Medicare Annual Election Period - Avoid Making Mistakes!

For the past few years, this blog has benefited from the wisdom of our Medicare expert, Danielle Kunkle Roberts.  She is the founder of Boomer Benefits and her company provides Medicare assistance to senior citizens in nearly every state.  Her contact information is always available in the side bar of this blog.  This month, she has written a helpful post which explains the most common mistakes people make during the Medicare Annual Election Period.

 If you are concerned about avoiding other potential Medicare mistakes, you will also want to read her new book "10 Costly Medicare Mistakes You Can't Afford to Make." (Ad)  It is full of excellent tips which everyone should know about before applying for Medicare.

Mistakes to Avoid During the AEP

by Danielle Kunkle Roberts

Medicare has several different enrollment periods. Some happen only once in your life, while others happen annually. The Annual Election Period (AEP), also called the Fall Open Enrollment Period, occurs every year from October 15^th until December 7^th.

The Annual Election Period (AEP) is for people who are already enrolled in Medicare, so if you are new to Medicare, the AEP will not pertain to you. During the AEP, you can enroll in, change, or drop a Medicare Advantage plan or Part D plan. The AEP does not apply to Medigap (Medicare Supplement) plans, however. You can apply for Medigap at any time, but if you are outside your Medigap Open Enrollment Period, you might have to pass a medical underwriting before a new company will accept you. 

Knowing exactly what the AEP is designed for and how to prepare for it will help you avoid these mistakes.

Mistake:  Missing your Annual Notice of Change

Every year, Part D and Medicare Advantage plans must send out an Annual Notice of Change (ANOC) letter to their beneficiaries. If you have a Medicare Part D plan or Medicare Advantage plan, you should receive your ANOC by September 30th.

Your Annual Notice of Change (ANOC) will either be mailed or emailed to you, depending on your preference. This notice will explain all the changes made to the plan for the following year, such as premium and formulary changes. Some insurers send letters with instructions for viewing your plan changes online. If your insurer is one of those, the notice you receive may not actually contain changes to your plan.

It’s important to review your Annual Notice of Change (ANOC) every year before the Annual Election Period (AEP) is over. If you ignore your ANOC and stick with your current plan, you may be surprised to discover on January 1st that your plan dropped one of your daily medications from the formulary or canceled a benefit you relied on.

The Annual Election Period is generally the only time you can change Part D plans each year, so if you’re unhappy with your current plan, make sure you explore your options and make the switch during the AEP.

On the other hand, if you are enrolled in Medicare Advantage, you have a second chance to change your coverage during the Medicare Advantage Open Enrollment Period (January 1st – March 31st).

Mistake:  Dropping your Medicare Advantage plan before getting approved for your Medigap plan

If you decide to switch to Original Medicare and Medigap during the Annual Election Period, make sure you are approved for a Medigap plan before you drop your Medicare Advantage plan. Unless you have Medigap guaranteed issue rights, you may be denied coverage due to a pre-existing condition.

Outside your Medigap Open Enrollment Period, it may take a few weeks for the insurer to approve your application. This is especially true if the company wants to review your medical records.

Wait until you get your approval letter and effective date to drop your other coverage. Otherwise, you could find yourself past the Annual Election Period with no opportunity to enroll in a Medicare Advantage plan until the following year.

Mistake:  Not using the Medicare Plan Finder Tool to shop Part D plans

Medicare created an online Plan Finder Tool several years ago that has become a one-stop-shop for Part D plans. It is the go-to place to compare all Part D plans offered in your ZIP code. The Plan Finder makes it easy to compare multiple Part D plans at one time.

At Boomer Benefits, we recommend that our Medigap clients use this tool during the AEP to shop for Part D plans. Since most Medicare enrollees have access to dozens of different Part D plans, the Plan Finder is really the easiest way to compare premiums and formularies. 

Remember, all of our Medigap clients have access to our client service team for help with issues related to Part D, even if your plan is with a company we do not represent. This is a completely free service for our Medigap clients. 

You will also have access to an annual Part D video which explains how to use the Medicare Plan Finder Tool to make sure you find the most cost-effective plans in your area every year.

Mistake:  Not enrolling in a new Model Part D plan as an insulin-dependent beneficiary

Starting January 1, 2021, there is a new program called the Part D Senior Savings Model. The 2020 AEP is the first time you can enroll in one of the new Model Part D plans. Enrolling in a Senior Savings Model Part D plan will cap your insulin copayments at $35 or lower.

If you take insulin and it’s covered by Part D, not Part B, be sure to enroll in a new Senior Savings Model Part D plan during this year’s AEP. Doing so will cap your insulin spending at no more than $420 for 2021.

Conclusion

For many Medicare beneficiaries, the Annual Election Period (AEP) is a stressful time of year. But if you know the purpose of the AEP and how to prepare for it, you’ll glide right through and get the coverage you need.

