Medicare’s Annual Open Enrollment Period
Unlike the Initial, Special and General Enrollment Periods through which one first transitions onto Medicare Part A and/or Part B, Medicare’s Annual Open Enrollment Period is for everyone already on Medicare. Medicare’s Annual Open Enrollment Period is every October 15th through December 7th for a January 1st effective date.
During Medicare’s Annual Open Enrollment Period one may:
- Change from original Medicare to an Advantage Plan
- Change from an Advantage Plan back to original Medicare
- Change from one Advantage Plan to another Advantage Plan
- Change Part D Plans
In our experience, this can be a very stressful time of year due to the many ads promoting Advantage Plans. Who could have guessed that Joe Namath would have so much credibility when it comes to healthcare coverage decisions? Advantage Plans are potentially the most profitable for insurance companies and brokers to sell so it shouldn’t be surprising that they are aggressively marketed. And there are so many options! Most people in a metropolitan area have a choice of twenty plus Advantage Plans and/or Part D Plans.
As discussed in previous videos, Advantage Plans can add limited benefits not covered by original Medicare but please read the fine print. Understand the pros and cons. Original Medicare has more freedom to choose providers because one can be covered at any hospital and with any physician who has a relationship to Medicare. Advantage Plans often have a lower premium, or no premium, but have more out-of-pocket exposure than the combination of original Medicare and a supplement. Advantage Plans will also have a network of providers and are likely to have rules like prior authorization.
Please remember that the guaranteed issue period for a Medicare supplement is six months from one’s Part B effective date. As a result, if you choose to return to original Medicare from an Advantage Plan, you may be subject to medical underwriting and your application for a supplement may be denied. Supplements are private products, not government benefits, and the Medicare Annual Enrollment Period is for changes among MEDICARE products. The Annual Enrollment Period has nothing to do with Medicare supplements. Only New York, Connecticut, Massachusetts and Maine do not allow medical underwriting of supplements and their approaches differ.
You might want to change Part D (drug) plans if a drug you are taking is not on your Plan’s formulary, you are unhappy with the Plan’s customer service, or you find an alternative Plan that might save you money. You can research your options on medicare.gov. Beware of changing Plans for small dollar potential savings. After all, we don’t know what we might be prescribed in the future and there can always be glitches in changing coverage. During this time of year, millions of people are reviewing their options and systems can be challenged. As a result, if you enroll in a new plan, carefully track your new enrollment and make sure to properly handle your disenrollment.
Finally, those who are on Medicare Part A but waiting to get on Part B during a General Enrollment Period, might consider enrolling in a Part D Plan during the Annual Enrollment Period for January 1st rather than waiting for July 1st when their Part B will take effect. If you are in this situation, you can’t enroll in an Advantage Plan or a Medicare Supplement for January 1st but you are eligible to enroll in a Part D Plan for a January 1st effective date.
The wisest approach of course is to carefully evaluate the pros and cons of original Medicare versus Advantage Plans when you first transition onto Medicare. One’s objective is to make a “forever” decision to the extent possible at that time in order to minimize future changes in coverage. Should a change in coverage seem desirable, please do your homework or find someone who will do it for you before making a decision based on a sales pitch that benefits the seller. And if you happen to see Joe Namath, please ask him to call me so I can give him some football insights!