Since late September, Medicare Advantage insurance companies have been literally spending millions, if not a combined trillions of dollars on advertising, trying to get you to switch plans. After all, it is the AEP (Annual Election Period). It’s the magical time of year when every Medicare beneficiary can make changes to their Medicare Advantage or Medicare Part D coverage.
If you’re happy with your plan, you probably ignore all the noise. The AEP ends on December 7 every year, and that’s when the advertising will disappear from your TV, your mailbox and your radio dial.
If you’re like most people, your ANOC or your EOC has been in the landfill for a while, or at least gathering dust on your countertop. I’m going to bet 90% of you haven’t read it, and won’t. That’s ok – it’s insurance paperwork. How exciting could it be? Like watching paint dry.
Here’s the thing: Medicare Advantage and Part D plans change – a lot – every year, effective on January 1. Premiums change. Benefits change. Copays change. If you haven’t read or at least scanned your paperwork, or your agent hasn’t reviewed the changes with you, there’s a chance you won’t know about the changes until after the AEP is over.
Picture this – you show up at your pharmacy window on January 2nd, and all of a sudden that $0 generic copay is now a $35 copay. Wait, what?
Or, you go to your primary care physician’s office in February – and the front desk tells you your copay went from $5 to $20!
Even worse – maybe your prescription or doctor isn’t even covered or in the network any more!
What can you do? Well, prior to this year – nothing. You would have been stuck in that plan for an entire year.
That is because, unlike most regular health insurance plans, there are only certain times of the year when you can enroll in your Medicare benefits. And oftentimes, if you miss certain deadlines, you could be penalized with having to pay a higher premium for your coverage.
There are a lot of different enrollment periods, but there are three main ones you need to keep in mind. While you may be aware that Medicare has an AEP, there’s also now an OEP! And yes, there’s a big difference between the two.
First, let’s back up a second. When you’re newly-eligible for Medicare, you get an IEP.
The Initial Enrollment Period (IEP) for Medicare occurs when you are initially eligible for Medicare coverage. This time frame lasts for a total of seven months, beginning three months prior to your 65th birthday, and including your birthday month, as well as the three months following your birthday.
If you sign up for Medicare Parts A and B at this time, you will typically have your Medicare Part B premium automatically deducted from your Social Security benefits each month. If you and / or your spouse worked and paid into the Medicare system, then it is likely that you will be able to receive Medicare Part A free of charge.
Then – every year after that, you get an AEP and an OEP!
During the Medicare Annual Enrollment Period (AEP) that you can also make certain changes to your coverage, such as switching from Original Medicare coverage to a Medicare Advantage plan, or vice versa.
Likewise, you can also change from one Medicare Advantage plan to another – and / or from one Medicare Part D prescription drug plan to another – during this same period of time.
Medicare Special Enrollment Period, or SEP
There are cases where individuals who are eligible for Medicare benefits could be allowed to enroll during a Special Enrollment Period, or SEP. You could qualify for a Medicare Special Enrollment Period if you and / or your spouse is currently working, and you are covered by either an employer-sponsored or a union-sponsored health insurance plan.
Once this coverage ends – either due to retirement, separation from service, or the termination of the plan – you will have up to two full months in which to enroll in your Medicare coverage. If this is the case, then you will not incur a late penalty for your Medicare Part B coverage.
The 2019 Medicare OEP starts January 1 and ends March 31. It is during the Open Enrollment Period you can switch from certain plans, to certain plans.
The OEP will be a one-time use election period, so you’re limited to just one change during the 3 month window. Policy effective dates will be first of the following month after you sign.
In addition to extending the time frame for choosing different Medicare benefit options, the Centers for Medicare and Medicaid Services estimates that these coming changes could result in an annual savings of roughly $295 million over the next five years (starting in the year 2019) to Medicare – and in turn, these savings can result in lower premium costs and / or additional benefits for Medicare Advantage and Medicare Part D enrollees. Where’s the proof of this? Can’t find it. Suffice to say insurance agents will welcome the additional time to get clients – new and old, in a product that meets their needs.
When it comes to Medicare benefits, there is a lot of information available – however, because there is so much, it can oftentimes make things even more confusing. Because of that, it can be beneficial to find out as much as you can about your potential benefits and costs, as well as the time periods in which you are allowed to apply and / or make changes to your coverage.
While there is a great deal of information that can be found on the Medicare website (www.Medicare.gov), it can also be helpful to discuss your specific questions and concerns with a local professional who specializes in Medicare plans and coverage.