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HEALTH INSURANCE INSIGHTS

Open enrollment, also known as Medicare Annual Enrollment or AEP, is the time of year when Medicare beneficiaries can make changes to their coverage.

The Medicare Annual Enrollment Period (AEP) has arrived, and millions of newly eligible Americans are now in the process of deciding which coverage options make the most sense for them going into 2023.

If you’re among the those currently enrolled in Medicare, don’t let this opportunity to change your coverages pass you by. Following is a breakdown of the Medicare program, some of the most important changes occurring in 2023 and what you need to know to switch your coverage.

What is the Medicare Annual Enrollment Period (AEP)?

Medicare Annual Enrollment is a period that runs through October 15 and December 7 each year. This is the time for eligible beneficiaries to make changes to their Medicare health plan and prescription drug coverage. These changes will go into effect on January 1 of the following year and will carry forward throughout that year.

Medicare beneficiaries don’t have to do anything during open enrollment if their current plan is being offered again and they’re satisfied with their coverage. Instead, coverage will automatically carry over into the next year.

That said, it’s still a good idea to see what other options are now available. Health insurance companies expand their Medicare Advantage options each year, so you may find a better plan for you this year.

KEY TAKEAWAYS
  • The annual Medicare open enrollment is October 15 to December 7.
  • There’s also a more limited Medicare Advantage open enrollment from January 1 to March 31 when members can switch Medicare Advantage plans or change to Original Medicare.
  • Medicare beneficiaries can also make changes to their coverage during a special enrollment period if they qualify.
  • Members can decide to keep the same plan if it’s still available.

When is Medicare Annual Enrollment?

For most people on Medicare, the term "open enrollment" refers to the period between October 15 and December 7, also known as the Annual Enrollment Period, when those enrolled in Medicare can change their coverage for the following year.

However, other enrollment periods apply to some people. For example, if you have never signed up for Medicare before, you have an initial Medicare enrollment period that starts three months before you turn 65 and ends three months after you turn 65.

You can also change plans during the more limited Medicare Advantage open enrollment from January 1 to March 31. People can only switch Medicare Advantage plans or more from Medicare Advantage to Original Medicare during that time.

Ways to enroll in Medicare and make changes to coverage
What is it?When is it?
Initial enrollmentWhen you first become eligible for Medicare at the age of 65From three months before your 65th birthday month to three months after that birthday
Medicare open enrollmentAnnual period when you can make changes to your Medicare coverageOctober 15 to December 7
Medicare Advantage open enrollmentAnnual period when you can either change Medicare Advantage plans or move to Original MedicareJanuary 1 to March 31
Special enrollment periodSpecial period when you can make changes to your Medicare coverage if you have a qualifying life event60 days from when you have a qualifying event

Parts of Medicare

Let’s quickly review the types of Medicare:

  • Part A -- Inpatient hospital care
  • Part B -- Physician services, outpatient care, lab work, X-rays and preventive services
  • Part C (Medicare Advantage) -- Medicare plans offered by private insurers; coverage includes inpatient, physician and often prescription drug coverage and supplemental benefits, such as vision and dental
  • Part D (prescription drugs) -- Prescription drug coverage for people with Original Medicare (Parts A and B)

Parts A and B are often called Original Medicare. If you have Original Medicare, you can pair it with Part D for prescription drug benefits. You can’t get Part D if you have Medicare Advantage.

The federal government offers Original Medicare. Private insurers provide Medicare Advantage plans.

How to change Medicare plans

If you’re enrolled in a Medicare Advantage plan and want to switch to a new plan, you can simply search for a plan and change to it during an open enrollment period.

On the other hand, if you’re enrolled in a Medicare Advantage plan and want to switch to Original Medicare, you can contact your current plan and let it know your desire to make the change, or call 1-800-MEDICARE.

If you have Original Medicare and want to switch to a Medicare Advantage plan, you can also do so at open enrollment. Just remember that Medicare Advantage plans typically have a prescription drug component. That means if you signed up for Medicare Part D to cover your medications, you may no longer need that coverage. So, call your plan to disenroll from it.

Medicare changes for 2023

Each year, Medicare and Medicare Advantage plans make changes to plans and offerings. Here’s what changed in 2022:

Original Medicare

Part B premiums for 2022 rose to $170.10 for individuals earning $91,000 or less and those filing jointly and earning $182,000 or less. Also, Part B premiums are higher for people with incomes above $91,000 for individuals and above $182,000 for married joint filers. In 2022, people who fell into these categories paid monthly premiums of between $238.10 and $578.30. Part B deductible in 2022 is $233.

