During Medicare open enrollment, you can join, switch or drop a Medicare health plan, prescription drug plan or Medicare Advantage Plan. This fall, the Medicare open enrollment period is from October 15 to December 7, with the coverage you choose beginning on January 1, 2023, as long as the plan receives your request by December 7, 2022.
With numerous Medicare options and plans available, narrowing down which types of Medicare coverage you need can be daunting. But once you understand Medicare coverage plans and how the Medicare open enrollment works, you can make informed Medicare coverage choices.
Why is Medicare Open Enrollment Important?
If you’re already enrolled in a Medicare plan during Medicare open enrollment, you can make changes to the plan you already have, such as adding Medicare Part B, a Medicare drug plan or a Medicare Advantage Plan. Or you can drop coverage during this period or change to a different Medicare Advantage Plan.
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If you turned 65 in 2022 but didn’t sign up for Medicare during your Initial Enrollment Period — the three months leading up to your 65th birthday, the birthday month and the three following months — you can still enroll in Medicare during the annual Medicare open enrollment period.
Before you enroll in Medicare or change your coverage, here’s what you need to know about Medicare open enrollment and how to prepare.
Find out: 5 Things to Know About 2020 Health Insurance Open Enrollment
Medicare Has Four Parts
To make the best coverage choices, you must first understand the different parts of Medicare and how each works:
- Original Medicare Part A covers inpatient hospital stays, short-term skilled nursing facility care, hospice care and some home health care. Most people won’t have to pay a premium for Medicare Part A. But Part A has a 2023 deductible of $1,600 for each benefit period.
- Medicare Part B is medical insurance that covers preventive services and other medically necessary services to diagnose or treat a medical condition. Part B also covers ambulance services, clinical research, mental health services, limited outpatient prescription drugs and eligible Durable Medical Equipment prescribed by a doctor.
For 2023, the standard Medicare Part B monthly premium for individuals with a modified adjusted gross income equal to or less $97,000 is $164.90, with an annual deductible of $226. Once you meet the Part B deductible, you’ must pay coinsurance of 20 percent of the Medicare-approved amount for services.
- Part C Medicare Advantage Plans include Medicare parts A, B and often Part D, which is the Medicare drug plan. Premium amounts Medicare Advantage Plans vary by region, and you must purchase the plan from a private insurance company. You can compare Medicare Advantage Plans on the Medicare Plan Finder.
- Part D prescription drug coverage helps cover the cost of prescription drugs. Medicare Part D is optional and available to anyone enrolled in Medicare. You can purchase a Part D plan through a private insurance company or as part of a Medicare Advantage Plan, which is a “bundled” plan that includes Part A, Part B and usually Part D.
Premiums for Part D vary by region. To shop for a Medicare Advantage Plan or Part D plan, visit the Medicare Plan Finder. Keep in mind that If you don’t sign up for Part D when you’re first eligible, you may have to pay a late enrollment penalty added to your Part D premium later.
Find out: How Medicare Part D Can Save You Big Bucks on Medications
You can change Medicare plan(s) only during special enrollment periods
You’re allowed to add or remove Medicare coverage only during certain designated enrollment periods:
- Your initial enrollment period when you first become eligible for Medicare
- Medicare Open Enrollment period: October 15 to December 7 each year
- Medicare Advantage Open Enrollment period: January 1 to March 31 each year
For example, if you already have a Medicare Advantage Plan and want to switch to another Medicare Advantage Plan, you can change plans during either the Medicare Open Enrollment in the fall or during the Medicare Advantage Open Enrollment period from January 1 to March 31.
If you want to switch from a current Medicare Advantage Plan back to Original Medicare and join a Medicare drug plan, you can also make that change during the Medicare Open Enrollment period in the fall or during the Medicare Advantage open enrollment period from January 1 to March 31.
Find out: Controlling Healthcare Costs That Can Lead to Debt
Medigap Has Its Own Open Enrollment Period
A Medicare supplement (Medigap) plan is a private insurance add-on that people enrolled in Original Medicare use to cover deductibles, copayments and coinsurance costs not paid by Medicare Part A and Part B. You’re allowed to purchase either a Medicare Advantage Plan or a Medigap plan, but not both.
You must have Medicare Part B to be eligible for a Medigap plan, which you purchase from a private insurer. The best time to purchase a Medigap plan is when you first enroll in Medicare, during your six-month Medigap Open Enrollment period.
To shop for a Medigap plan, enter your zip code in the Medicare Plan Finder for prices and coverage.
Find out: 5 Things That Can Cause You to Overpay on Medical Bills – and How to Avoid Them
How to Prepare for Medicare Open Enrollment
Keep an eye out for notices in the mail. If you’re enrolled in a Medicare plan, the plan will send a “Plan Annual Notice of Change” (ANOC) each fall, notifying you of any changes in coverage, cost or service areas.
Also review the 2023 “Medicare & You” handbook online or when you receive it in the mail for information about Medicare coverage. You may be able to find free help with choosing a Medicare plan at your State Health Insurance Assistance Program.
Then compare Medicare Advantage Plans, drug plans or Medigap plans on the Medicare Plan Finder to help you decide on the right one for you.
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6 Medicare open enrollment myths
Healthcare can be expensive for retirees, and not getting the insurance coverage you need to defray the costs could become one of your most costly retirement mistakes.
One of the best ways to ensure you don’t end up with a stack of medical bills you can’t afford is to shop for Medicare coverage each year during open enrollment.
