On October 15th, the Medicare Annual Enrollment Period (AEP), sometimes referred to as Medicare Open Enrollment, starts. This is the time to make sure you have the best Medicare coverage for the upcoming year.
Medicare beneficiaries have 54 days, until December 7th, to make any changes to their Medicare Advantage and Part D drug coverage for 2021.
To understand what you should do and are allowed to do during Medicare Annual Enrollment, first you need to understand the 4 parts of Medicare.
Part A of Medicare covers your hospital and skilled care bills. It is premium-free for most people, so it is recommended you sign-up right at age 65, even if you have other coverage. It will give you some additional coverage for free.
Part B of Medicare covers your doctor and outpatient bills. In 2020, it costs $144.60 per month (unless you are high income and pay IRMAA).
Due to the cost, it is recommended that you sign up for Part B once you lose your work coverage. If you do not sign up for Part B when you are eligible, you will face penalties as well as delayed coverage.
Part A and Part B makeup Original Medicare. Original Medicare is designed to cover 80% of your costs, leaving you with 20%. You have to be signed up for Part A and Part B in order to have the ability to sign up for a Medicare supplement, an advantage plan, or a drug plan, which covers the other 20%.
Part C of Medicare is also referred to as Medicare Advantage. Medicare Advantage plans allow you to elect to receive your Medicare Part A and Part B coverage from a private insurance company instead of the government.
Part D is your prescription drug coverage. Part D is received through a private insurance company, so costs will vary.
What can I do during the Medicare Annual Enrollment Period?
The Medicare Annual Enrollment Period takes place from October 15th – December 7th every year. During this period in 2020, Medicare beneficiaries have a lot of choices they can make for their coverage in 2021.
Even if you do not end up making any changes to your Medicare coverage, it is important to look into your options every single year. Companies can change plans and you need to double check that your doctors and medications will still be covered in the upcoming year.
You can move from a Medicare Supplement to a Medicare Advantage Plan
Unless you are just starting Medicare, or you qualify for a special enrollment period, the only time you can move to a Medicare Advantage plan is during AEP.
Like we mentioned above, Medicare Advantage plans, or Part C plans, are where you elect to receive your Part A and Part B from a private insurance company.
There are many reasons why you might choose an Advantage plan over a Medicare
Supplement, including a lower monthly premium. Many Advantage plans come with a $0 monthly cost. They also can include extra benefits, such as vision, dental, and hearing coverage.
Advantage plans almost always include drug coverage as well, so you do not need a separate Part D drug plan.
Advantage plans are able to offer lower prices and extra benefits since they limit their customers to using networks. You must go to their doctors and their hospitals in order to get coverage.
For many people, this works out very well, as you are used to networks from your work coverage. If you would like to look at Advantage plans during this Annual Enrollment Period, make sure you work with a broker so you can see all your options.
Advantage plans vary by zip code, doctors, and the prescriptions you take, so the plan and company that works for someone else might not work for you.
You can move from a Medicare Advantage plan to a Medicare Supplement
If you are currently on a Medicare Advantage plan, you can use the Annual Enrollment Period to switch to a Medicare Supplement plan.
The most common reason beneficiaries switch to a Supplement is because it allows you to go to any doctor or any hospital that accepts Medicare across the United States. There are no networks.
The big thing to note here, when you are switching to a Medicare Supplement, you are going to have to answer health questions. If you work with a broker, like Cardinal, they are going to have many more options to choose from. This means not only will you find the best price, but it is also more likely that if you have some health conditions, they will find a company that will approve you.
You can change your Medicare Advantage Plan
Advantage plans are sold by the same private insurance companies that sell Medicare Supplements and Drug plans, so it can get confusing.
Companies such as Humana, Aetna, UnitedHealthcare/AARP, and Blue Cross Blue Shield sell all of these, so you need to make sure you understand which product you have.
Every year, these companies are going to make adjustments to their Advantage plans. These adjustments include changing the doctors covered, the drugs covered, and the prices of their premiums, deductibles, and copays.
You need to make sure the Advantage plan you are currently using is going to cover your needs, and if it is not, find a new Advantage plan that will.
You can change your Part D Prescription Drug Plan
The Medicare Annual Enrollment Period is the only time for most beneficiaries to adjust their drug coverage.
Drug plans are not standardized, so each plan is going to have different preferred pharmacies and drug tiers. Their deductibles, premiums, and copayments are also going to differ.
Every year, drug plans change their formularies and preferred pharmacies. This is why it is so imperative to double check your drug coverage during this season.
If you are on a Medicare Advantage plan, it is likely that it includes drug coverage and you do not need a seperate Part D plan. If you are in Original Medicare, you do need a drug plan.
Coverage through work or the VA will usually qualify as creditable coverage and you will not need Part D drug plan if you are on one of these.
Even if you do not have any prescription drugs, it is important to consider getting drug coverage. If you do not have any drug coverage that the government counts as credible, you will receive a penalty, paid for life, once you do decide you need drug coverage.
We recommend our clients in this situation sign up for the lowest cost drug plan ($13-$20/ month) in their area to avoid this penalty.
If you are already in a drug plan, you will be kept in the same plan, even if it has changed, if you don’t do anything.
You can go to Medicare.gov to look at the plans available in your zip code or work with a broker who represents multiple drug plans.
Like Medicare Advantage plans, it is so important to make sure you get this right, as you will be with this plan for a year, and mistakes could end up costing you a lot of money.
You can switch your Medicare Supplement Plan
While you can change your Medicare Supplement during Medicare Annual Enrollment, it is important to keep in mind that YOU CAN DO THIS ANY TIME OF THE YEAR.
You can change your Medicare Supplement 365 days per year.
Medicare Supplements are standardized, meaning every company that offers a Plan G is offering the exact same coverage, the only difference is the price.
Medicare Supplements regularly go up in price. We recommend that you look at your options for switching your supplement every year or two.
You can run a report of these prices here without giving any personal information. We recommend the Plan G for most of our customers, but the Plan F and Plan N are great choices as well (Want to know the differences between these plans?).
You will have to answer health questions to move from one Supplement to another, but if you work with a broker, like Cardinal, who represents over 35 Medicare Supplement companies, you can usually find one where you can pass the underwriting and get approved.
Medicare Annual Enrollment Period comes with a lot of choices. At Cardinal, we know that it can be confusing or overwhelming.
We take our time to explain our recommendations as well as our reasoning so clients can feel confident in their choices. If you would like this complimentary Medicare consulting, leave your information in the box below or give us a call!