Connect with us

Personal Finance

Medicare open enrollment lets retirees shop for new health-care coverage

Published

on

Morsa Images | Digitalvision | Getty Images

Medicare open enrollment for 2025 is set to begin on Tuesday.

Beneficiaries have from Oct. 15 until Dec. 7 to evaluate their Medicare coverage options and select new plans for next year.

Experts say it’s an important opportunity retirees should not ignore.

However, just 30% of people on Medicare review their options every year, according to research from KFF, a provider of health policy research.

“Every year, it makes sense to compare coverage options, because people’s needs change from one year to the next, and also plans make changes,” said Tricia Neuman, executive director for the program on Medicare policy at KFF.

“Doing these comparisons can make a big difference in terms of coverage and costs,” she said.

The new year will usher in new changes to Medicare, which means beneficiaries may want to do some careful research during this open enrollment season.

“My best advice would be to start early,” said Ryan Ramsey, associate director of health coverage and benefits at the National Council on Aging.

Changes you can make during open enrollment

During Medicare open enrollment, retirees may select new health plans and prescription drug plans.

They may switch from original Medicare, which is provided by the federal government, to Medicare Advantage plans that are privately managed. They may also switch from Medicare Advantage to Medicare original or change Medicare Advantage plans.

Original Medicare includes Medicare Parts A and B. Medicare Part A covers care provided by hospitals, skilled nursing facilities and hospice, as well as some home health care. Medicare Part B covers doctors’ services, outpatient care, medical supplies and preventive services.

Beneficiaries on original Medicare may choose to add prescription drug coverage by signing up for a Medicare Part D plan, or additional coverage for out-of-pocket costs through Medicare supplement insurance, or Medigap.

Alternatively, beneficiaries may choose a private Medicare Advantage Plan, which provides Medicare Parts A and B, and may also include vision, dental, hearing and prescription drug coverage.

Changes for 2025 that may affect coverage

In 2025, a $2,000 cap on out-of-pocket Medicare Part D costs will go into effect.

The change, which was part of the Inflation Reduction Act of 2022, is “great news” for retirees who have expensive prescription drugs they need to take, said Philip Moeller, author of “Get What’s Yours for Medicare: Maximize Your Coverage, Minimize Your Costs.”

However, insurance companies may try to pass on the higher Medicare Part D and other prescription coverage costs they now face because of those changes, Moeller explained. That may come in the form of higher prescription co-pays, more expensive coverage tiers for certain drugs or dropping coverage of some drugs entirely.

“This means that consumers should be really vigilant in open enrollment,” Moeller said.

Notably, the Biden-Harris administration has moved to protect beneficiaries from large increases by capping the allowable increase in Part D premiums at $35 per month in 2025, KFF’s Neuman said.

Retirees also should be on the lookout for changing Medicare Advantage coverage, Moeller said.

In some cases, private insurers may have cut out plans or moved out of geographic areas that are no longer attractive to their businesses. While retirees may be inclined to seek Medicare Advantage plans for their prescription drug coverage, they should be aware of possible changes those plans could be making that affect the total costs they will pay, Moeller explained.

Individuals who have Medicare Advantage and who want to switch to original Medicare should be aware they may not be able to purchase a Medigap policy if they have a pre-existing condition, Neuman said.

Notably, four states have protections to prevent that — Connecticut, Maine and Massachusetts and New York.

“In other states, it may be more difficult for people to disenroll from a Medicare Advantage plan and find a Medigap policy if they have a serious medical condition or even asthma, diabetes and other conditions,” Neuman said.

How to best shop around

Experts say thorough research is the best way for retirees to gauge the costs they may face on their current plans or by switching coverage.

Individuals can use Medicare.gov to compare plans or contact Medicare by phone at 1-800-MEDICARE.

State Health Insurance Assistance Program, or SHIP, programs are also available in every state and offer free in-depth, non-biased counseling, according to Ramsey.  

Start now, if possible, Ramsey said.

That extra time will allow you to gather your Medicare.gov login, lists of prescription drugs and have plenty of time to review plan comparison information and ask follow-up questions, he said.

Importantly, any coverage changes do not need to be rushed, Moeller said, and you should take ample time to consider your coverage options.

“There’s no reason to rush to judgment,” Moeller said. “Even if you wait until December 7 to elect coverage for 2025 it will take effect the first of January next year.”

Continue Reading

Personal Finance

Disability advocates sue Social Security and DOGE to stop service cuts

Published

on

A Social Security Administration (SSA) office in Washington, DC, March 26, 2025. 

Saul Loeb | Afp | Getty Images

A group of disability advocates filed a federal lawsuit against the Social Security Administration and the so-called Department of Government Efficiency on Wednesday aimed at stopping cuts to the agency’s services.

Recent changes at the Social Security Administration under DOGE — including staff reductions, the elimination of certain offices and new requirements to seek in-person services — have made it more difficult for individuals with disabilities and older adults to access benefits, the lawsuit argues.

The complaint was filed in the U.S. District Court for the District of Columbia.

