People have different medical needs which may change over time depending on their conditions. Medicare allows its beneficiaries to make adjustment accordingly during the Annual Election Period or AEP, starting from October 15 to December 7 each year. During this period, you are allowed change or cancel your Medicare plans entirely. For those who did not sign up for Medicare plans when they become eligible during the Initial Enrollment Period, the AEP is the proper time window to do it, unless they are eligible for Special Election Period (SEP).
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About SEP – In case you missed the opportunity to sign up for Medicare plans because you (or your spouse) still had active employment status at age 65 and were also covered by employer’s health plan, there is an eight-month period of Medicare plans enrollment starting from the month after your job ends or when your previous health coverage does – whichever comes first. |
Types of Medicare Plans
Before we talk about what Medicare AEP is all about, first you must understand the types of Medicare plans. During the AEP period, you will have to decide whether to take, leave, or switch between the following coverage options:
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Plans |
Coverage |
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Medicare Part A |
Inpatient expenses |
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Medicare Part B |
Medically necessary outpatient services for examples physicians visit, nursing fees, diagnostics, x-rays, renal dialysis, vaccinations, blood transfusions, chemotherapy, and preventive treatments |
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Medicare Part C |
A combination of Part A and Part B, except hospice services |
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Medicare Part D |
Prescription drugs |
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Medigap |
Expenses that are not covered by Part A and Part B – Medigap is sold by private companies |
Medicare Part A and Part B are often referred to as Original Medicare, while Part C is often called Medicare Advantage.
What You Can Do During AEP
AEP provides time window to make some changes to your Medicare plans including but not limited to:
- Switch from Medicare Part A and B to Medicare Advantage
- Switch from Medicare Advantage to Medicare Part A and B
- Switching from one Medical Advantage plan to another
- Sign up for Medicare Part D, or drop the plan altogether. You are not allowed to re-enroll until the following year’s Open Enrollment Period
- If you already have Part D plan, you can switch to NEW prescription drugs coverage plan
- Depending on where you live, you can drop Medicare Part C and purchase Medigap
Changes you make during AEP will go into effect January 1 of the following year.
Why You Need to Understand AEP
If selecting the initial Medicare plans is already a daunting task for many seniors, changing the plans during AEP is even more difficult. In the past, most seniors were enrolled in simpler traditional versions of Medicare with which the most common addition option was to purchase or discard Medigap coverage. Medicare has undergone comprehensive transformations in recent years to include more options including Medicare Advantage and Prescription Drugs Coverage. Let us not forget that the Medicare Advantage alone comes in many different versions. With a lot of options and plans to review, Medicare beneficiaries often have difficulties deciding which plans to take or leave. Comparing and selecting the right plans often involve meticulous research online.
For examples if you choose Original Medicare, you probably have to select stand-alone prescription drug coverage. There is also a possibility that you need Medigap in case you are not a beneficiary of retiree health plan to help cover medical expenses. If you choose Medicare Advantage, you are provided with even more options with different networks, providers, premiums, and benefits. Things get more complicated because each plan may change premiums and benefits too.
While it is actually a good thing that you can change coverage plans, many times you don’t get enough information on how to do it properly. At the same time, having too much information does not help either; due to the high volume of information received from newspapers, Internet, TV, and perhaps mails, many people have problems with organizing the materials to help them determine which plans are best. The “Medicare Compare” tool from the official U.S. government site for Medicare is over-simplistic yet too complicated for others. Medicare beneficiaries need assistance to understand the options during AEP, what to do during the period, and how to register the changes. Otherwise some of them may not take advantage of the opportunity at all despite the changes in their medical needs.
What to Do During AEP
Remember that the purpose of AEP is to allow beneficiaries to change their Medicare plans in accordance to their most recent medical necessities and conditions. As daunting as it may seem, you must compare between plans, their costs, and benefits. Here are some basic suggestions:
- Do simple online research: instead of relying on information traffic that comes to you through mails, radio, or TV, doing an online research allows you to control how much information you get, what kind of information you need, and who provides the information for you. Only read reputable websites or publications for examples those owned and run by the government.
- Check your medications: assuming you are on medications, consult your physicians if there will be changes in the immediate future. Based on the information given by the physicians, check if your medications are on the list of Medicare-covered drugs. Put in mind that some plans have limitations, so coordination with your doctors is of the utmost importance.
- Check doctors’ affiliations: make sure your doctors are in the same network as your Medicare plans otherwise you may see differences in cost. If your doctor is not in the network, you must choose a different plan or a different doctor unless you are willing to pay higher cost-sharing responsibilities.
AEP gives about 7-weeks time period for you to make the necessary changes. It should be enough time to do your research, consult health care providers, and collect the right information about types of plans. Pay attention to healthcare providers’ networks and the eligibility requirements for the coverage you need. If necessary, get help from trusted friends or families to compare all the available plans and make the best decisions.