Original Medicare often has higher premiums than Medicare Advantage plans. In fact, you’ll likely be able to find a Medicare Advantage option with no monthly premiums.

People with Original Medicare also can enroll in a Part D prescription drug benefit plan.

Medicare Advantage

Some 28 million people are enrolled in Medicare Advantage plans in 2022, according to healthcare consultancy The Chartis Group.

Those eligible for Special Needs Plans will have more choice, with the number of Medicare Advantage dual-eligible special needs plans rising to 1,156 in 2022, up from 975 in 2021.

There will be a greater percentage of plans offering special supplemental benefits for chronically ill people. Overall, the number of plans providing such benefits has risen from to 272 plans in 2022, up from 122 in 2017.

Several health insurers are also expanding into hundreds of new counties nationwide in 2022. Such insurers include UnitedHealth Group, Cigna, Humana and CVS Health’s Aetna.

How to qualify for a Medicare special enrollment period

There are times in life when you may qualify for a special enrollment period for both Medicare Advantage and Medicare Part D. A special enrollment period allows you to make changes to your Medicare coverage outside of open enrollment.

You may qualify for such a period if you:

  • Change where you live. Perhaps the new plan isn't available in your new community or you move back to the U.S. after living abroad.
  • Lose your current coverage. Maybe you lose eligibility for Medicaid coverage or are no longer covered by an employer.
  • Have a chance to get other coverage. Perhaps you now can enroll in drug coverage that is just as good as what Medicare offers, such as TRICARE or VA coverage.
  • Have a plan that changes its contract with Medicare. The government may sanction your plan for some transgression on the part of the plan or Medicare might not renew a contract with a plan.

There are other situations where you might qualify for a special enrollment period, which are detailed on the official Medicare website.

How to enroll in Medicare

If you receive Social Security benefits for at least four months before turning 65, you’re automatically enrolled in Medicare Part A when you become eligible for coverage at 65.

In addition, you’re enrolled in Medicare Part B, but it’s your decision as to whether or not to keep this part of your Medicare coverage. You can decide to delay signing up for Part B (and face potentially premium penalties when you later get Part B) or you can also choose a Medicare Advantage plan.

You also can enroll in Medicare by going to the Social Security website or calling Social Security at 1-800-772-1213. TTY users can call 1-800-325-0778. If you prefer, stop by your local Social Security office and sign up that way.

If you or your spouse worked for a railroad, you can enroll in Medicare by calling the Railroad Retirement Board at 1-877-772-5772.

Costs of Medicare in 2022

Premiums and out-of-pocket costs are vital when comparing Medicare plans. Here are the average premiums for Parts A-D:

Part A - Medicare Part A is usually free as long as you’ve been employed and paid the Medicare tax for at least 10 years. The 2023 Part A premium for those who aren't eligible for premium-free coverage hasn't been set yet. In 2022, it is between $274 and $499 for Part A, depending on how long you worked and paid Medicare taxes. Part A’s deductible in 2022 was $1,556 for each benefit period, which is when you’re admitted to a hospital or skilled nursing facility.

Part B - The Part B monthly premium for 2022 is $170.10 for individuals earning $91,000 or less and those filing jointly and earning $182,000 or less. Those with higher incomes pay higher monthly premiums. The deductible is $233 for 2022. Once you meet that deductible, you pay 20% of your Part B health care costs.

Part C (Medicare Advantage) - CMS projects that the average monthly Medicare Advantage premium will be around the 2022 average of $19 for 2023. Insurers have been decreasing the average premium, but you’ll want to compare plan deductibles. Those out-of-pocket costs can lead to hefty out-of-pocket costs.

Part D (drug plan) - The average monthly basic Part D premium for 2023 is projected to be approximately $33. Similar to Medicare Advantage, Part D premiums and deductibles vary.

When else can you change Medicare plans?

Open enrollment isn’t the only time you can switch Medicare plans. Other times are when you’re newly eligible or have experienced a life event that triggers a special enrollment period.

When you’re first eligible for Medicare, you have a seven-month span to sign up for coverage. That includes the three months before your qualifying birthday and the three months after that birth month.

However, once you have a plan, you can trigger a special enrollment period when:

  • You lose coverage (for instance, you get divorced or lose your job)
  • You move to another state
  • Your income changes
  • Your spouse dies

If those life events happen to you, you can contact Medicare about kicking off a special enrollment period. In that case, you’ll be able to make changes to your Medicare coverage or sign up for a new plan.

