Navigating the Medicare maze is a complicated feat, and the annual enrollment period can leave seniors and family caregivers feeling especially confused. Here are seven things to know about Medicare Open Enrollment (MOE) that will help you make informed decisions about health insurance coverage.
1. Medicare Open Enrollment runs from October 15 to December 7 every year.
Whether you’re initially joining Medicare or changing your existing coverage, timing matters because Medicare sets windows during which beneficiaries can make specific kinds of changes. For example, your Initial Enrollment Period (IEP) begins 3 months before your 65th birthday, includes your birthday month, and lasts for 3 months after. The initial enrollment period is the first opportunity most seniors have to make decisions about their health insurance coverage.
Other enrollment periods recur, like MOE. Certain life events and changing health needs and costs may necessitate exploring alternative coverage options each year. MOE is the time to do so. Being mindful of these annual deadlines can help beneficiaries choose from the most coverage options at the lowest prices.
2. There are two ways to get Original Medicare.
Seniors can choose Original Medicare (Parts A and B) on its own, with the option to add Part D prescription drug coverage. Those who collect benefits from Social Security or the Railroad Retirement Board (RRB) will automatically be enrolled in Medicare Part A (Hospital Insurance) and Medicare Part B (Medical Insurance). Most beneficiaries get premium-free Part A, but there is a monthly premium for Part B. If you don’t need to keep Part B (for example, if you are covered through your employer or your spouse’s employer), you must follow the directions when you get your Medicare card, indicating you don’t want it. Otherwise, you will be charged.
The other option is a Medicare Advantage Plan (Part C) that bundles the same benefits of Original Medicare with extra benefits and often includes prescription drug coverage. Advantage Plans are sold by private insurance companies that contract with Medicare. These companies must follow certain guidelines set by Medicare, but each Advantage Plan can charge different out-of-pocket costs and set different rules for how beneficiaries receive services (like whether you need a referral to see a specialist or if you have to use in-network doctors, facilities or suppliers). These costs and rules can change each year.
3. What can you do during Medicare Open Enrollment?
Beneficiaries can choose from the actions below. Any changes made during the MOE period will go into effect January 1 of the following year.
- Change from Original Medicare to a Medicare Advantage Plan.
- Change from a Medicare Advantage Plan back to Original Medicare.
- Switch from one Medicare Advantage Plan to another Medicare Advantage Plan.
- Switch from a Medicare Advantage Plan that doesn’t offer drug coverage to a Medicare Advantage Plan that does offer drug coverage.
- Switch from a Medicare Advantage Plan that offers drug coverage to a Medicare Advantage Plan that doesn’t offer drug coverage.
- Join a Medicare Prescription Drug Plan.
- Switch from one Medicare Prescription Drug Plan to another.
- Drop your Medicare prescription drug coverage completely.
- Do nothing. If you haven’t received an Annual Notice of Change (ANOC) in the mail that your current coverage is changing or ending and you’re happy with it, then you don’t have to take any action. You don’t have to re-enroll in or renew Medicare each year because your existing plan(s) will roll over automatically. The existing coverage will remain in effect as long as you continue paying any necessary premiums.
4. Medicare doesn’t cover all your medical costs.
It is a common misconception that Medicare covers all of a senior’s medical expenses. According to a recent AARP Public Policy Institute report, Medicare beneficiaries paid an average of $5,801 in out-of-pocket health care costs in 2017.
When deciding whether to add, change or drop Medicare plans, pay attention to the financial impact of each option. Calculate your total out-of-pocket healthcare expenses from the last year and compare it to other coverage options you’re considering. Be sure to factor in premiums, deductibles, co-pays and prescription drug costs. This takes time but is the best way to avoid unexpected outlays.
5. What happens if you miss the MOE deadline?
If you miss the deadline, you may have to wait until next year before you can make changes, or you risk paying penalties and higher premiums. Depending on what kind of coverage you have, you may be able to make changes outside of the MOE period.
One opportunity is the Medicare Advantage Open Enrollment Period (explained in the next section). Otherwise, you’ll have to experience a qualifying life event, such as moving to a new address or losing your current coverage to trigger a Special Enrollment Period (SEP), which permits coverage changes. The deadlines and actions you can take vary, depending on the special circumstance. You can find more information about SEPs on Medicare.gov.
6. If you don’t like your Medicare Advantage Plan, you can switch.
It used to be possible to get stuck with a Medicare Advantage Plan until the next year’s MOE period. Fortunately, Medicare altered their rules beginning in 2019, permitting seniors with Advantage Plans to make additional changes after the fall open enrollment period ends. The Medicare Advantage Open Enrollment Period only lasts from January 1 through March 31 each year. During this window, beneficiaries can only do two things:
- If you’re in a Medicare Advantage Plan (with or without drug coverage), you can switch to another Medicare Advantage Plan (with or without drug coverage).
- If you’re in a Medicare Advantage Plan, you can leave your plan and switch to Original Medicare. You also have the option to join a Part D Plan.
Changes made during this time are effective the first day of the following month.
7. Help is available.
If you don’t understand something about MOE or available coverage options, it’s crucial to ask for help. For more detailed information about Medicare, visit Medicare.gov or call 1-800-MEDICARE (1-800-633-4227).
Free one-on-one insurance counseling is also provided by State Health Insurance Assistance Programs (SHIPs). Contact your local Area Agency on Aging (AAA) for more information or to make an appointment. SHIP counselors know the ins and outs of Medicare coverage and can even help seniors find other benefits and resources that can help reduce health care costs.
Sources: Joining a Medicare Health or Drug Plan (https://www.medicare.gov/sign-up-change-plans/joining-a-health-or-drug-plan); Medicare Part A Costs (https://www.medicare.gov/your-medicare-costs/part-a-costs); Your Medicare Coverage Choices (https://www.medicare.gov/what-medicare-covers/your-medicare-coverage-choices); Medicare Beneficiaries’ Out-of-Pocket Spending for Health Care (https://www.aarp.org/content/dam/aarp/ppi/2020/06/medicare-beneficiaries-out-of-pocket-spending.doi.10.26419-2Fppi.00105.001.pdf)