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Medicare: Understanding the Annual Election Period

MedicareUnderstandingTheAnnualElectionPeriodBrought to you by MedicareFAQ, this is part of a series to help us all learn about the Medicare Annual Election Period (often known as open-enrollment). 

The Medicare Annual Election Period (AEP) is from October 15th through December 7th, every year. This is the time of year that Medicare Beneficiaries can compare or switch certain Medicare coverage without penalty.

During AEP approximately 1 in 5 people with a Medicare Advantage plan will change plans during this time. Plan benefits and costs change annually, so making sure your plan is still the best plan is a smart move.

Changes You Can Make During AEP

  • You can go from one Medicare Advantage plan (Medicare Part C) to another Medicare Advantage plan.
  • You can move from one Medicare Part D prescription drug plan (Medicare Part D) to a new Medicare Part D drug plan.
  • You’ll be able to move from a Medicare Advantage plan to Original Medicare (Medicare Part A and Part B).
  • You can also go from just Original Medicare to a Medicare Advantage plan.
  • You’ll be able to join or leave a Medicare Part D plan.

When you enroll in a plan during the Medicare Annual Election Period the coverage begins January 1st of the following year. For example, if you enrolled in a Medicare Advantage plan on October 30, 2018, then the plan's coverage would begin on January 1, 2019.

You can switch Medicare or Medicare Part D plans during AEP even if you have pre-existing medical conditions. There is no penalty to switch and anyone that receives Medicare can make these important changes to their coverage during the 2019 Annual Election Period.

Of course, you don’t have to change your coverage during AEP, but it’s a good idea to compare your plan to other local plan options. There may be a plan that will save you money for similar coverage, and this is the time to find out what is best for you, for next year.

Medicare Advantage Disenrollment Period

The Medicare Advantage Disenrollment Period (MADP) is from January 1- February 14 each year, the MADP gives you one more chance to leave your Part C Medicare Advantage plan. If you leave your Medicare Advantage plan, you’ll be on Original Medicare (Part A and Part B).

During this time, you can’t join a new Medicare Advantage plan. When you leave your Medicare, Advantage plan you will have coverage through the end of the month with your Part C provider. For example, if you request to leave your Medicare Advantage plan on January 28th, your last day of coverage will be January 31.

After you Decide to Disenroll

There are some options you’ll have after you disenroll from your Medicare Advantage plan. While you can’t get another Part C plan, you will be able to add a Medicare Supplement policy to your Original Medicare.

Medicare Supplement

Once you have Original Medicare, you can join a Medicare Supplement plan at any time, provided you meet eligibility requirements. Talking with a licensed insurance agent in your state is the best way to know if you are eligible for a Medicare Supplement.

You may be subject to medical underwriting if you are purchasing a supplement outside your open enrollment period, which is when you are first eligible for Medicare.

Medicare Part D

If you chose to disenroll from your Medicare Advantage plan during the MADP, then you are eligible to join a stand-alone Medicare Part D prescription drug plan during this time (until February 14). This plan will help pay for your prescriptions, this is available to anyone, even if your previous Medicare Advantage plan didn’t include Part D coverage.

Original Medicare

Original Medicare can be costly, but it doesn’t have to be, at least not with additional coverage. The best time to sign up for Medicare is when you are first eligible. You have a 7-month Initial Enrollment Period to sign up for Part A and/or Part B.

For example, if you’re eligible for Medicare when you first turn 65; you can sign up 3 months before the month you turn 65, the month you turn 65, or the month after you turn 65. If you wait until the month you turn 65 or the 3 months after to enroll in Part B, your coverage will be delayed. This could cause a gap in your coverage.

In the hospital, you will be responsible for your Part A deductible, you pay the first $1,216. After 60 days, you will start paying a portion of each day’s cost. The American Heart Association says the average cost of heart surgery is $62,509 and, in that case, your Part B copayment would be over $12,000.

These coverage gaps could leave you with tens of thousands of dollars in hospital bills. Therefore, most people purchase Medicare Supplement insurance or enroll in a Medicare Advantage health plan.

Both plans are offered by private insurance companies and they are required to follow Medicare guidelines in what they can sell.

Benefits to a Medicare Supplement

Medicare supplements are also called Medigap plans, these plans will fill the gaps in Medicare. There is a premium that is in addition to what you already pay for Medicare Parts A (many people get this free), B and D.

Medicare supplement plans are sorted by letter. Your options for 2019 include Plans A, B, C, D, F, G, K, L, M, and N. What these plans include is standardized by Medicare and their costs can vary, it is worth shopping around.

Many people go with Plan F, the most expensive choice because it covers nearly all the things Original Medicare doesn’t cover. A person with a Plan F Medicare Supplement will have few or no out-of-pocket expenses.

 If you live in more than one state throughout the year, a Medicare supplement is probably a better choice for you. This is also true if you travel frequently. Some Medicare Supplement plans provide coverage when traveling outside of the United States and cover you in all 50 states; Medicare Advantage plans do not.

Benefits to a Medicare Advantage Policy

A Part C plan may provide more help at a lower cost than traditional Medicare with a Medicare Supplement. Instead of paying for Parts A, B, D, and a Medigap policy, you can enroll through a private insurance company that, in many cases will cover everything provided by Parts A, B, and D and may offer additional coverage options.

In most cases, you will pay your Medicare Advantage premium along with your Part B premium. Medicare Advantage plans are like private health insurance plans. For the most part, you will have a small co-pay when you visit a health care provider. Depending on what’s available in your area, there could be HMO or PPO network plan options.

Part C plans also have a yearly limit on your total out-of-pocket expenses, this helps you have control over your health care spending costs. Each plan has different benefits and rules. Most of these plans include Part D prescription drug coverage and some plans may require a referral to see a specialist.

Medicare Advantage plans will typically limit you to the doctors and facilities within the HMO or PPO, you may or may not be covered when you go out-of-network for care. If you require particular specialists or hospitals, you need to check whether they are covered by the plan you select.

Medicare Advantage plans only operate within a certain region.

Do What is Best for You

It is illegal for an insurance company to sell you both a Part C plan and a Medicare Supplement policy. You will need to make the choice base on your budget, lifestyle, and health. The policy that benefits your neighbor may not be the best policy for you.

Having any policy to go with your Original Medicare will offer you greater benefit and peace of mind. Talking with a licensed agent in your state can give you the confidence you want in your insurance coverage.

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