The plaintiffs include the National Federation of the Blind, the American Association of People with Disabilities, Deaf Equality, the National Committee to Preserve Social Security and Medicare, the Massachusetts Senior Action Council and individual beneficiaries.

“The defendants’ actions are an unprecedented and unconstitutional assault on Social Security benefits, concealed beneath the hollow pretense of bureaucratic ‘reform,'” the complaint states.

In nine weeks, the new administration has “upended” the agency with “sweeping and destabilizing policy changes,” the plaintiffs claim, that have shifted agency functions to local offices while slashing telephone services.

More from Personal Finance:
Trump administration loses appeal of DOGE Social Security restraining order
Social Security changes may impact service, benefit payments
Trump pick to lead Social Security faces questions on DOGE

“The result is a systematic dismantling of SSA’s core functions, leaving millions of beneficiaries without the essential benefits they are legally entitled to,” the lawsuit complaint states.

The “mass restructuring” of the agency is unlawful and violates the Rehabilitation Act and the Administrative Procedure Act, the lawsuit argues. The changes also violate multiple constitutional provisions, including the First Amendment right to petition the government for redress of grievances, according to the plaintiffs.

With 1.1 million disability claims pending, the recent actions could also be life threatening to individuals who are dying or going bankrupt while waiting for decisions, they allege.

The Social Security Administration did not respond to CNBC’s request for comment.

“President Trump has made it clear he is committed to making the federal government more efficient,” White House spokesperson Liz Huston said in an email statement. “He has the authority to manage agency restructuring and workforce reductions, and the administration’s actions are fully compliant with the law.”

Lawsuit alleges reform is ‘administrative vandalism’

People hold signs during a protest against cuts made by U.S. President Donald Trump’s administration to the Social Security Administration, in White Plains, New York, U.S., March 22, 2025. 

Nathan Layne | Reuters

The Social Security Administration sends monthly checks to around 73 million Social Security and Supplemental Security Income beneficiaries.

DOGE, which is not an official government entity, has been tasked with cutting “waste, fraud and abuse” within the federal government. President Donald Trump issued an executive order creating DOGE on Jan. 20, the same day he was inaugurated.

Since then, the Social Security Administration has cut 7,000 employee positions and closed the Office of Civil Rights and Equal Opportunity and the Office of Transformation. The Office of Civil Rights and Equal Opportunity handled the agency’s equal employment opportunity and civil rights programs. The Office of Transformation was responsible for coordinating customer service-related initiatives like adding the ability to use digital signatures and electronic documents.

The Social Security Administration has also changed its identity proofing policies for claiming benefits and changing direct deposit information that is expected to require more individuals to visit the agency’s offices in person.

The agency has updated its policy, allowing individuals applying for Social Security Disability Insurance, Medicare, or Supplemental Security Income who cannot use a personal my Social Security account to complete their claim entirely over the telephone, starting April 14. 

The reforms amount to the dismantling of “core functions of SSA, abandoning millions of Americans to poverty and indignity,” according to the plaintiffs’ complaint.

“What the defendants frame as ‘reform’ is, in truth, administrative vandalism,” the lawsuit states.

Beneficiaries face long waits, overpayment issues

The plaintiffs include seven individuals whose experiences, including long customer service waits and, in some cases, demands to repay large sums to the Social Security Administration, are detailed in the complaint.

One plaintiff, Treva Olivero, who has been legally blind since birth, was informed in March 2024 that she had been overpaid Social Security disability insurance benefits for five or six years, prompting the agency to demand she repay more than $100,000, according to the complaint.

Olivero’s Medicaid coverage was also terminated soon after, which left her without income and health coverage. She has since been in an “ongoing struggle” to have her disability benefits reinstated, while also facing almost $80,000 in medical debt, according to the complaint.

Fiserv CEO on the nomination to Social Security Commisioner role

Another plaintiff, Merry Schoch, who received Social Security disability insurance for many years, returned to work to help pay for large medical bills after she was hit by a waste management truck in 2022. She reported her income to the Social Security Administration, and the agency made no changes to her benefit payments, according to the complaint.

Two years later, Schoch stopped working and reported her unemployment to the Social Security Administration. In August 2024, the agency then terminated her benefits and informed Schoch that she owed $30,000 for the disability benefit payments she received while working full time, according to the complaint.

Last September, Schoch was informed she could reapply for benefits. However, she has since struggled to get in touch with the agency over the phone, online and in person. 

Both Olivero and Schoch are members of the National Federation of the Blind, which is also a plaintiff.

The plaintiffs want the court to reverse the Social Security Administration’s recent reforms, including staff reductions, closures of certain offices and policies requiring in-person appointments.

Continue Reading

Personal Finance

Amid trade turmoil, ‘you do not want to time the market’

Published

on

Pres. Trump unveils sweeping tariffs: Here's what to know

As President Donald Trump rolls out sweeping new tariffs on goods imported into the United States, Americans are growing increasingly pessimistic about their financial fate.

Consumers worry that the duties will cause inflation to flare up again, while investors fear that higher prices will mean lower profits and more pain for the battered stock market

As of Thursday morning, futures tied to the Dow Jones Industrial Average were down 1,200 points, or 2.8%. S&P 500 futures sank 3.4%, and Nasdaq-100 futures lost 4%.

