What You Should Know About Medicare’s Annual Enrollment Period (AEP)
One of the important rules to know about Medicare is that you can only change plans during certain times of the year. Medicare’s Annual Enrollment Period (AEP) is It is officially known as the “Medicare Advantage & Prescription Drug Plan Annual Enrollment Period.”
Sometimes referred to as Medicare Fall Open Enrollment, it is especially important because it is the only time during the year when you can pick a new Medicare Advantage (Part C) or Prescription Drug Coverage (Part D) plan, among other options.
What is the Medicare Annual Enrollment Period?
Medicare’s AEP is the time when all Medicare beneficiaries are eligible to make changes to their Medicare coverage. One important thing to note is that you can’t use the AEP to enroll in Part A or Part B for the first time.
During the AEP, you can review your current coverage and proposed changes in coverage for the coming year, you can decide if there’s another plan that will be better suited to your needs.
You may find another plan in your area that offers better coverage at a more affordable price based on changing market conditions and your changing health needs.
For example, if you start taking a new drug during the year, which can often be the case, it’s quite likely that you’ll find more suitable Plan D coverage is you aggressively shop around. Many people often find more suitable coverage that includes the drugs you take with fewer restrictions and lower prices.
When is the Medicare AEP?
The Medicare Annual Enrollment Period October 15 through December 7 every year.
Changes you make during the AEP will usually become effective on January 1 of the following year.
Some people confuse Medicare’s AEP with Open Enrollment for state or federal health insurance Marketplaces. In 2019, the Marketplace Open Enrollment Period was November 1 through December 15.
If you didn’t act during this period you can’t get coverage during 2020 unless you qualify for a Marketplace Special Enrollment Period. The Marketplace is different from Medicare and is not meant generally not meant for people who have Medicare or who are eligible for Medicare.
This can be confusing with Medicare’s AEP because there is some overlap on enrollment for both types of insurance.
What Changes Can I Make During the Medicare AEP?
To help you decide if you want to make changes, if you currently have a Medicare Advantage Plan or Part D Plan, you will get an Annual Notice of Change (ANOC) and/or Evidence of Coverage (EOC) from your current provider.
This will detail changes in costs, benefits, service area adjustments, provider network changes, and rules for the coming policy year.
Based on this information, you’ll be better equipped to decide if you want to make any of the following changes in your coverage. You are not required to re-enroll in Medicare coverage every year but it is a smart idea to review your coverage every year to see if your current coverage still makes the most sense for you.
If you decide you want to make changes your agent will be able to help you:
- Switch from Original Medicare only to a Medicare Advantage plan
- If you already have a Medicare Advantage Plan, you can also switch back to Original Medicare Part A and Part B. If you do this, also consider adding Part D coverage as well. You will have until March 31 to enroll in Part D coverage if you take this action.
- Depending on where you live, you may be able to buy a Medigap policy to help pay for Original Medicare costs
- Switch between Medicare Advantage and Medicare Supplements
- Switch into a new Medicare Advantage plan
- Add Part D prescription drug coverage
- Switch Plan D plans (especially important if your current Plan D coverage is ending at the end of the current year. If you do nothing before December 31, you’re automatically switched into Original Medicare and could face gaps in prescription drug coverage)
- Opt out of Plan D coverage completely
Why Change Medicare Plans During the Medicare Annual Enrollment Period?
After you review your current coverage, you may not need to do anything during AEP.
The reason you need to pay close attention to your current benefits before and during the AEP is that you’re limited as to when you can make changes. Unless you meet other specific criteria, the AEP is generally your best time of year to make changes.
Health insurance companies work year-round to update their health plans so that those changes can be rolled out at this time.
Your personal health insurance needs could change in addition to those being made by providers. Leading up to the AEP, you’ll probably have some indication of whether or not a change is warranted.
When you’re able to zero in on a specific range of dates, it means you don’t have to constantly worry about completely a review and making changes “some day.” An AEP brings focus and timeliness to your efforts.
In some cases, your benefits are simple and straightforward and you’ll arrive at answers with relative ease. In other cases, you may want to build multi-layered health plan coverage.
Your personal finances may have changed, meaning you can now add a Medigap plan or you can pay bit more for better coverage under a Part C Medicare Advantage plan. Similarly, you may need to adjust your coverage downward if you’ve been hard hit financially in other ways.