Unfortunately, far too many people miss out on the chance to get the right policy because they fall victim to common myths about Medicare open enrollment.
In particular, here are six misconceptions you may have that could prevent you from getting the best and most affordable healthcare coverage.
Related: Recession checklist: 7 things you need to survive an economic downturn
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Far too many seniors believe there’s just one form of “Medicare” and there’s no real difference between the plans. But that simply isn’t true. In fact, you have two primary coverage options — and they can be very different.
Original Medicare is Medicare Parts A and B. It’s administered by the government, with Part A covering hospital insurance and Part B covering outpatient care (albeit with 20% coinsurance costs, so it pays for only 80% of covered services).
Medicare Advantage is an alternative to original Medicare, and your coverage comes from private insurers. Medicare Advantage Plans must provide the coverage that original Medicare does, but they can also provide additional benefits such as coverage for hearing aids or eye glasses (neither of which are covered by original Medicare). Most Advantage Plans also pay for prescriptions; original Medicare does not unless you also purchase a Medicare Part D plan.
The takeaway: You shouldn’t assume original Medicare is right for you without looking at what Advantage plans have to offer.
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If you already have a Medicare plan you’re happy with, you may assume you can just sit out open enrollment without making any changes. Sadly, that’s not necessarily the case.
Sometimes your plan’s features and benefits remain the same from year-to-year. But, in other cases, your plan may change dramatically — especially if you have an Advantage Plan. For example, your insurer may narrow their network of providers, so you’d have to switch doctors if you want your insurer to keep paying. Or your insurer may change what’s covered or start requiring a referral to see a specialist.
The takeaway: To make sure you don’t face any big surprises, always review your new plan documents carefully to see if any changes are being made for the upcoming coverage year.
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You may assume your Medicare costs will remain steady if you don’t make any changes to your plan during open enrollment — but, again, that’s not necessarily the case.
Original Medicare Part B premiums routinely increase from year to year. Although lawmakers have proposed holding premiums steady this year due to COVID-19, that hasn’t been signed into law. For those whose premiums are taken out of their Social Security checks, the good news is that your premiums can’t go up more than your Social Security Cost of Living Adjustment. But the bad news is, you could see most or all of any cost of living increase disappear due to rising Medicare costs.
If you have a Medicare Advantage plan, your premium can also rise. Unlike with original Medicare, there are no provisions to protect you from increased premiums on an Advantage plan.
The takeaway: Don’t assume your Medicare costs won’t change. Find out if your insurer is raising prices and make sure you’re still happy with the cost of your coverage.
Related: 5 Medicare Open Enrollment Scams
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If you’re operating under the misconception that there’s only one Medicare plan, you’ll be glad to hear that’s simply not the case. You can change from original Medicare to one of many different Medicare Advantage plans, if you choose to do so.
However, you can only make a modification during open enrollment, which runs from October 15 to December 7.
The takeaway: If you’re hoping to get better coverage or a cheaper policy, you should take action during this window of opportunity.
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Unfortunately, many seniors assume they have the flexibility to change Medicare plans whenever they feel the need. This isn’t true. If you miss the annual open enrollment period, you’re stuck with your coverage until the next year’s October-to-December period.
The rules are a little different for new signups because you don’t have to wait for open enrollment. If you’re entitled to Medicare coverage when you turn 65, there’s a seven-month window during which you can sign up for the policy of your choosing — starting from three months before the month you turn 65, during the month you turn 65, and for up to three months after the month you turn 65.
The takeaway: If you’re not a new enrollee to Medicare, it’s important to understand that the open enrollment period is the only time you can switch plans.
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Many people believe Medicare Advantage plans are too costly because they may have higher premiums than original Medicare. But you can’t judge the costs just by the monthly premiums — you have to consider your total expenditures on healthcare.
If you pick the right Medicare Advantage plan, it may cover much more than original Medicare. This would mean you may not incur some large out-of-pocket costs. For example, if your Medicare Advantage plan covers prescription drugs, you could avoid paying for your medicine or having to buy a Medicare Part D plan to secure drug coverage. And if your chosen Medicare Advantage plan has lower coinsurance costs, you may not need to get a Medigap policy to help defray some of the expenses you’re stuck with under Medicare Part B.
There is also a lot of variation across the Medicare Advantage plans, so you may find some with cheap premiums if you don’t need comprehensive coverage.
The takeaway: The best thing you can do is shop around and keep an open mind so you can find your best and most affordable Medicare plan option.
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You owe it to yourself to find out the facts about Medicare open enrollment so you can get the coverage you need. This upcoming open enrollment runs only from Oct. 15, 2020 through Dec. 7, 2020. If you miss the window to shop around for coverage, you have to wait a full year to get another chance.
To choose the best Medicare plan for you, there are a few key steps you’ll need to take including:
- Evaluate your care needs. Those who require more medical services may find it’s more cost-effective to pay higher premiums for a comprehensive Medicare Advantage plan.
- Review your current coverage. If you’re happy with your plan, you may want to keep it — but make sure you understand any changes to coverage or your premiums that may have occurred.
- Shop for Medicare Advantage plans. Look carefully at premiums and what each plan covers to determine if it is a good fit. Pay attention to the plan’s network, out-of-pocket expenses, and coverage during domestic and foreign travel.
Medicare open enrollment provides a once-annual opportunity to secure the most affordable insurance coverage for you. Don’t miss out on it because of misconceptions.
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