Comparing plans online

With so many different advertisements and brochures you might be getting, you’re probably wondering the same thing.

Medicare has several enrollment periods throughout the year. During these different times, you can make certain changes to your Advantage plans or Part D Drug plans, depending on which enrollment period you’re in. Remember, missing an enrollment period means you’ll have to wait until the next one to make any changes to your coverage. The most popular enrollment period is between October 15th-December 7th known as the Annual Enrollment Period (AEP for short).

Understanding enrollment periods will help you know what changes you can make and when while being on Medicare. Today we will talk about different enrollment periods and what you can do during that time.

Keep reading to learn more.

Annual Election Period (AEP)

The Annual Election Period (AEP) occurs each year between October 15th and December 7th. Read more details about AEP here.

There are several things you can do during the Annual Election Period:

  • Make changes to your Part D prescription drug plan
  • Enroll in a Part D prescription drug plan for the first time
  • Switch from an Advantage plan to Original Medicare 
  • Go from Original Medicare to an Advantage plan
  • Switch from one Advantage plan to another

We will talk about each of these in a bit more detail below.

Making Changes to Part D

Part D plans are plans you purchase from Medicare-approved private insurance companies that help cover the cost of your prescription medications.

We talked about Part D in more detail in another post, which you can read here.

When you enroll in a Part D plan, the coverage runs from January 1st-December 31st.

During the Annual Election Period, you can make changes to your drug coverage by switching companies or switching plans within the same company.

Some people may choose to do this if the monthly premium on their current plan increases or if there is a change in their prescription medication needs, and a different plan will cover certain drugs better.

Companies change their formularies every year around this time, allowing you the opportunity to keep the new benefits or move to a different plan.

If you enroll in a new drug plan during the Annual Election Period, the coverage starts January 1st of the coming year.

If you do not enroll in a new drug plan, you will be automatically re-enrolled into your current plan, and there is nothing you need to do.

Some companies drop beneficiaries during this time.

If this happens to you, they give plenty of notice for you to make the appropriate changes.

The best advice I give my clients is to talk to their agent EVERY SINGLE YEAR. This way, you’ll be certain you’ll have the best coverage for the following year.

If you don’t have an agent, read this article that explains the best way to find one.

Enrolling in Part D

If you did not enroll in a Part D drug plan when you were initially eligible, you could enroll in one during the Annual Election Period.

Medicare will likely charge you a late enrollment penalty.

The penalty is how many months you went without Part D drug coverage while you were eligible and did not have any other drug coverage.

It is 1% of the average monthly premium of a Part D drug plan, which is around $43.07 (in 2021), making the penalty approximately $0.44. The late enrollment penalty is added to your Part D plan’s monthly premium indefinitely.

For Example:

You went without 24 Months and you apply this year. Multiply 24 by $0.44. The penalty is $10.56. You then add this to your monthly premium to the plan you chose this year. When you change plans, the penalty carries over.

24 (months without coverage) X $0.44 (10% of the average price) = $10.56

The average premium changes from year to year and Medicare updates this on their website.

If your financial situation changes and you find yourself struggling to afford the cost of the plans, you can apply for extra help with the premiums. Read more about that here.

When you apply for coverage during the AEP, it begins on January 1st.

Changing From an Advantage Plan to Original Medicare

Advantage plans are sold by private insurance companies that are approved by Medicare. They replace the coverage for all your Part A hospital and Part B medical services with their own set of benefits.

Advantage plans help minimize their out-of-pocket expenses on Medicare. Read about them here.

When you have an Advantage plan, it replaces Original Medicare Part A and Part B, meaning the Advantage plan becomes your primary insurance instead of Original Medicare.

During the Annual Election Period, you have the option to drop your Advantage plan and go back to Original Medicare.

You can also buy a Medicare Supplement.

Getting a Medicare Supplement During AEP

You can purchase Supplement Plans from Medicare-approved private insurance companies in addition to Part A and Part B to help minimize your out-of-pocket expenses on Medicare.

Medicare supplements are different from Advantage plans in several ways:

  • Supplement plans allow you to see any provider nationwide as long as they accept Medicare.
  • Advantage plans have a network of providers, and you can have much higher out-of-pocket if you go out of network.
  • Supplements have higher monthly premiums but lower out-of-pocket expenses.
  • Advantage plans have little to no monthly premiums but usually very high out-of-pocket.

