Next Up: Medicare Advantage Open Enrollment

With the annual Medicare open enrollment period ending Dec. 7, many clients likely adjusted their Medicare coverage for 2024. An upcoming open enrollment period may affect some clients: the annual Medicare Advantage open enrollment.

This open enrollment, just for those who are already enrolled in a Medicare Advantage plan, runs from Jan. 1 through March 31 each year. 

What Changes Can Be Made/?

During this open enrollment period, clients who are in a Medicare Advantage plan can:

• Switch to another Medicare Advantage plan (Part C).
• Move to original Medicare (Parts A and B).
• If they switch to original Medicare, enroll in a prescription drug plan (Part D).

Note that this open enrollment period applies only to those enrolled in a Medicare Advantage plan as of Jan. 1. Those enrolled in original Medicare cannot use this period to move to an Advantage plan; they must wait until the Medicare open enrollment period that will begin  Oct. 15. This period also cannot be used to make changes in drug plan coverage or a Medigap supplement for those enrolled in original Medicare.

Any changes made during this Medicare Advantage open enrollment period will be in effect for the remainder of 2024. The changes made during this period will be effective as of the first day of the next month. For example, a change made in February will become effective March 1.

Aside from any special situation that may apply during the year, clients will need to wait for the Medicare open enrollment period in October to make any changes in their existing Medicare coverage.

Reasons to Consider Changing Medicare Coverage

There may be a number of reasons for clients to consider changing their coverage from their current Medicare Advantage plan. These generally revolve around changes in coverage under their current plan or changes in their personal situation, including:

• Are their doctors or other providers still in the plan’s network/?
• Has a client’s health situation changed, requiring new or additional doctors and other providers who are not in the current plan’s network?
• Clients’ prescription drug needs have changed and some of the drugs they need are not covered by their existing plan.
• A client has moved or plans to spend more time in other parts of the country and the current plan’s coverage in these locations is limited.
• Plan costs have increased, including premiums, deductibles, copays, coinsurance and other costs.
• Do current plans offer additional benefits such as fitness programs, online pharmacy options, wellness programs and others? Are they happy with these options if offered? If not offered, do they want a plan that offers these types of additional benefits?

Switching to Another Medicare Advantage Plan

It’s important for clients to review their Medicare Advantage plans entering the new year. What, if anything, will be changing for 2024? This might include an increase in premiums or any number of changes in providers or coverage.

Additionally, clients might have enrolled in a Medicare Advantage plan during the annual Medicare open enrollment period that ended in December and have realized that they made a mistake. This might be in the plan they chose or it might entail a realization that original Medicare is the best choice for them. 

Switching to Original Medicare

Switching to original Medicare can be an option for clients on an Advantage plan in some cases. Original Medicare does not have any network or geographical restrictions. While not every doctor or provider will take only what Medicare pays, many do.

Unlike an Advantage plan, original Medicare does not offer coverage beyond Parts A and B. If clients do switch to original Medicare, they will need to procure prescription drug coverage under a Part D plan. Failure to do so in a timely fashion could result in a penalty that could be permanent.

Original Medicare users must demonstrate that they have creditable prescription drug coverage to avoid any penalties or surcharges. They may also want to consider a Medigap supplement plan as well to help cover deductibles, copays, coinsurance and other costs.

One issue with securing Medigap coverage could arise if a client has health issues. New Medicare enrollees cannot be denied this coverage during Medigap open enrollment, which is a period starting the first month they have Medicare Part B coverage and are age 65 or older and extends for six months. After that initial period, Medigap issuers can deny coverage or charge higher rates based on clients’ health situations. Note that some states have different versions of supplemental coverage.

Original Medicare does not offer coverage in a number of areas including vision, dental and hearing services. Many Advantage plans do offer this coverage, so if clients move to original Medicare from their Advantage plan, they should consider obtaining coverage for routine dental vision and other non-covered services. Note that original Medicare may cover some services in these areas if they are deemed to be medically necessary.

It may be feasible for clients to cover these costs out of pocket, or through a health savings account if they have one from their pre-Medicare days.

Enrollment Periods During the Year

In working with clients who are on or soon to be eligible for Medicare, it’s important to keep these various enrollment dates in mind.

• Initial enrollment period, Parts A and B. This period spans seven months including the three months before their 65th birthday, their birthday month and the three months after their birthday. The initial enrollment period is for those new to Medicare.
• Initial enrollment period for Part B if a client had other coverage after age 65, such as eligible coverage from an employer or a spouse’s employer. This period starts any time after the initial enrollment period ends, and clients have eight months after their group coverage or their employment ends to enroll in Part B without penalty.
• Medicare open enrollment goes from Oct. 15 through Dec. 7 each year.
• Medicare Advantage open enrollment runs from Jan. 1 through March 31 annually.
• Special enrollment periods vary and cover clients’ special situations. These might include relocating their residence, losing current coverage, changes in their Medicare Advantage plan that affect their coverage and a host of other scenarios. 

Medical costs can comprise a significant expense in retirement, and Medicare is an important benefit for this reason. Failure to enroll at the proper time can result in costly penalties. In some cases, these penalties are a permanent additional cost.