Published originally on BestCompany.com:
Just when you started to think health insurance made sense, you became eligible for Medicare!
Medicare has its own processes, rules, and enrollment periods that can be tricky to understand at first.
“Medicare has several different enrollment periods, so it can be confusing to keep track of everything and remember which enrollment period is for what,” says Lindsay Engle, Elite Insurance Partners, LLC Marketing Manager.
The Medicare Annual Election Period (AEP), sometimes referred to as Medicare Open Enrollment or Annual Enrollment, is one of those periods. Because Medicare has several enrollment periods and more than one of them are sometimes called Open Enrollment, we’ll stick to Medicare Annual Election Period.
Here are five things you should know about the Medicare Annual Election Period:
- What is the Medicare Annual Election Period?
- Who does it apply to?
- What are the dates?
- What’s with the advertising?
- What do I need to do?
What is the Medicare Annual Election Period?
Over the years, you may have gotten used to the Open Enrollment Period for enrolling in health insurance every November. Medicare’s Annual Election Period (AEP) overlaps with those dates, so it may seem like it’s the same thing but for Medicare.
The short answer: It’s not.
“Many people mistakenly believe that the annual enrollment period following their 65th birthday is their first opportunity to enroll in Medicare. In reality, each enrollee gets their own Individual Enrollment Period (IEP) that begins three months before they turn 65,” says Kathryn Casna, Eligibility.com Medicare Specialist.
If the Medicare Annual Election Period isn’t for enrolling in a plan, what is it for?
The Medicare Annual Election Period gives you an opportunity to review and make changes to your current Medicare coverage:
- Switch between Original Medicare (Parts A and B) and a Medicare Advantage Plan (Part C).
- Change to a new Medicare Advantage Plan.
- Change your prescription drug coverage by switching to a new plan, dropping coverage, or enrolling in a plan for the first time.
“Medicare Annual Enrollment is a great time to review your Medicare plans’ coverage. If you have a Medicare Advantage plan or a Part D Prescription Drug Plan, it’s a good time to review your plan and re-enroll or enroll in another plan,” says Engle.
If you have a Medicare Advantage plan that offers qualifying prescription drug coverage, you do not need to enroll in Part D. If you do, you’ll be automatically disenrolled from your Medicare Advantage plan and enrolled in Original Medicare.
As you evaluate your prescription drug coverage, check the formulary (drug list) to make sure the medications you need are covered. This will help you decide if you need to enroll in a new plan or keep your old one.
Before opting out of prescription drug coverage, be aware that there is a late enrollment penalty if you are without creditable prescription drug coverage and enroll in a Part D plan later.
Who does it apply to?
While you can switch from Original Medicare to a Medicare Advantage plan during the Annual Election Period (AEP), the Annual Election Period primarily affects people with Part C (Medicare Advantage Plans) or Part D (Prescription Drug Plans).
“The first point of confusion is understanding that the Annual Election Period (often referred to as Medicare's Open Enrollment) only applies to Medicare Advantage plans (Part C) and Prescription Drug Plans (Part D). Medicare supplement policies can be applied for at any point during the year,” says Troy Baccus, Medicare Life Group owner.
The Annual Election Period does not apply to Medicare Supplement Plans (Medigap).
“While it is critical that they examine their Part D (drug) plan at this time every year, it is important that they understand that the Medigap, otherwise called Medicare Supplement plans, do not change and do not need to be changed during this time period. Each Medicare Supplement plan automatically renews on the policy anniversary and nothing can change with those policies,” says Christopher L. Westfall, Sr., from Senior Savings Network.
What are the dates?
The Medicare Annual Election Period (AEP) runs each year October 15th through December 7th. Keep these dates in mind, especially because they are different from health insurance Open Enrollment dates, even though the periods overlap.
“One of the most confusing parts of Medicare Annual Enrollment is that it doesn't line up with individual plan enrollment. Families and individuals signing up for Affordable Care Act (ACA) plans can enroll from November 1 through December 15, but the Medicare Annual Enrollment Period is from October 15 through December 7.
Don't get confused. If you try to enroll on December 10, your application will be denied and you might have to wait a whole year before you can enroll again (unless you're eligible for a Special Enrollment Period),” advises Anastasia Iliou, Medicare Plan Finder Senior Content Manager.
What’s with the advertising?
Health insurance companies do a lot of advertising during the Medicare Annual Election Period and during health insurance Open Enrollment. Because the dates overlap, you may feel like you’re being bombarded with health insurance ads.
The Medicare Annual Election Period is a money-making opportunity for Medicare providers. During this time, Medicare beneficiaries can enroll in a new plan and switch health insurance companies.
“I think the Open Enrollment Period (OEP) can be very confusing sometimes. There is so much advertising EVERYWHERE. It makes clients think that they have to change their plan or sign up for it again,” says Katherine Adams, founder of Creative Legacy Group.
Westfall agrees. Regarding Medigap plans, he points out, “One of the most confusing aspects of the Medicare Annual Election Period comes when the majority of Medicare beneficiaries, those on Medigap plans, are confused as to what they need to do during this time of year. As their plans are guaranteed renewable, never change, and are not affected in any way by the AEP time frame, confusion always abounds because of the intense media barrage.”
Don’t be confused by the ads. Make sure you understand your Medicare plans and how the Annual Election Period works. Review your current coverage to make sure that it will continue to meet your needs next year.
What do I need to do?
Now that you have a better understanding of what the Annual Election Period is, the next thing to figure out is what to do.
Melissa Negrin-Wiener, Cona Elder Law Partner, suggests taking these steps:
- “Read your Annual Notice of Change mailed to you every September informing you of any changes to your plan, such as changes in premiums, co-pays, pharmacies and prescription drug coverage.
- Review your coverage, costs, and doctors to determine if you should switch from traditional Medicare to a Medicare Advantage Plan.
- Review your medications and change your Part D plan if your prescriptions are no longer covered or your costs have increased.”
Following these steps if you have a Medicare Advantage or Prescription Drug Plan will help you ensure that your Medicare coverage will be sufficient for next year.
If you find that your coverage will meet your needs, do you need to actively re-enroll?
“Another point of confusion is believing action is needed if you're already enrolled in a plan. Unless your plan is being cancelled, you'll automatically be re-enrolled for next year. But that doesn't mean it isn't a good idea to review your options each AEP. It makes sense to have an independent agent guide you through the changes for 2020 to ensure you're current plan is your best fit next year,” advises Baccus.
Doing nothing during the Annual Enrollment Period does not mean that you won’t have coverage next year. However, if you want to be on the safe side, it doesn’t hurt to contact your health insurer to double-check your enrollment.