Many people with Advantage plans decide that they would like to go back to Original Medicare with a supplement because they have more freedom regarding their choice of doctors and less out-of-pocket when they do need to use their coverage.

When you switch from an Advantage plan to Original Medicare during AEP this would be the time to apply for a Medicare Supplement.

Remember, Supplements are completely optional. Learn more detail about different Medicare Supplements here.

What Happens When Applying for a Supplement?

You will be subject to medical underwriting.

Most people believe that you can get a Medicare Supplement whenever you want, as long as you do it during AEP, regardless of your health. This is not true.

Only a small number of states have special rules if you want to switch plans Medicare Supplement Plans regardless of your health. You can read about them here.

This means your application will include a health questionnaire, and the insurance company may look into your medical and prescription history.

The company will either approve or decline your application based on its findings.

If you’re applying during AEP to come off an Advantage plan, the Supplement will begin on January 1st of the coming year if your application is approved. 

It is important to note that you will also need to enroll in a Part D plan once your Supplement coverage is approved.

Remember to NOT drop your Advantage coverage until you hear from the Supplement company that you’ve been approved.

Most Advantage plans include Part D coverage.

Supplements do not.

You’ll need a separate drug plan.

You can apply during AEP for Part D coverage also

Enrolling in a Part D plan will automatically take you off your current Advantage plan on January 1st. Make sure to apply only after your Supplement is approved. 

If you don’t hear the Supplement Plan before AEP is over, you’ll be able to apply for a drug plan during MA-OEP that runs from January 1st – March 31st.

Keep reading to learn about MA-OEP.

Changing From Original Medicare to an Advantage Plan

During the AEP, you can also change from Original Medicare to a Medicare Advantage plan.

If you have a Supplement with your Medicare and feel that monthly premiums are not in your budget you can make the change during AEP.

You do not have to wait until AEP to drop your Supplement, but you won’t be able to apply for an Advantage plan until October 15th.

You can enroll in any Advantage plan available to you in your area and are never subject to medical underwriting.

The Advantage coverage begins January 1st and will likely include prescription drug coverage.

You’ll need to contact the insurance company you purchased your Supplement through and let them know that you are canceling your coverage as of January 1st.

It is important to note that if you decide later to go back to Original Medicare and will want to get a Supplement, you can only do so during the Annual Election Period. As we said above, though, you’ll need to pass medical underwriting.

Changing From One Advantage Plan to Another

If you would like to switch from your Advantage plan to another Advantage plan, you can do so during the Annual Election Period.

There are several reasons that someone would want to switch from one Advantage plan to another:

  • Your preferred provider is in another plan’s network and is no longer in your current plan’s network
  • Services you receive regularly are covered better on a different plan
  • Your drugs are covered better on a different plan
  • Your current plan will no longer be available for the coming year

If you enroll in a different Advantage plan during the Annual Election Period, your new plan begins on January 1st of the coming year, and your current plan ends.

If your current Advantage plan is available next year, and you want to keep it, you’ll simply be automatically re-enrolled. There is nothing you need to do.

Medicare Advantage-Open Enrollment Period (MA-OEP)

The Medicare Advantage Open Enrollment Period (MA-OEP) occurs each year between January 1st and March 31st.

During the Medicare Advantage Open Enrollment Period, people who already have an Advantage plan can:

  • Switch from one Advantage plan to another
  • Switch from an Advantage plan to Original Medicare and get a Part D drug plan

As I mentioned above, this is the time to make any final changes to your coverage for the year. If you are not happy with your decision during AEP or you missed the December 7th deadline, MA-OEP is when you can make these changes.

If you switch from one Advantage plan to another, your coverage begins the first of the following month.

Drug coverage also starts the first of the following month if you switch from an Advantage plan to Original Medicare and get a drug plan during MA-OEP.

If you are wanting a Supplement at this time then you’ll be subject to the medical underwriting described above.

Once your application for a Supplement is approved, you’ll need a Part D prescription drug plan. As we talked about before, Supplement plans do not include prescription coverage.

