4 Financial Planning Steps to Take Before Medicare Open Enrollment Starts in October

At this stage of the year, a lot of people are busy making summer plans, going to the beach, and enjoying the warmer weather. Medicare open enrollment may be the last thing on your mind, especially since it doesn't even kick off until Oct. 15.

The decisions you make about your Medicare coverage shouldn't happen on a whim. Healthcare might be one of your biggest retirement expenses, and without careful planning, it could increase over time. It's important to plan ahead, so you can make the most of Medicare open enrollment. Here's what to do now.

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1. Review your current healthcare spending

Before the time officially comes to review your Medicare plan options, it's smart to take a close look at how much you're spending on medical bills, copays, premiums, and other out-of-pocket healthcare expenses. That could help you determine whether your current plan is meeting your needs, or whether you should be prioritizing a new one once open enrollment arrives.

Also, pay attention to any specialist you see regularly, whether it's an ENT, a cardiologist, or a dermatologist. If you end up wanting a new Medicare plan, you may want to prioritize one that gives you access to your preferred doctors.

2. Evaluate your prescription drug needs

Prescription drug coverage can change from year to year. Formularies, which are the lists of drugs covered by Medicare prescription drug plans, can be updated annually. A medication that was covered this year may be placed in a different pricing tier next year. For this reason, it's important to keep your prescription list current.

You may also want to discuss future medication needs with your doctors. If you expect to start a new medication next year or drop one of your current prescriptions, that could have an influence on the plan you choose.

3. Figure out how much you're using your plan's benefits

If you have a Medicare Advantage plan, you may have access to a host of supplemental benefits beyond what original Medicare offers. Those benefits could be helpful in managing medical conditions you have. Plus, they could be a source of savings, helping you stretch your retirement income further.

It's important to make sure you're actually using the benefits your plan comes with. If not, there may be a more cost-effective plan to switch to. For example, if your Medicare plan gives you gym access but you've never set foot in one, you may not need to pay for that service.

4. Determine where you'll be spending your time in the new year

For some retirees, Medicare Advantage plans offer a host of savings. They can also offer peace of mind, because unlike original Medicare, they put a cap on annual out-of-pocket spending. When you're on a fixed income of savings and Social Security, that's important.

However, Medicare Advantage plans commonly limit enrollees to certain provider networks. If you expect to spend a lot of time outside your home state next year, a Medicare Advantage plan may not work well for you.

Let's say you live in Connecticut, but are planning to take the plunge in 2027 and buy a beach condo in Florida to escape the cold winters. While that arrangement might make you happier in retirement, it could also make it difficult to access medical care outside your home base. That's something to plan for carefully.

Even though Medicare open enrollment doesn't begin for about four more months, it's important to plan ahead so you're able to search for coverage with more confidence. By taking the steps above in the coming weeks, you can approach open enrollment in the fall with a clearer understanding of your options and a stronger healthcare strategy for the year ahead.

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