It’s that time of year again: Medicare Annual Enrollment Period. There are new commercials and ads popping up every day during these months where Medicare enrollment is possible. This can make enrolling far more confusing than it needs to be. The annual enrollment period spans from October 15th to December 7th.
During this time, Medicare beneficiaries are allowed to switch their Medicare Advantage plan or their Part D Prescription drug plan, if they want or need to. There are different reasons to change your plan, or at least look into changing these plans. One of the most important things to remember is that, if you have a Medicare supplement, this can be changed anytime during the year, and not just during open enrollment.
Medicare Supplements vs. Medicare Advantage plans
First, let’s talk about the difference between Medicare Advantage plans and Medicare supplements. These two are often confused but are actually very different in how they work. Medicare is made up of Parts A and B, which cover hospital and medical expenses. Part A is premium-free for most while Part B requires that the user pay a small deductible and 20% of the costs. While this does not seem like much, if you get a large medical bill, the out-of-pocket costs can really be detrimental.
This is where Medicare supplements come in; they help cover the 20% of costs in Part B. There are multiple Medicare supplement plan options to choose from, which are all standardized, making it easy to compare company offerings.
To repeat this, all Medicare supplement plans of the same letter are required to offer exactly the same benefits.
If one company has a G plan, any other company’s G plan is going to offer the exact same thing: the only difference is the price! So, make sure to shop around yearly for the best price.
About Medicare Advantage Plans
Medicare Advantage plans, also called Medicare Part C, require that the consumers receive their Medicare through private insurance companies. With Medicare Advantage plans, consumers are required, or at least heavily motivated by co-pays, to go to doctors in the plan network. They might also need referrals and may have to use network specialist.
There are low or no monthly premiums for Medicare Advantage after your Part B premium is paid to Medicare. There will still be co-pays, co-insurance, and deductibles. Medicare Advantage plans can also include coverage for dental and vision services that Medicare supplements do not cover.
Making the choice between a Medicare supplement and an advantage plan is a personal one; both can be great plans for the right person. Consumers must remember that you can change Medicare supplement plans throughout the year; Advantage plans can only be changed during annual enrollment. Advantage plans can vary from year to year and from location to locations, so make sure you call more than one company, or call a brokerage that works with multiple companies to get all of the information.
Part D Prescription Drug Plan
As mentioned above, there are two different routes you can take when getting Medicare coverage. Which route you take will determine if you need a Part D plan or not. Most Medicare Advantage plans are going to include drug coverage. Medicare supplement plans do not include drugs, which is where Part D plans come in. Drug plans differ from company to company; they are not standardized like the supplements we mentioned above. The type of drugs you are taking, how much they cost, and the pharmacy filling them can all affect the price of Part D plans. This is why it is important to shop around and review your plan each year–especially if your drugs change. The amount of the premiums will vary by income.
While a drug plan might not be needed when a beneficiary is first eligible, if users choose not to enroll, they will have to pay a late-enrollment penalty should they need to purchase it later, which will be added onto their premium forever. Drug plans can be relatively affordable to sign up for, so consider including Plan D coverage even if you are not currently taking any drugs. Make sure to consult professionals before signing up.
Important Information to Remember:
- You cannot have a Medicare supplement and an Advantage plan at the same time.
- If you are already in a Medicare Advantage Plan or a Part D plan and do not want to make any changes to your coverage, you do not need to do anything. It will be renewed as long as the plan is not being discontinued.
- October 15 – December 7 is the only time you can switch your advantage plan or drug plan except for a few special circumstances (seen here).
- You can switch your Medicare Supplement plan at any time!
Cardinal Advisors can provide you a complimentary rate quote for Medicare supplement plans under the Medicare tab on CardinalGuide.com or click here. We represent 30 companies and work in all 50 states and DC. Cardinal is available to help people look into their options for Medicare Advantage plans and Part D Drug plans. Make sure to call us soon so we can get you on our calendar!
Hans Scheil is the author of “The Complete Cardinal Guide to Planning for and Living in Retirement” and the accompanying workbook. He can be reached at Hans@CardinalGuide.com.