Many people with Medicare think that once they enroll and choose their coverage, they’re set for life. But, just like you, your Medicare coverage needs a checkup every so often.
And if you find you want to make changes to your coverage, Medicare’s annual Open Enrollment Period is when to do it. Medicare plan costs, benefits, provider networks and prescription drug formularies can change each year, making an annual review important.
What Is the Medicare Open Enrollment Period?
It’s a specific window of time, October 15 to December 7 of every year, when people with Medicare can change their health plans and/or their prescription drug coverage. Changes made within the Open Enrollment Period will go into effect on January 1 of the following year.
I know there are many parts to Medicare. What can be changed during the open enrollment period?
During this period, you can switch from Original Medicare to a Medicare Advantage plan, or vice versa. You can also switch from one Medicare Advantage plan to another or join, drop or switch Medicare prescription drug plans.
The options available to you depend on the type of Medicare coverage you currently have. You can learn more about the changes permitted during Open Enrollment at Medicare.gov.
Why would I want to make changes to my plans?
Even if your current coverage is working well, it is important to review it each year. Medicare Advantage and prescription drug plans can change their premiums, deductibles, copayments, covered medications, provider networks, pharmacy networks and other plan provisions from one year to the next. Your own medications, healthcare needs and preferred providers may also have changed.
Each fall, your plan should send you an Annual Notice of Change explaining changes that will take effect in January. Review this notice carefully and compare your current plan with the options available for the coming year.[1]
As part of your review, consider:
- Whether your doctors, hospitals and other providers will remain in the plan’s network
- Whether your medications are still covered and whether their cost or coverage requirements have changed
- Whether your preferred pharmacy remains in the plan’s network
- Changes to premiums, deductibles, copayments and coinsurance
- Whether the plan requires referrals or prior authorization for services or medications you use
- Whether another plan may better meet your current healthcare and financial needs
If your plan will continue to be offered and still meets your needs, you generally do not need to take action to remain enrolled.
What should I consider before switching from Medicare Advantage to Original Medicare?
If you are considering leaving Medicare Advantage for Original Medicare, think carefully about how you will address costs that Original Medicare does not cover. You may want to purchase a Medicare Supplement Insurance policy, commonly known as Medigap.
However, outside your initial Medigap Open Enrollment Period or certain guaranteed-issue situations, federal law generally does not guarantee your ability to purchase a Medigap policy. Depending on your health history and state law, an insurer may be able to deny your application or charge you more. Medigap eligibility rules can vary based on your circumstances and state law. Before leaving Medicare Advantage, investigate your Medigap eligibility and costs so you understand how the change could affect your coverage. Learn more about buying a Medigap policy.
How do I make changes?
You can get plan information, including information about making changes, at the official Medicare website, Medicare.gov, or by calling 1-800-MEDICARE (1-800-633-4227). Whether you call or visit the website, you’ll be able to compare coverage options and estimate your Medicare costs.
When you enroll in a new Medicare Advantage or prescription drug plan, your existing plan generally ends when the new coverage begins. Confirm the effective date of your new coverage before separately canceling an existing plan.
Are there other times when I can change my coverage?
Possibly. The Medicare Advantage Open Enrollment Period runs from January 1 through March 31 each year. It applies only to people already enrolled in Medicare Advantage. During this period, you can make one change by switching to another Medicare Advantage plan or returning to Original Medicare. If you return to Original Medicare, you may also be able to join a separate Medicare prescription drug plan.
The Medicare Advantage Open Enrollment Period does not allow someone with Original Medicare to join a Medicare Advantage plan or switch from one stand-alone prescription drug plan to another.
Certain events, such as moving or losing other coverage, may also qualify you for a Special Enrollment Period. The changes you can make and the applicable deadlines depend on the qualifying event. Medicare.gov provides additional information about the different enrollment periods.
I’m going to turn 65 this year. Do I have to wait until the open enrollment period to sign up for Medicare?
No. When you’re first eligible for Medicare, generally around age 65, you have a seven-month Initial Enrollment Period during which you can sign up for Part A and/or Part B. That seven-month period covers the three months prior to the month you turn 65, the month in which you turn 65, and the three months after you turn 65.
When your coverage begins depends on when you enroll. If you enroll before the month you turn 65, coverage generally begins the month you turn 65. If you enroll during or after your birthday month, coverage generally begins the following month. Special timing rules apply if your birthday falls on the first day of the month.
Not everyone needs to enroll at age 65. For example, people who have qualifying coverage based on their or their spouse’s current employment may be eligible for a Special Enrollment Period that allows them to delay Part B without a late-enrollment penalty. Retiree coverage, COBRA and individual health insurance generally are not treated the same as active-employment coverage for this purpose. Before delaying Medicare, verify how your existing coverage coordinates with Medicare and whether it qualifies you for a Special Enrollment Period.
If you do not enroll when first eligible and do not qualify for a Special Enrollment Period, you may experience a gap in coverage and face late-enrollment penalties.
But I heard that Medicare is something you get automatically. Do I need to sign up?
It can be confusing. People who are receiving Social Security or Railroad Retirement Board benefits at least four months before turning 65 are generally enrolled automatically in Medicare Part A and Part B. People who are not already receiving these benefits typically need to enroll themselves.
Because individual circumstances vary, confirm your enrollment status and deadlines rather than assuming your Medicare coverage will begin automatically.
Get the information you need
As you can tell from this brief article, Medicare can be complicated. There are many nuances to understand, and Medicare costs, plans and coverage provisions can change from year to year. If you miss an important deadline, you could end up paying a penalty or experiencing a gap in coverage.
Review information from your plan and use trusted resources, including Medicare.gov and 1-800-MEDICARE, before making a coverage decision.
Modera can help
At Modera, we focus on our clients’ entire financial lives, including how healthcare coverage and costs fit into their broader financial plans. If you’d like to ask us about Medicare or other health-related financial issues, please get in touch. We can help you evaluate how Medicare decisions may affect your retirement income, healthcare costs and overall financial plan, and direct you to resources for additional coverage information.
