The 2011 Medicare open enrollment window is almost upon us. Otherwise known as the Annual Election Period or AEP for short, this period of time can be used by Medicare beneficiaries to switch insurance plans.
The dates are a little different this year as the window starts and ends early. AEP will run from October 15, 2011 to December 7, 2011. It is important however to remember what changes can and can’t be made during this window of time.
AEP is most commonly used to disenroll from a Medicare Advantage (MA) plan. Unless there are other extenuating circumstances, Advantage plans can only be cancelled during the yearly Annual Election Period. Most MA carriers will require a letter of disenrollment in writing from the insured; a phone call is not always accepted.
Upon disenrollment, a Medicare eligible person can enroll in a new Advantage plan that better suits their needs or return to Original Medicare. If the latter, then a Medicare supplement and/or prescription Part D drug plan might be purchased in order to fill the gaps in Original Medicare Parts A and B.
It is very important to note, that if someone has been in an Advantage plan for longer than one year, they may need to be medically underwritten in order to enroll in a traditional Medicare supplement insurance plan. This means that the applicant could be turned down if they are in poor health.
It is usually a good idea to get an application for traditional supplemental coverage in early to make sure that certain health qualifications can be met. Underwriting requirements will differ between various providers, so working with an independent Medicare supplement agency (like us) can be a wise choice to ensure coverage is obtained. This way Medicare eligible consumers can ensure a seamless transition to new coverage that will become effective January 1, 2012.
The Annual Election Period (open enrollment) also allows consumers to purchase a new Part D drug plan and drop their old coverage. This time period can also be used by consumers who did not purchase Part D coverage during their initial open enrollment window to find a plan.
For those who did not enroll when they were supposed to, there can be late enrollment penalties however. These penalties amount to a 1% per month addition for each month that coverage was not elected. For example, if someone (without credible coverage) waited 16 months to purchase a Part D plan, then their monthly premiums will be 16% higher than someone who enrolled on time.
Open enrollment allows those who have stand alone Part D drug plans to purchase more suitable (or less expensive) coverage if their current plan is no longer meeting their needs. If Medicare Advantage coverage that is coupled with a Part D plan (MAPD) is dropped, then a new Part D plan will likely need to be purchased as well.
For those who qualify either medically or through their open enrollment window, AEP can be used to purchase Medicare supplement coverage as well. If someone is dropping an Advantage plan, then most supplemental insurance providers will require a letter of disenrollment signed by the applicant. This same letter can then be sent off to the MA provider for processing.
One common misconception about AEP is that this period of time can be used to switch Medicare supplement providers without any medical underwriting. This is not the case. Consumers can switch supplemental insurance coverage any time of the year, but most companies will require some amount of underwriting. If a change is desired, there is no reason to wait until the end of the year to do so.
The only exception to this rule is for those who are dropping a Medicare Advantage plan after one year and re-enrolling back into Original Medicare. The Centers for Medicare and Medicaid Services allow for a one year Medicare Advantage trial period. If after one year the consumer is not satisfied, s/he can purchase most Medicare supplement insurance plans without the need for medical underwriting.
It is important to note that there are a couple of states that offer a yearly open enrollment window for changing Medicare supplement coverage without underwriting (Missouri and California for example), but these states have specific individual anniversary windows that will not necessarily coincide with the yearly Annual Election Period.
Hyers and Associates, Inc. is a full service, independent insurance agency offering Medicare insurance and Part D prescription drug policies direct to consumer in many states across the country.
Contact us today if you have questions or assistance with your Medicare coverage.