Table of Contents

I. The Basics of Medicare Advantage

Medicare Advantage is an alternative way for seniors to receive their Medicare benefits. Roughly one in three Medicare beneficiaries currently opts for Medicare Advantage, which replaces their inpatient and outpatient (Parts A and B) policies with a single unified plan. This plan often includes extra benefits, such as dental and vision care, as well as Part D prescription medication coverage. These plans have their own open enrollment periods and deadlines.

Medicare Advantage

Medicare Advantage is sometimes called Part C, though this can cause some confusion. Unlike Parts A, B, and D, Medicare Advantage is an umbrella policy you can purchase that covers all of your Parts A and B benefits, as well as extra services you can usually add to your policy. Medicare Advantage policies are issued by private insurance companies and are heavily regulated by the Social Security Administration, which pays most of the plans’ premium costs. As a result, all authorized Medicare Advantage plans must meet certain coverage minimums, and applicants cannot be charged extra or refused coverage because of a pre-existing condition. The exception to this rule is for beneficiaries who apply outside of the designated open enrollment periods, in which case normal insurance underwriting standards apply.

Part D

Part D is Original Medicare’s prescription medication plan. Seniors who are eligible for Medicare have a lot of choices for how they pay for their share of Part D benefits. Seniors who use Original Medicare often use their Medicare supplement, sometimes called a Medigap policy, to meet much of the coinsurance and out-of-pocket costs of their prescription medications. Medicare Advantage recipients don’t have that option, but many Medicare Advantage plans have at least some Part D coverage included.

II. How the Medicare Annual Enrollment Period (AEP) Works

The first chance you have to sign up for Medicare benefits is usually shortly before your 65th birthday. This is the Medicare general enrollment period, and it starts on the first day of the month three months before your birthday. The period ends on the last day of the month three months after you turn 65. Thus, if your 65th birthday is July 15, 2020, then your general enrollment period starts on April 1, 2020, and ends on October 31, 2020. During this time period, you are free to choose between Original Medicare and Medicare Advantage, as well as to decide on your Part D plan and your supplement, if any.

After you first sign up for Medicare, your benefits begin and remain constant as long as you don’t make any changes to your plans. If you do choose to modify your coverage, you can do it without penalty during the fall annual enrollment period. This period, also called the annual election period, starts each year on October 15 and ends on December 7. During this time, you can sign up for or switch between Original Medicare and Medicare Advantage without penalty.

It can be confusing, but this annual enrollment period is not the time to switch between Medicare Advantage plans. You can sign up for Medicare Advantage for the first time during an annual enrollment period in the fall, but to switch from one Advantage plan to another, you have to wait for the Medicare Advantage open enrollment period, which runs between January 1 and March 31 each year.

Note that there is a lag between the end of this window and the start of your benefit period. As a rule, beneficiaries who sign up for Medicare Advantage before March 31 see their benefits start on July 1 of that year. This can result in a coverage gap, which can be especially serious if you are transitioning between prescription medication plans. Ask your doctor or pharmacist about extending your supply of prescription medications to help you through the transitional period. Most doctors and pharmacists will do this on request to ensure you have your medication.

It is almost always a good idea to review your current Medicare coverage options just prior to the annual enrollment period. Even if you are currently satisfied with your coverage, there’s a chance you might find an alternative plan that better meets your needs. If you re-evaluate your options and decide you are still happy with your current Medicare coverage, you don’t need to take any action during the annual enrollment period. If you do nothing, your coverage continues as it did before with no gaps in or changes to your coverage.

III. FAQs

Can I change my Medicare plans at any other time?

Yes. Under certain circumstances, you might qualify for a special enrollment period, which allows you to enroll or to make changes to your Medicare benefits. A special enrollment period typically begins when something outside of your control happens to cause you to lose your non-Medicare group health insurance. The Social Security Administration recognizes several of these life events:

  • You lose group health coverage from your own or your spouse’s employment or your employment ends (Note that COBRA is not considered health insurance from employment and losing it does not trigger a special enrollment period.)
  • You return to the United States after volunteering overseas, where you could not sign up for Medicare coverage
  • Your initial enrollment period passed while you were institutionalized, incarcerated or otherwise unable to sign up for Medicare coverage
  • Your current benefits provider, including a Medicare Advantage provider, either discontinues your group plan, or you lose your Medicare coverage through no fault of your own, such as fraud or the bankruptcy of your insurer

Can I sign up for Medigap at the same time as Medicare Advantage?

No. Federal law does not permit a company to sell both types of plans to beneficiaries at the same time. If you hold a Medigap policy as a supplement to Original Medicare, you must surrender it within 30 days of switching over to Medicare Advantage. During this transitional month, you will be expected to pay both sets of premiums.

What can I do if I switch from Original Medicare to Medicare Advantage, and then I want to switch back? Do I have to wait for an open enrollment period?

No. Medicare law permits beneficiaries to “test drive” a Medicare Advantage plan for up to three months before your special enrollment period expires. This means that you are free to go back to Original Medicare without penalties if you decide not to keep your Medicare Advantage plan within the first 90 days. Note that you can only do this once, and, if you wish to change Medicare Advantage plans after signing up for your first one, you do have to wait until the Medicare Advantage open enrollment period starts in January.

I have Medicaid as a Medicare supplement. Are there time restrictions to that coverage as well?

As a rule, the low-income medical insurance policy known as Medicaid does not impose open enrollment periods like Medicare does. The program is jointly administered between the federal government and each of the 50 states, so there can be significant variations in how your local Medicaid program operates. Definitive answers about time limits and coverage options can only be provided to you by a Medicaid employee in your state.

How does the open enrollment period affect Medicare beneficiaries under 65?

Some Americans qualify for Medicare coverage before they reach age 65. This is most often because of a permanent disability that has lasted for at least 24 months prior to eligibility for Medicare, or it is because you have received a doctor’s referral to hospice care, which is always covered by Medicare Part A.

If you are eligible for Medicare because of disability or hospice referral, your initial enrollment period opens during your 24th month of continuous disability. This most often coincides with the 24th month in which you receive SSDI benefits. No matter your age when you reach this point, your eight-month open enrollment period starts then. After you enroll with Medicare for disability, your plan has the same open and special enrollment periods as any other Original Medicare or Medicare Advantage plan a senior over 65 has in effect.