5 Things to Know About Medicare Advantage Open Enrollment Period for Retirement

Medicare Advantage Open Enrollment is an essential period for anyone currently enrolled in Medicare Advantage plans or considering switching plans. This period, which runs annually from January 1 to March 31, provides an opportunity to reassess your healthcare coverage and make changes if necessary. To help you navigate this critical time, we’ve outlined five important aspects of the Medicare Advantage Open Enrollment Period (OEP). By the end of this article, you’ll have a clearer understanding of how this enrollment period works and how to make the best decisions for your healthcare needs.

1. What Is Medicare Advantage Open Enrollment?

The Medicare Advantage Open Enrollment Period allows beneficiaries currently enrolled in Medicare Advantage plans to make one change to their coverage. This change could include:

• Switching from one Medicare Advantage plan to another (with or without prescription drug coverage).
• Disenrolling from a Medicare Advantage plan and returning to Original Medicare (Parts A and B), with the option to enroll in a Medigap policy and a standalone Prescription Drug Plan (Part D).

This flexibility makes it easier for beneficiaries to address any issues they’ve encountered with their current plan, such as unexpected costs or network restrictions. Unlike the Medicare Annual Enrollment Period (October 15 to December 7), which is open to all Medicare beneficiaries, the OEP is limited to those already enrolled in Medicare Advantage plans.

To learn more, read the article “Medicare AEP in Retirement – 5 Things You Need to Know”.

2. Why Do People Switch Plans During OEP?

There are several common reasons why Medicare beneficiaries consider changing plans during the OEP:

• Prescription Drug Coverage Issues: Many beneficiaries discover in January that their plan’s formulary—the list of covered prescription drugs—does not align well with their medication needs. This mismatch can lead to higher out-of-pocket costs or difficulty accessing necessary medications.
• Network Limitations: Medicare Advantage plans often operate as either Health Maintenance Organizations (HMOs) or Preferred Provider Organizations (PPOs). HMOs generally have smaller networks, requiring members to see in-network providers. PPOs offer more flexibility, allowing for out-of-network care at higher costs. Beneficiaries dissatisfied with their current network may switch to a plan with a broader or more suitable provider network.
• Additional Benefits: Some Medicare Advantage plans offer extra benefits like dental, vision, hearing, or fitness programs. Beneficiaries seeking better or more comprehensive ancillary benefits may switch plans during this period.

To learn how to evaluate a Medicare Advantage plan’s network and benefits, read the article,“Understanding Medicare Advantage Open Enrollment in Retirement”.

3. Potential Pitfalls When Switching Plans

While the Medicare Advantage Open Enrollment Period provides valuable flexibility, there are pitfalls to avoid, particularly when switching back to Original Medicare:

• Medigap Underwriting: If you disenroll from a Medicare Advantage plan and return to Original Medicare, you’ll likely want to purchase a Medigap policy to cover out-of-pocket costs like copays and coinsurance. However, unless you’re in your initial six-month Medigap Open Enrollment Period or qualify for a special trial right, you may need to undergo medical underwriting to obtain a Medigap policy. This means your application could be denied based on your health.
• Gaps in Coverage: Without a Medigap policy, you’ll be responsible for covering significant out-of-pocket costs under Original Medicare. Ensure you have a strategy in place to cover these gaps before disenrolling from your Medicare Advantage plan.

To learn more about avoiding coverage gaps, read the article “Closing the Gap Strategies for Coping with Medicare’s Doughnut Hole”.

4. Key Considerations Before Making a Change

When deciding whether to make a change during the Medicare Advantage Open Enrollment Period, keep these factors in mind:

• Maximum Out-of-Pocket Costs (MOOP): Each Medicare Advantage plan has a MOOP limit, which is the maximum amount you’ll pay out of pocket for covered services during the year. High MOOP limits can significantly impact your budget, especially if you require extensive medical care. Review your plan’s MOOP and compare it to other available options.
• Coverage for Serious Illnesses: Medicare Advantage plans often include a 20% coinsurance clause for treatments like chemotherapy. Ensure you understand how your plan handles these costs and how they count toward your MOOP.
• Prescription Drug Coverage: Evaluate how your plan covers your medications and consider whether switching plans could lower your out-of-pocket costs for prescription drugs.

5. Tips for Navigating the OEP

Navigating the Medicare Advantage Open Enrollment Period can be overwhelming, but these tips can simplify the process:

• Review Your Current Plan: Start by understanding your current plan’s benefits, costs, and network restrictions. Identify any areas where your plan falls short.
• Compare Available Plans: Use Medicare’s Plan Finder tool or consult with a licensed Medicare advisor to compare plans in your area. Focus on coverage for prescription drugs, network access, and out-of-pocket costs.
• Consult a Professional: Medicare Advantage plans are complex, and working with a knowledgeable advisor can help you make an informed decision. Advisors can provide personalized recommendations based on your healthcare needs and financial situation.

Conclusion

The Medicare Advantage Open Enrollment Period is an important time for beneficiaries to reassess their healthcare coverage and adjust if needed. Whether you’re looking to switch plans, address prescription drug coverage issues, or transition back to Original Medicare, understanding the nuances of this period can help you make informed choices.

If you have any questions on Medicare, we’d like to speak with you. Schedule your complimentary 15 minute call with us and learn more about “5 Things to Know About Medicare Advantage Open Enrollment Period.”