You can make your Supplement effective the first of the following month to coincide with your drug benefits.

Any Advantage plan or Part D drug plan you enroll in during the Medicare Advantage Open Enrollment Period will be your coverage for the remainder of the year.

If you wish to switch Advantage or Part D coverage after MA-OEP, you’ll need to wait until AEP in the fall. 

General Enrollment Period (GEP)

The General Enrollment Period (GEP) occurs each year from January 1st through March 31st.

Do not get this confused with MA-OEP.

GEP is for those who did not apply more Medicare when they were first eligible.

During this period, you can enroll in Medicare Part A and Part B.

If you did not enroll in Medicare because you’re still working, you would have an entirely different Special Enrollment Period (SEP), not GEP.

Don’t worry if you missed your initial opportunity to enroll, you can apply for Original Medicare between the dates mentioned above (Jan 1st – March 31st).

The coverage starts July 1st.

If you did not enroll in Part B when you were first eligible, Medicare would likely charge you a late enrollment penalty.

The Part B late enrollment penalty is 10% of the Part B monthly premium.

Part A enrollment period is 2x the time you went without. So if you didn’t have it for 2 years, the penalty lasts 4 years. The amount of the penalty is 10% higher.

If you are still working, your rules are very different and you’ll have an entirely different enrollment period. Read about them here.

For Example:

You are eligible for Part A but decide not to sign up for 2 Years. The penalty is 10% of the premium. That penalty will last for four years. 

The Part B late enrollment penalty is 10% of the Part B monthly premium for each 12-month period you were eligible for Part B coverage but went without it.

This penalty is added to your Part B monthly premium indefinitely.

So if you went without for 2.5 years, the penalty is 20% of your monthly Part B cost. This amount is tacked on to your Part B price for as long as you have Medicare.

It is important to note that Social Security enrolls most people in premium-free Part A automatically when they turn 65.

Remember, if you enroll in Part A or Part B during the General Enrollment Period, your coverage will begin on July 1st.

Initial Enrollment Period (IEP)

This is when you are first eligible for Medicare when you turn 65. You’ll have a 7-month window to apply for Medicare. It starts 3 months before your birthday, includes your entire birth month, and lasts 3 months after your birth month.

If you apply for Medicare when you first turn 65 you can:

  • Apply for a Supplement with no health questions,
  • Enroll in a Drug Plan
  • Get a Medicare Advantage plan

If you are still working, chances are, you won’t need to apply for Medicare just yet. To learn more, click here.

Open Enrollment Period (OE)

You are in Open Enrollment if you are turning 65 (see IEP above), are new to Medicare Disability, or are retiring from a job.

Open enrollment is the same as IEP above except if you are new to Medicare because you are retiring from a job.

If you are retiring, you have 2 months before you retire and 6 months after to enroll in Medicare.

Special Enrollment Period (SEP)

A Special Enrollment Period is for those who are losing coverage from work, their Medicare Advantage plan, or their Medicare Supplement.

If you lose your health benefits while being Medicare eligible, you’ll have 2 months before you lose coverage and 2 months after to apply for new benefits.

In the case you find yourself losing your coverage, you’ll be able to get a new plan of your choosing without health underwriting. This includes Supplements, Drug plans, and Advantage plans

Summary

Several enrollment periods allow you to sign up for or make changes to your Medicare and other Medicare-related coverage throughout the year.

During the Annual Election Period (AEP) that runs from October 15th through December 7th of each year, you can enroll in or make changes to Part D plans and go to or from Orignal Medicare.

During the Medicare Advantage Open Enrollment Period from January 1st through March 31st, people with Advantage plans can switch back to Original Medicare, get a drug plan, or switch to another Advantage plan.

In the General Enrollment Period from January 1st through March 31st, people who did not sign up for Part A or Part B when they were initially eligible to do so have an opportunity to enroll. Medicare will likely charge a late enrollment penalty.

It is essential to know when these enrollment periods are and what you can do during each of them to avoid missing an opportunity to enroll in or make changes to Medicare or any additional coverage.

If you have any questions, use the search tool at the top of this page or on the home page.

Or, if you would like further detail on any of the topics we discussed, please fill out a contact form and submit your questions.

If you prefer to speak by phone, call us at 888-209-5049.