Periods and the Medicare Advantage Open Enrollment Period) when Medicare beneficiaries can make changes to their Medicare coverage, so it’s imperative not to miss this planning opportunity. You don’t adopt a “set it and forget it” mentality for retirement and financial plans; you regularly revisit the plans and make modifications as necessary. The same goes for Medicare coverage. Financial advisors should review their clients’ Medicare coverage at least once a year during Open Enrollment to ensure their clients are on the optimal coverage for their health needs, financial goals, and preferences.

2. Income plays a big role in Medicare

The income-related monthly adjustment amount (IRMAA) is based on: 

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• - Your client’s tax filing status. 

• - The current year’s adjustment amount. 

• - Your client’s modified adjusted gross income from two years prior. 

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For 2025, the standard base monthly premium for Part B is $185. For Part D, you will pay the chosen plan’s premium, plus a potential income adjustment of up to $85.80. To calculate your client’s 2025 IRMAA, which is added to these base premiums, the Social Security Administration (SSA) will look at their tax return from 2023. Their Medicare premiums and IRMAA determination are sent to them every year in the fall. Below is a table of expected total costs, which include both the base amount and IRMAA charge:

3. Not all Medicare Advantage plans are created equally

Medicare Advantage is a single, all-in-one plan from a single private insurance company that combines Parts A & B, and oftentimes Part D, with the insurance carrier administering Medicare benefits on the beneficiary’s behalf. Insurance companies are paid a fixed amount annually for each person enrolled in their plans. In exchange, Medicare requires the plan to provide specific benefit protections and quality service. 

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Much like employer-sponsored health plans have different coverage and cost options, so do Medicare Advantage plans. Even within the same state, the costs and services can vary greatly from one plan to the next. This is because of extra services covered (like dental and vision), networks, contracts, drug formularies, and other factors that impact how health plans set their costs. 

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This is why it’s imperative for financial advisors to offer healthcare planning to clients, so they can ensure clients choose the right plan for all their needs, and that the plan’s costs don’t negatively impact the financial plan you’ve worked so hard on. 

For example, if your client chooses a Medicare Advantage plan simply because it has a $0 monthly premium, but didn’t check if their doctors are in-network with the plan, they’ll potentially be on the hook for significantly more out-of-pocket costs for the next year.

4. Medicare coverage doesn’t apply to dependents or spouses who are under 65

This tip applies more so to Initial Enrollment Periods (“IEPs”), but it’s still important to call out in case you have clients turning 65 during the Open Enrollment period. 

Unlike employer-sponsored health insurance or ACA (Marketplace) health insurance, Medicare coverage is only for individuals. Even if a married couple is the same age and Medicare-eligible, they have to enroll in Medicare coverage separately. If you have clients who are enrolling in Medicare soon with a spouse under 65 or a child they were covering through their employer plan, you’ll want to work with them to find alternative coverage options. Employer-sponsored healthcare coverage, ACA (Marketplace) coverage, and COBRA are all potential options depending on each client’s situation. 

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5. Supplemental coverage, like Medigap and employer-sponsored retiree health benefits, needs to be factored into Medicare coverage decisions

Many Medicare beneficiaries have some form of supplemental coverage, such as a Medigap plan. Retiree health benefits from an employer or union are another form of supplemental coverage. This additional coverage helps to offset some of the out-of-pocket costs associated with Medicare. Although enrollment in these plans and benefits is not tied to Medicare’s Open Enrollment period, your client's costs are affected by these plan options, and therefore, they might want to shop around for other options during the Open Enrollment period. For example, many unions offer retiree benefits, but these retiree benefits are often just Medicare Advantage plans. Perhaps your clients enrolled when they first retired, but the plan no longer suits their needs. Often, these plans are a “use it or lose it” situation, so clients feel pressured to initially enroll, but they can always make changes during the Open Enrollment period, regardless of how long they’ve been on their retiree benefits plan.

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Moving Forward

Although these five key pieces of information will make it a lot easier to prepare for and enroll in a Medicare coverage option, there are additional factors to consider that will make the Open Enrollment process even smoother. We suggest using the information in this blog as a way for you and your clients to quickly and easily identify which Medicare configuration (Medicare Supplemental or Medicare Advantage) will work best for them. 

And if you truly want to make comprehensive healthcare planning a seamless experience for clients (and yourself!), schedule a call with our team to learn how Move Health’s healthcare planning software and team of licensed agents support financial goals, make Open Enrollment a breeze, and help you be the ultimate comprehensive financial advisor without adding any additional work to your plate.