Nov 01, 2021
By Cathy Johnson, CPA, CGMA Chief Administrative Officer and CFO at Terry Lockridge & Dunn/World Trend Financial
Medicare’s open enrollment period is October 15 - December 7, for coverage that is effective January 1st. Medicare health and drug plans can make changes each year—things like cost, coverage, and which providers and pharmacies are in their networks. October 15 to December 7 is when all people with Medicare can change their Medicare health plans and prescription drug coverage for the following year to better meet their needs.
Medicare Part B premiums for 2022 should be announced in early November. The 2021 rate is $148.50 for the standard monthly premium. If your modified adjusted gross income is above a certain amount, you may pay an Income Related Monthly Adjustment Amount (IRMAA). Medicare uses the modified adjusted gross income reported on your Federal 1040 from two years ago. IRMAA is an extra charge added to your premium.
Here is a checklist to help get organized:
- Put together a detailed list of all medications. Be specific with the exact spelling and dosage shown on the prescription container. Take a picture of prescription bottles if you will be meeting with a caregiver to do this review.
- Make a thorough list of all health care providers, including name, contact person and phone number. Be sure to include physical therapists, medical equipment suppliers, laboratories, pharmacies, etc.
- Read the new plan benefit summary and the Annual Notice of Change from your current plan. If your plans are changing, make sure their plans will still meet your needs for the following year. Look at more than the premium. Determine if there are changes in co-payments, co-insurance, deductibles, and other plan features. Will your medications continue to be covered, or not? Ask your health care providers if they plan to continue participating in your plan.
If you are married, consider if you should each have different plans. Oftentimes, the medical needs of each spouse are different, so assuming one plan is good for both can be costly.
Go to www.medicare.gov or call 1-800-MEDICARE to find Medicare plan information and compare plans. If you are satisfied that your current plans will meet your needs for next year, and it is still being offered, you do not need to do anything. Please take the time now to get organized and perform a Medicare checkup before the deadline passes.
As you are doing your 2021 tax planning, do not forget about IRMAA if you are on (or will be in 2023) Medicare or a Medicare Advantage plan. Accelerating/reducing income in 2021 could impact your Medicare Part B premiums in 2023.
The accountants at Terry Lockridge & Dunn are available to review your specific circumstances. Please reach out to them at 319-364-2945 in Cedar Rapids, or 319-339-4884 in Iowa City. We can set up a Zoom meeting, a conference call, or an in-person meeting at either location.