What should you do during Medicare Annual Enrollment?

Medicare Annual Enrollment, often referred to as AEP or Medicare open enrollment, is a great time to review your plan and figure out what you want from a health plan.

What to think about during Medicare during annual enrollment:

  • Have your plan needs changed?
  • Do you have a chronic illness that a Medicare Advantage plan targets?
  • Are you paying higher premiums than you need?
  • Is your plan’s deductible too high?
  • Is there a new plan offering that makes more sense for your situation?
  • Is there a better Part D drug plan? Does that Part D plan cover your mediations?
  • If you find a better plan, does your doctor and hospital accept it?
  • What’s the plan’s quality rating?

Visit Medicare.gov to get information about plans in your area or call 1-800-MEDICARE. You can also go to the Medicare Plan Finder to compare plans available for you.

Tips to get ready for Medicare Open Enrollment

As you prepare for open enrollment, consider your health care needs over the past year, and anticipate what your needs might be in 2023.

“Prepare yourself in advance with a list of services you use the most, doctors and hospitals that are important to you and any prescriptions that you take,” says Lisa Wright, principal consultant for community programs at BlueCross BlueShield of Tennessee.

If you’re thinking about enrolling in Medicare Advantage or finding a new plan, you should weigh three major factors before choosing a plan, Wright says.

  • Costs. Consider extra charges, such as copayments or coinsurance, and the cost of prescription medications. "It’s important to not only consider the monthly premium but also any other costs you might experience," Wright says.
  • A plan's coverage network. Make sure all your health care providers are included in the network. "Don’t forget to check your pharmacy to ensure it’s in the network," Wright says.
  • Any other extras. Many Medicare Advantage plans offer additional perks, such as dental, vision and hearing aid benefits. "Some plan offerings include meals following a hospital stay and even a free fitness membership," Wright says.

Check out the website of any insurer you are considering and look over the pharmacy network and provider network. Then, compare benefit designs.

Wright notes that BlueCross BlueShield of Tennessee offers education to Medicare recipients via in-person community meetings and enrollment events, as well as virtual meetings and educational sessions. Other providers offer similar help.

Frequently Asked Questions

When can people get information about next year’s Medicare plans?

Typically, information about the following year's plans is available in October, according to the U.S. Centers for Medicare & Medicaid Services. In recent years, some information about the following year's costs has been available in late September, while final costs are released in early November.

Where can people find Medicare plan information or compare plans?

The best place to look for Medicare plan information is the U.S. Centers for Medicare & Medicaid Services website. There, you will find information about both Original Medicare and Medicare Advantage coverage.

CMS has a webpage with a tool allowing you to compare Medicare Advantage plans and Medicare Part D prescription drug coverage.

CMS also has published a PDF that lets you compare and contrast the basic features of the five major types of Medicare Advantage plans. Finally, if you need a Medigap policy, CMS offers detailed information about this coverage on its website.

When can you sign up for Medicare supplement plans?

The federal government urges people to buy a Medicare supplement policy, or Medigap, during their six-month initial enrollment period if they’re interested in Medigap.

During this period – which begins the first month you have Medicare Part B and you are 65 or older – you’re guaranteed coverage, even if you have health issues. You also can get coverage at the most favorable rates.

Once your personal open enrollment period closes, you may be denied for a policy due to poor health or end up paying more for coverage.

However, you might be able to sign up for Medicare supplement insurance if you are eligible under a specific circumstance or guaranteed issue rights. Medicare outlines these situations on its website.

What happens if I miss Medicare Annual Enrollment for 2023?

If you miss the open enrollment period, you have to wait until the next period unless you have a qualifying life event that qualifies you for a special enrollment period.

Qualifying life events include moving, losing a spouse or getting divorced. If you have a qualifying life event, you have 60 days from the event to make changes to your Medicare coverage.

Otherwise, you have to wait until the next open enrollment.

If I enroll during the Medicare Advantage open enrollment period, when will my policy begin?

Medicare Advantage open enrollment runs from January 1 to March 31.

If you sign up for a plan or make changes to your coverage during that time, the new coverage starts on the first day of the following month.

When can I discontinue a Medicare Advantage plan?

You can disenroll from a Medicare Advantage plan at any time. Call the health insurance company and inform them of when you want to end coverage.

Sources:

  1. Medicare.gov. “Costs.” Accessed August 2022.
  2. Kaiser Family Foundation (KFF). “Medicare Advantage 2022 Spotlight: First Look.” Accessed August 2022.

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