But sharp drops — or sudden spikes — in the market are to be expected, according to Jean Chatzky, CEO of HerMoney.com and host of the podcast HerMoney with Jean Chatzky.

“With these volatile markets, you do not want to time the market,” she said of the old adage. “Timing the market doesn’t work — it’s time in the market.”

More from Personal Finance:
Tariffs are ‘lose-lose’ for U.S. jobs and industry
Why uncertainty makes the stock market go haywire
Americans are suffering from ‘sticker shock’ — how to adjust

Trade tensions, inflation and concerns about a possible recession have undermined consumer confidence across the board, several studies show.

Still, it’s normal for most Americans to feel unnerved during heightened volatility, Chatzky said.

“There’s very little doubt that consumers are feeling nervous, maybe more nervous than we’ve felt in quite some time,” she said.

Committing to setting money aside in a high-yield savings account, whether by scaling back on dining out or rideshare expenses, will help regain some financial control, Chatzky said.

Top-yielding online savings accounts currently pay 4.4%, on average, well beyond the savings account rates at some of the largest retail banks, which average just 0.41%.

“Taking action is the best way to feel more resilient,” she said.

It’s understandable why some may be hesitant to continue investing, however, when you are investing for the long term, a down market is an opportunity for dollar-cost averaging, which helps smooth out price fluctuations in the market, Chatzky said.

This is also a good time to check your investments to make sure you are still allocated properly and rebalance as needed, so you are not taking on more risk that you are comfortable with, she added.

Timing the market is a losing bet

Talk yourself down from making any sudden financial moves, Chatzky advised.

Trying to time the market is almost always a bad idea, other financial experts also say. That’s because it’s impossible to know when good and bad days will happen.

For example, the 10 best trading days by percentage gain for the S&P 500 over the past three decades all occurred during recessions, often in close proximity to the worst days, according to a Wells Fargo analysis published last year.

And, although stocks go up and down, the S&P 500 index has an average annualized return of around 10% over the past few decades.

Subscribe to CNBC on YouTube.

Continue Reading

Personal Finance

How to file for a free tax extension if you can’t make April 15 deadline

Published

on

Galina Zhigalova | Moment | Getty Images

If you can’t file your taxes by the April 15 deadline, there’s a free, easy way to submit a federal tax extension online, experts say.  

Nearly 1 in 3 American admit that they procrastinate when it comes filing their taxes, according to a January survey of more than 1,000 U.S. filers from IPX1031, an investment property exchange service. In addition, about 25% do not feel prepared to file their taxes, the survey found.

As of March 21, the IRS received roughly 80 million individual returns of the 140 million expected this filing season, the agency’s latest reporting shows.

More from Personal Finance:
How to spring-clean your finances. It can ‘make you feel more secure,’ advisor says
Tariffs will likely raise much less money than White House projects: economists
The federal government is phasing out paper checks. Here’s who will be affected

Many natural disaster victims have an automatic tax extension, which varies by jurisdiction. Military members serving in a combat zone also have more time to file. 

However, the federal tax deadline for the majority of taxpayers is April 15. It’s possible to push that due date to Oct. 15 by filing for an extension.

But “it’s an extension to file, not an extension to pay,” said Jo Anna Fellon, managing director at financial services firm CBIZ.

“It’s an extension to file, not an extension to pay.”

After the tax deadline, you will start incurring the failure-to-pay penalty of 0.5% of your unpaid taxes for each month or partial month that your taxes remain unpaid. The failure-to-pay penalty has a maximum charge of 25% of your unpaid taxes.

That’s cheaper than the failure-to-file penalty, which applies when you don’t submit your return by the deadline. The failure-to-file penalty is 5% of unpaid taxes monthly, also limited to 25%.

But you’ll also owe interest on your unpaid balance, which is currently 7% and accrues daily after April 15.

You can estimate your taxes owed by creating a “pro forma return” — or mock version of your filing — using as many tax forms as possible, Fellon said.

The ‘easiest way’ to file an extension

There are a few free options to file a tax extension.

For federal taxes, you can complete Form 4868 and mail it to the IRS. But it’s better to file digitally to avoid processing delays amid the agency’s shrinking workforce, experts say. Paper filing can also increase fraud risk, they say.

The “easiest way” is by choosing “extension” when making a payment for 2024, which automatically submits Form 4868, according to Tommy Lucas, a certified financial planner and enrolled agent at Moisand Fitzgerald Tamayo in Orlando, Florida.

“It takes all of five minutes,” and you can double-check the transaction via your IRS online account, he said.

IRS Direct Pay

Internal Revenue Service

Alternatively, you can file your extension for free online via IRS Free File, a public-private partnership between the IRS and several tax software companies.   

For the 2025 season, you can use IRS Free File for returns if your adjusted gross income, or AGI, was $84,000 or less in 2024. But there’s no income limit to file an extension, Lucas said.

Don’t miss these insights from CNBC PRO

Tax season is a prime time for scams: Here’s how to protect yourself

Continue Reading

Trending