Are you about to turn 65 or have a newly-diagnosed disability that allows you to qualify for Medicare? Are you over 65, have your own insurance, but are considering switching to Medicare?
If so, there are a lot of options out there to consider, and a number of important choices for you to make about your health coverage? And there is a limited amount of time in which you can do so.
The type of Medicare plan you select determines the time of year you can make changes, or if you need to use the “Annual Election Period” (AEP), during which you can enroll in Medicare Advantage and Part D Plans. It can be difficult to know which plan to choose. The information below will help you make this determination so that you can be ready when AEP opens.
Medicare is a federally-run comprehensive health program. To be eligible for it, you must be 65 years old or have a qualifying disability or other health condition. About 16 percent of Medicare recipients fit into this latter category.
The Basic Medicare Program, or “Original Medicare,” has three different components. Medicare Part A comprises hospital admission, hospice care, and some home health coverage. Medicare Part B covers general doctor visits, lab work, and medical equipment. Part B also covers specialty drugs and treatment, like chemotherapy.
Medicare Part D is the prescription drug component of the program that was added in 2006. You must be enrolled in Medicare Part A and/or Part B to enroll in Part D.
With original Medicare, you can see almost any provider who accepts Medicare, which is about 95% of physicians and hospitals, and you most likely will not pay a premium for Parts A, but there is a monthly premium for Part B. Premiums will vary for Part D depending largely on the amount of medication you take.
Medicare Part C is also known as Medicare Advantage Plans. These are private health insurance plans administered by a company that has a contract with Medicare. To get one of these plans, you must be enrolled in both Medicare Part A and B.
Medicare Advantage, like other private health insurance plans, has a network of providers to choose from. You may not be able to see any doctor you want. Also, you will possibly pay a premium with Medicare Advantage, although many plans in 2020 do not have a monthly premium. However, unlike original Medicare, Medicare Advantage plans include things like vision, hearing, dental, and other specialty services.
Medicare Supplement, or Medigap, is an auxiliary insurance plan to original Medicare. It is a private health insurance policy that helps people cover out-of-pocket costs for original Medicare Parts A and B. It may cover all or some of your co-payments and has a fixed monthly premium.
If you are turning 65 and already receiving Social Security Income benefits (SSI), the federal government will automatically enroll you in Medicaid. You will receive information in the months leading up to your birthday.
If you are not receiving SSI and are turning 65 receiving SSA, you will need to enroll in Medicare. You can do so during the seven-month period that comprises the month you turn 65, and three months before and after that month. For instance, if you turn 65 on May 2, you can apply for Medicare anytime from February 1 through August 31.
Similar enrollment is available for someone who becomes disabled: based around the month that you start getting SSDI or disability benefits. (Note that there is a second initial open enrollment period for someone who has a disability, is already on Medicare, and who turns 65). During this time they are able to switch plans and may get a Supplement without underwriting.
Your Medicare coverage will begin at different times depending on when you apply. If you enroll anytime during the three months leading up to your birthday month, coverage will begin on the first day of your birth month.
Annual Election Period (AEP)
In addition to the initial enrollment period, each year there is an AEP during which you can switch your Medicare Advantage and Part D Plan. It lasts from October 15 to December 7. During this window you can:
- Enroll in either program
- Switch from Original Medicare to Medicare Advantage
- Switch from Medicare Advantage to Original Medicare
- Switch between Medicare Advantage plans
- Switch between Medicare Part D plans
- Drop a plan
- Change from a Medicare Advantage to a Medicare Supplement and Part D
Changes made during the AEP will go into effect at the beginning of the following year, starting January 1.
Also, each year from January 1 to March 31, you can switch between Medicare Advantage plans or drop Medicare Advantage and return to original Medicare. You cannot newly enroll in Medicare Advantage during this time. That can only be done during the AEP. This period is called the Open Enrollment Period.
If you are switching back to original Medicare from Medicare Advantage, you can apply for Part D prescription drug coverage from January 1st thru March 31st. If you drop a Medicare Advantage Plan you may be eligible for a Medicare Supplement Plan. You also may check to see if you live in an area that includes a “five-star” Medicare Part D or Medicare Advantage plan. You can shift to these plans any time, once per year
Note that there is only one exception to enrolling in Medicare during the AEP. This is called a Special Enrollment Period (SEP), which is based on a qualifying life event, like moving, marriage, divorce, or other circumstances that impact your health coverage. SEP standards are similar to those of the initial enrollment period.
Medicare Supplement Plans, or Medigap, have a unique enrollment standard. In short, you can enroll at any time, but there are big advantages to doing so when you first enroll in Original Medicare. During this time, you cannot be denied coverage. And you will most likely have more options and better prices.
Beyond this initial enrollment period, insurance companies providing Medigap can use medical underwriting to decide whether to accept an application and how much to charge.
Note that this initial enrollment window is for the first time you enroll in Medicare. It does not apply, for instance, if you are switching back to original Medicare from a Medicare Advantage plan, unless you are in your one year free look period. Although some states have laws that make it easier to switch to Medigap outside the open enrollment period, there are limited federal guaranteed-issue rights for Medigap plans.
Be Diligent in Selecting Coverage
Whether you are new to Medicare or are considering switching between plans, it is important to carefully look at all available options. Even if you are satisfied with the coverage you now have, it is always worth reviewing what plans are available to you each year during the AEP. As with purchasing any kind of insurance, ensure that the plan you select will meet your needs for the upcoming year.
Information about the upcoming year’s Medicare plans becomes available in October, at the beginning of the AEP. In addition to examining official government information about prospective plans, utilize online resources to help you navigate available options. Be sure to select reputable sources to be sure you are getting the best information and that your healthcare needs are met.