In many ways, having Medicare is simpler and more straightforward than dealing with traditional private health insurance plans. However, some aspects of Medicare can be confusing, especially when it comes to enrolling in a plan or making changes to your coverage. Most new enrollments and policy changes must take place during either an annual enrollment period or an open enrollment period. This guide walks you through the differences between the OEP and AEP for Medicare, including when each takes place and what changes you can make.
What Basic Medicare Terminology Do You Need To Know?
To understand the differences between the types of Medicare enrollment periods and the different actions you may take during each period, it helps to have a fundamental understanding of some key Medicare terminology.
Medicare Parts A and B
Everyone who enrolls for Medicare must initially sign up for Medicare Parts A and B. Medicare Part A generally covers treatment provided in skilled nursing facilities and hospitals. Medicare Part B covers most medical care, such as office visits, durable medical equipment, wellness exams, and some lab work. Together, Parts A and B are sometimes called “Original Medicare.”
Medicare Part D
There is no prescription drug coverage included in Original Medicare. Instead, you can customize your coverage level — and premium cost — by selecting a separate Medicare Part D plan. Part D plans are prescription drug insurance policies offered by private insurance companies.
Most Part D plans have rules about which drugs are covered, and these rules can change every year. Fortunately, if a rule change affects your medication, you can update your coverage as necessary during the AEP for Medicare. To sign up for a Medicare Part D policy, you must first enroll in Medicare Part A, Part B, or both.
After enrolling in Parts A and B, you also have the option to switch your coverage to a Medicare Advantage plan. Advantage policies, which are sometimes called “Part C” plans, are private insurance plans that conform to all of Medicare’s rules and requirements. These policies combine hospital, medical, and prescription insurance into a single plan.
Some Medicare Advantage plans cover dental and vision care, which are not covered under Original Medicare. Medicare Advantage plans also have more rules than Original Medicare; for example, you may have to use an in-network doctor or pharmacy. Like Medicare Part D, these rules can change each year. You don’t need a Part D policy if you have an Advantage plan.
Medicare supplemental insurance is also known as Medigap insurance. Medigap coverage is only available to people who are enrolled in Original Medicare, not people who are enrolled in Medicare Advantage. This type of coverage is offered by private insurance companies to help you pay for the out-of-pocket costs you incur through your Original Medicare policy. These costs include such things as premiums and copays.
What Is the AEP for Medicare?
The Medicare annual enrollment period, sometimes called the annual election period, is a 54-day period each year when Medicare beneficiaries may take certain actions regarding their Medicare policies.
Annual Notice of Change
About one month before the beginning of the AEP, your Medicare Advantage or Medicare Part D provider should mail you an Annual Notice of Change. The ANOC informs you of any upcoming changes to your current policy. Any changes listed in the ANOC will go into effect on January 1 of the following year. The ANOC must disclose any changes to:
- Benefits provided
- Cost of benefits or services
- Medical treatment provider network
- Coverage service area
- Preferred pharmacy network
When you receive your ANOC, you should review it carefully to see what is changing in your plan and what these changes will cost you. Always check to verify that your existing doctors and pharmacy will still be covered in the upcoming year, as well as any prescription drugs that you’re currently taking. If the upcoming plan changes negatively affect your coverage or costs, you can make changes during the AEP.
Available Actions During AEP for Medicare
The Medicare AEP runs from October 15 through December 7. Any changes you make during the AEP don’t go into effect until the first day of the following calendar year.
If you are enrolled in an Original Medicare plan, during this time you may:
- Switch your coverage from Original Medicare to a Medicare Advantage policy
- Cancel your existing Medicare Part D plan
- Enroll in a Part D policy if you don’t already have Part D coverage
- Change from one Part D plan to another Part D plan
If you are enrolled in a Medicare Advantage plan, during the AEP you may change from one Advantage policy to another Advantage policy or terminate your Advantage plan and switch back to Original Medicare. If you choose to switch from Medicare Advantage to Original Medicare during the AEP, you won’t be able to enroll in a Part D plan within the same AEP.
You can make as many changes as you like. Whichever policy choices you have made as of the close of the AEP will lock in as of January 1 of the new year.
What Is the OEP for Medicare?
Like the AEP for Medicare, the Open Enrollment Period is a fixed window of time during which Medicare enrollees can make certain changes to their coverage. The OEP is from January 1 through March 31 each year.
If you’re enrolled in Original Medicare as of January 1, then during the OEP you may enroll in a new Medigap policy or switch from one Medicap provider to another. If you’re enrolled in a Medicare Advantage plan as of January 1, then during the OEP, you may:
- Switch from one Advantage policy to another
- Change from Medicare Advantage to Original Medicare
- Enroll in a Medicare Part D prescription plan
- Sign up for Medigap coverage
Any changes made during the OEP take effect on the first day of the following month. You can only make changes one time during the OEP.
Find Your Best Medicare Options
Emerald Insurance Group has years of experience and in-depth knowledge of Medicare choices. Contact us to discuss your coverage today so you can make any necessary changes before the end of the upcoming AEP for Medicare.