The point is, during the AEP is when you’ll generally have the most flexibility to be able to design a plan that best meets your needs. If you have even an inkling that this might be the case, talk to a licensed agent to help you sort through your options.
It’s possible that a change in your plan benefits or your provider network will change how you feel about your plan. It’s a good idea to speak with an agent even if you don’t think you want to change your plan.
A licensed agent can tell you about all the changes to your current plan and help you decide whether or not it’s time to change Medicare plans.
Choosing a Part C Medicare Advantage Plan
Why do I Need Medicare Advantage?
One of the most important elements of the AEP is that you can change your Medicare Advantage enrollment status by changing, opting in or opting out of your existing Medicare Part C coverage.
While Part A and Part B Original Medicare do provide you with considerable benefits, they don’t fully cover all the services you may need throughout the course of the year at the levels you want.
Medicare Part C plans are offered by private companies who must meet specific criteria from Medicare, as well as offering certain enhancements.
Part C plans must cover all benefits of Medicare Part A and Part B.
What makes them attractive for many people is that most include prescription drug coverage normally found in Part D plans.
In addition, many Part C plans also offer dental and vision care, hearing tests and hearing aids, and various wellness programs. Some plans are offered with and without provider networks.
And, Part C plans will offer limitations on annual out-of-pocket expenses for Medicare-covered services.
How to Choose a Medicare Part C Plan
There are three primary things to consider when shopping for a Medicare Advantage plan.
The first is cost. You need to make sure that the additional premium you’re paying provides you with the increased value you want to justify a higher monthly expense. There are plans and premiums to fit many different budgets.
Second, because there are so many plans with a variety of benefits, you need to make sure the Part C plan you choose best meets your individual needs. For example, you may have several prescription drugs that you take and so you’ll want to make sure you get top-line coverage for this when shopping for a plan.
Or, you may be looking at significant costs for durable medical equipment such as a wheelchair, CPAP unit or other assisted living devices.
Third, you will need to pick a plan that provides coverage in your specific geographic area. Not all plans are available in all areas. Some people will only have one or two options, while others may have a long list of Medicare Advantage plans that they’re eligible for.
Medicare Advantage plans are different in every county and zip code, so it’s important that you’re looking at plans available in your area.
Before choosing a plan, you should also consider:
- What doctors are in the plan’s network?
- What prescriptions (if any) are covered?
- What are the exact value-added benefits, like fitness programs, meal delivery, or dental?
- Do I qualify for any savings?
Choosing a Medicare Part D Prescription Drug Plan (PDP)
You may find a Medicare Advantage plan that is perfect for you, except it may not have adequate prescription drug coverage that you need. Or, you may decide to forgo a Part C plan completely and only pay for a stand-alone Medicare Part D Prescription Drug Plan.
Again, the AEP allows you to pursue the option if that’s what works best for you.
If you go this route, the two primary considerations are the plan cost and the formulary.
In a nutshell, the formulary is the list of drugs that the Part D plan covers. This can include hundreds of generic and brand name prescription drugs.
Providers publish this list annually as part of full disclosure and as a way of offering you the medications you need at the lowest possible cost.
Some drugs may be covered 100%, while others may have co-pays ranging from $5 to $20 or more. There are also instances when you could be asked to pay a percentage of a brand name drug listed in the formulary, and this could make your out-of-pocket expenses higher.
Also be sure to find out if you qualify for any kind of savings and what pharmacy restrictions, if any, you may encounter.
Formularies are divided into tiers. Drugs are placed into these tiers based on the type of drug. Every provider is a bit different, but typically tiers are divided into three or four categories as follows:
- Tier 1 drugs are usually generics and have the lowest copays.
- Tier 2 drugs include non-preferred generics and brand-name medications. Drugs in this tier cost more than tier 1 medications.
- Tier 3 includes generics, preferred brands, and non-preferred brands. Out-of-pocket prices are higher than in tiers 1 and 2. Some providers may place a drug in this tier if it’s new or there’s another similar drug on a lower tier.
- Tier 4 includes generics, preferred brands, non-preferred brands, and specialty drugs to treat rare or serious medical conditions. Out-of-pocket costs are the highest in this tier.
In some cases, a health plan may not cover specific prescription drugs if it is considered less effective than other drugs, there is a generic version, or the drug costs a lot more than another equally effective drug.
