The 2012 Medicare Annual Election Period begins on October 15th and ends on December 7th. Medicare beneficiaries who wish to make changes to their 2013 insurance coverage will need to do so during this open enrollment period.
To be clear, this period of time should be referred to as AEP (which is short for the Annual Election Period) but many erroneously call it “open enrollment.” Technically, that is not correct as there are limitations to the changes that can be made during the AEP window.
Medicare open enrollment is different for everybody and only happens once in your lifetime – usually at age 65. Open enrollment occurs when you are first enrolled in Medicare Parts A and B.
During your 6-7 month open enrollment, you can purchase any private Medicare insurance product you want without medical underwriting. Insurance products that are purchased at this time include Medicare supplements, Medicare Advantage plans, and prescription Part D coverage.
On the other hand, the yearly Annual Election Period is more restrictive and can be used to enroll/disenroll from Medicare Advantage coverage and prescription Part D drug plans. You cannot use the annual AEP window to change Medicare supplement plans without undergoing any medical underwriting. More on that below.
During AEP, you can disenroll from your Medicare Advantage plan and select a new MA plan that is available in your service area. Or you can disenroll from your MA plan and rejoin Original Medicare Parts A and B provided by the federal government. Should you rejoin Original Medicare, you can also purchase a Part D drug plan.
When returning to Original Medicare Parts A and B, you can only purchase a Medicare supplement without medical underwriting if you have been in your Advantage plan for one year or less. Medical underwriting for supplement plans will vary amongst the various carriers, but the Medicare rule-makers (CMS) only grant a one year free look trial period for MA enrollees.
This simply means that if you have been in your Advantage plan for more than one year and then disenroll during AEP to rejoin Original Medicare with the government, you may have to answer some medical questions in order to purchase a Medicare supplement – like Plan F for instance.
There will be no medical underwriting needed to purchase a prescription Part D plan however. All plans will accept all applicants so long as you live in the Part D plan service area.
You can disenroll from your prescription drug Part D plan and enroll in a new one that may better suit your needs. So long as your Part D plan was purchased on a stand-alone basis and is not combined with a Medicare Advantage plan, you can choose any new plan you wish – no questions asked.
You can also enroll for the first time in a Part D plan during AEP if you did not enroll during your open enrollment window when you first became eligible for Medicare Part B. If you do not have credible drug coverage, you may be subject to the Part D late enrollment penalty. This penalty is calculated by adding 1% to your premium for each month you were not enrolled and should have been.
If you went without coverage for 11 months for example, then your monthly premiums would be 11% higher than someone who enrolled during their open enrollment window. The Part D penalty does not diminish over time or disappear the following year. It will be added to your monthly premiums forever.
Many consumers use the AEP window to shop for less expensive Medicare supplement insurance policies. Considering that Medicare supplements are standardized, this is not a bad idea.
It is important to know, in most cases, there are no rules or regulations that eliminate the need for medical underwriting when switching Medicare supplement coverage during the yearly Annual Election Period.
Put another way, there is no advantage to waiting for the yearly AEP to shop for new supplemental insurance plans – like Plan F, G, or N for instance. The underwriting requirements will be the same regardless of the time of the year.
If you are unhappy with your Medicare supplement for some reason, then you can shop for new coverage anytime you want. You will likely need to undergo some amount of medical underwriting to prove insurability however. There are very few free passes when it comes to changing supplements.
I tell everyone to do themselves a favor and work with a knowledgeable agent (like one of ours) so that you know your options before, during, and after your open enrollment or the yearly AEP window.
It does not cost you anymore whatsoever to work with an agent!!! Prices are controlled by law and regardless of where and how you choose to purchase any of your Medicare insurance policies, the prices for the same coverage will not differ between sources.
There is a lot of misinformation out there when it comes to Medicare, so work with the experts. Too many seniors make mistakes and find themselves paying penalties and/or purchasing unsuitable coverage. It is wise and prudent to talk with someone at an agency like ours about all of your options before making any decisions.
We are an independent insurance agency specializing in Medicare insurance policies. We offer Medicare supplements, Advantage plans, and prescriptions Part D policies.
Contact us today to discuss your personal needs.