I’d like to know more about the AEP. What advice or information should I know before I choose my benefits?
The AEP begins every year on October 15 and ends on December 7. This is why your mailbox, web browsers, and TV screens fill up with commercials and ads from insurance companies hoping to get you to buy or switch Medicare Advantage or Medicare Part D Prescription Drug Plans during this time period.
What Can I Do During the AEP?
The AEP is a time when you can change your Medicare Advantage plan or your Medicare Part D Prescription Drug Plan if you want. For instance, during the AEP, you can move from Original Medicare to Medicare Advantage or vice versa. You may also switch from one Medicare Advantage plan to another Medicare Advantage plan that may better suit your needs or your budget.
Can My Medicare Advantage Benefits Change?
Since Medicare Advantage insurance companies must submit their bids to Medicare annually, that means the benefits of your Medicare Advantage plan can change every year. They can get better than the prior year. They can get worse than the prior year. I can tell you from personal experience, it’s downright rare for a Medicare Advantage plan to have the exact same benefits every year. In fact, I’m not sure I can remember a time when I was designing Medicare Advantage plans during the bid process when a plan didn’t have benefit changes every year. Sometimes monthly premiums rise, too.
You’ve got to pay attention and read the plan documents you get on or around October 1 of every year. This plan document is called the Annual Notification of Change (acronym ANOC, pronounced A-knock), and it will have a section in it that compares the prior year’s coverage to the coverage changes in the new year.
Pay special attention to the following categories: Inpatient Hospitalization, your Primary Care and Specialist doctor’s copays, lab benefits, outpatient benefits, MOOP, and deductibles. MOOPs can go up, and they can go down. Lately, more and more insurance companies are introducing deductibles on medical and prescription drugs. Watch to see if your inpatient hospitalizations would make it more expensive for you to be admitted to the hospital. The same goes for lab, outpatient, and doctor’s copays.
Can Monthly Premiums Fluctuate with Medicare Annually?
The short answer is yes. I’ve seen $0 plans go to $40 from one year to the next. I’ve seen those $40 plans go to $50 the next year, then back down to $40 the following, then to $20 the next, then right back to $40. Some insurance companies do not put a priority on keeping their monthly premiums stable year-to-year, and some do.
Medicare Supplement plan monthly premiums usually have rate increases every year, and not always centered around the beginning or the end of the year. Often, it’s on your policy anniversary, which may not line up with Medicare’s AEP for Medicare Advantage and the Medicare Part D Prescription Drug Plan you have.
Will I Have Several Medicare Advantage Plan Choices?
Unfortunately, the Medicare Advantage insurance companies focus on areas with a lot of potential customers, which means they’re largely centered around metropolitan areas. As a result, Medicare Advantage plan offerings in rural counties can be drastically less—or even non-existent. In fact, according to the Kaiser Family Foundation, as of 2021, there are 82 counties in the United States (out of 3,006) where there are no Medicare Advantage plans available.
However, the opposite is true as certain areas of the country have over fifty Medicare Advantage plan options to choose from.
Can My Medicare Plan Get Canceled?
Technically, they can’t cancel you. But Medicare Advantage insurance companies can simply cancel the plan you’re on at the end of the year, leaving you to scramble to find a new one by the deadline. They do it all the time. Why would they do that? There are a lot of reasons, but the most common are: not enough people bought the plan, the plan is losing gobs of money, or they lost contracts with key doctors or hospitals in their PPO or HMO networks and can’t meet network adequacy requirements to be able to file their bids with Medicare for the next year.
If this happens to you, the Medicare insurance company will announce this somewhere on or after October 1, right around the Annual Election Period (AEP), by sending you a letter. Medicare also sends a letter to you.
How to Change Your Medicare Part D Drug Plan During the AEP
You have the option to switch from one Medicare Part D Prescription Drug Plan to another, or you may join or leave a Medicare Part D plan altogether if you make any of these changes during the AEP, your new coverage will take effect on the following January 1, and your old one will immediately be dropped with no gap in coverage.
If you don’t do anything or change anything, you just roll over and stay on the plan you have for the next year.
This does not apply to Medicare Supplement (Medigap) insurance. This period is only for changing Medicare Advantage Plans and Medicare Part D Prescription Drug Plans.
Many authors and journalists mistakenly call the AEP “Open Enrollment” or “Annual Open Enrollment.” It’s not. It’s the Annual Election Period. It bugs me that they get it wrong every year.
I hope this helps!
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Author Bio Matt Feret is the author of the Prepare for Social Security -The Insider’s Guide and the Prepare for Medicare – The Insider’s Guide book series and launched PrepareforSocialSecurity.com to help people get objective answers to questions about Social Security and Medicare. Matt is also the host of The Matt Feret Show. He has held leadership roles at numerous Fortune 500 Medicare health insurers in sales, marketing, operations, product development, and strategy for over two decades.