Retirees: Make the Most of the Small 2020 Social Security Increase

In late October we will get the official announcement on the size of the inflation adjustment that will be made to Social Security retirement benefits in 2020. The increase is likely to be 1.6 percent.

Any increase is helpful, but I know that for many of you, your living expenses may be increasing more than that.

One way to stretch your dollars is to take the time to carefully review your current health insurance coverage. And right now is when you can make changes to your coverage for 2020. Medicare “open enrollment” runs from October 15^th through December 7^th. This is when you can switch coverage.

I know it’s easier to just stick with what you have. But if you have Original Medicare and a supplemental policy that covers your prescription drug costs –called Medicare Part D – you really should shop around for the best 2020 drug plan.

At a minimum you want to check if there is any price increase for the drugs you use. Medicare Part D plans have coverage tiers; many drugs are low cost, but many are in higher tiers where your out-of-pocket can be hundreds of dollars. Each year plans can move drugs into a different tier. So you need to check if your drug moved from a low (inexpensive) tier to a higher tier for 2020. 

And keep in mind that different plans offered in your area may have wildly different out-of-pocket costs for the medications you use. It makes no sense, but it’s up to you to find the lowest cost plan for your needs.

Studies show that very few retirees with Medicare Part D bother to shop around for the most cost-effective plan, potentially spending thousands of dollars more each year.

The newly revamped Medicare Plan Finder website aims to make it easier than ever to plug in your current prescription drugs and get a personalized list of the plans in your area and your expected costs. If you have an elderly parent –or grandparent!—offer to do this online review with them.

During the open enrollment period you can also choose a different Medicare Advantage Plan. If you have Original Medicare and a supplemental plan (Medigap) you can also shop for a different Medigap policy. Just be sure to check the rules for switching Medigap policies; a pre-existing condition may prevent you from moving to a different Medigap policy.