To view a plan’s formulary, go to the Summary of Benefits and Coverage. If you can’t find it, call the insurer or your agent and ask for help.
There’s one final thing to consider after you’ve chosen coverage. Don’t assume your doctor will know what’s in your formulary when they prescribe medications for you. Some plans share this information upfront with providers, but not always.
Check with your doctor and your provider, but ultimately it’s up to you to make sure you are covered.
When Can I Change Medicare Plans?
The AEP covers a lot of circumstances, but it may or may not be the only time you can change plans.
Also, keep in mind that enrollment periods do not apply to Medicare Supplements. You have more freedom in this case because once you have Original Medicare, you can enroll in Medicare Supplement plans at any time of the year.
Click here to start looking for Medicare Supplement plans in your area.
These are the other Medicare enrollment periods:
Initial Enrollment Period (IEP)
The Initial Enrollment Period is when you are first eligible for Medicare. If you are not already collecting Medicare benefits, your IEP is a seven-month period that begins three months before your 65th birthday, includes your birthday month, and ends three months after your birthday month.
For example, if your birthday is April 8th, your initial enrollment period would be from January 1st (the 3 months before) through June 1st (April, plus the three months after).
If you become eligible to receive Medicare earlier than 65 because you have a qualifying condition, and you have been paid SSDI for more than 24 months, your Initial Enrollment Period begins in your 25th month of receiving SSDI benefits.
This waiting period is waived if you are receiving payments because you have end-stage-renal-disease (ESRD) or amyotrophic lateral sclerosis (ALS).
Special Enrollment Period (SEP)
The Special Enrollment Period is a unique period that not everyone will qualify for. You can qualify if you have special circumstances or a qualifying event such as low-income or a life change such as moving to a new county or state where different coverage is available, a loss of qualifying health coverage, a change in household size, and others.
You can also qualify for a SEP if you lose coverage through your job or your spouse’s job, or you lose Medicaid or Children’s Health Insurance Program (CHIP) coverage.
You don’t qualify if you voluntarily ended your prior coverage, or due to non-payment of premiums, or if you lost coverage more than 60 days prior.
A qualifying event can take place at any time during the year, making you eligible to enroll at that time.
If you qualify for a SEP based on income or health, you may be able to change plans once per quarter for the first three quarters of the year. If you qualify for an SEP based on a life change (like moving and losing coverage), you’ll typically have 30 days from the life change event to change plans.
General Enrollment Period (GEP)
Medicare’s General Enrollment Period runs from January 1 through March 31 every year and is for people who missed their IEP. During the GEP, you can enroll in Medicare Parts A and B for the first time.
The GEP is only for enrolling in Original Medicare.
If you want to add Medicare Advantage, you can do that from April 1 through June 30, or wait until the Annual Enrollment Period in the fall.
Open Enrollment Period (OEP)
In 2019, CMS introduced a new Medicare open enrollment period.
The Medicare Advantage Open Enrollment Period is for people who have Medicare Advantage and are unhappy with their plan. You can only make one change during the OEP which runs January 1 through March 31 annually.
Changes become effective on the first day of the month after your change request is accepted.
You can only make three types of changes:
- Change from one Medicare Advantage plan to another Medicare Advantage plan
- Change from a Medicare Advantage plan with prescription drug coverage to Original Medicare with Part D prescription drug coverage
- Drop your Medicare Advantage plan in favor of Original Medicare only (with the option to add Prescription Drug Coverage)
Unless you meet circumstances for other enrollment periods, you will have to wait until the next Annual Election Period to make other types of changes.
How to Change Medicare Plans During the Annual Enrollment Period
Changing Medicare plans is a big decision. You need to take the time to figure out how your healthcare needs and resulting health coverage may change over the next year.
Ask yourself these questions to start:
- Do you have prescription drugs that your current plan does not cover?
- Have you recently developed a new illness or disability that requires different coverage?
- What about your financial status. How has it changed?
- Can you suddenly afford more coverage, or do you now qualify for savings?
If you’re planning on making changes during the AEP, start your research and due diligence early. Also, enlist the help of a licensed and experienced agent who specializes in Medicare policies to help determine the best plan options for you.
Do your own research, and talk to a licensed agent who specializes in Medicare policies to determine the best plan options for you.
We can help answer your questions so you can decide whether or not you need to change Medicare plans during AEP.
If you want to know more, call us to set up a FREE appointment at 844-431-1832.