If you are shopping for Medicare Advantage plans, Boomer Benefits can help you find the most cost-effective plan in your area. You can also give us a call at (855) 732-9055 if you have a Medicare Advantage plan, but would like to switch to a Medigap plan. You can learn more at BoomerBenefits.com.

Be sure to check out Boomer Benefits co-founder Danielle Kunkle Roberts’ new book, "10 Costly Medicare Mistakes You Can’t Afford to Make." (Ad) This best-selling book discusses ten other mistakes it is all too easy to make throughout your Medicare journey.

Are you interested in learning more about Medicare, Social Security, common medical problems, financial planning, where to live in retirement and more?  Use the tabs or pull down menu at the top of the page to find links to hundreds of additional helpful articles.

Disclosure: This blog may contain affiliate links. If you decide to make a purchase from an Amazon ad, I'll make a small commission at no extra cost to you.

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Graphic credit: Book cover

Common Medicare Mistakes

Many people assume that when they sign up for Social Security they will sign up for Medicare at the same time.  They also expect the procedure to be fairly simple and uncomplicated.  While sometimes this is true, it isn't always.  Decisions about when to sign up for Medicare, which parts you should enroll in, and what supplemental policies to purchase can be very complex.

Many people make mistakes when they initially sign up for Medicare.  When they do, it can make a significant difference in what they will pay in premiums for the rest of their lives.  Below are the most common mistakes retirees make.  It is important to educate yourself BEFORE you sign up.  While you can make some changes later, for example in which supplement you want to use, other mistakes are irrevocable.

Common Medicare Mistakes

*  Do not assume that you do not qualify for Medicare if you have not worked long enough to qualify for Social Security (a total of about 10 years).  If you are age 65 or older, you qualify for Medicare Parts B and D as long as you are a U.S. citizen or a legal resident who has lived in the U.S. at least five years.  You might not qualify for Part A if you have not worked long enough, but you could qualify on a spouse's work record or you can pay premiums for Part A.  Go to your local Social Security office during the three months before you turn 65, or before another 3 months have passed afterwards, so you know your options ... even if you do not plan to start collecting your Social Security benefits for a few more years!

*  Do not postpone signing up for Medicare Part B, unless you have health coverage beyond age 65 through an employer or spouse's employer, and the employer has 20 or more employees.  Other than that exception, the seven month window for signing up is the month you turn 65, three months before and three months after.  If you fail to sign up on time, you will pay a penalty, in the form of a surcharge, for the remainder of your life.

*  Retirees covered by a COBRA or a retiree plan from an employer often still need Medicare Part B.  Many of these plans are set up to be a supplement to Medicare Part B.  If you fail to sign up on time, you'll have no coverage for doctors' services, outpatient care and medical equipment until you enroll.  You need to sign up either during your regular seven month window, or no later than eight months after you stop working (if you work past the age of 65).

*  Do NOT wait until your "full retirement age" or until you collect Social Security before you sign up for Medicare.  As mentioned above, the window for signing up for Medicare is NOT the same as your full retirement age.  They are not linked.  If your full retirement age is 66 or 67, you still need to sign up for Medicare around your 65th birthday, with the few exceptions mentioned above.

*  Do NOT postpone signing up for Part D drug coverage, just because you currently do not take any drugs.  You will end up paying extra penalties and have a delay in coverage when you need it.  One way to save money is to sign up for the Medicare approved Part D plan in your area with the lowest premiums. If you do use prescription drugs, you can research which plan is best for you by using the plan finder program on Medicare.gov or by calling Medicare at (800) 633-4227.

*  Do not get confused about the meaning of open enrollment.  The widely advertised open enrollment period of Oct. 15 to Dec. 7 each year only applies to people who are already on Medicare and wish to change their coverage.  If you are new to Medicare, you can sign up for a supplement or Medicare Advantage plan any time of year.

*  Do NOT wait too long to choose a Medicare Supplement or Medicare Advantage plan.  Since basic Medicare only covers about 80 percent of most medical bills, the majority of people will want to use either a Medicare Supplement or a Medicare Advantage plan.  You need to enroll in one within six months of enrolling in Part B.  If you do that, you cannot be denied coverage or charged higher premiums because of a preexisting medical condition ... no matter how sick you are.  This is a one-time opportunity.  If you are not happy with the plan you initially selected, in most cases you can change it each year during the open enrollment period. (Your choices may be limited if you have end-stage renal failure). If you sign up for Part B when you turn 65, but you do not get a supplemental policy within six months because you are still working and have employer provided insurance, you lose the federal protection against being charged higher premiums because of a preexisting medical condition.

*  Make sure you understand the difference between a Medicare Supplement and a Medicare Advantage Plan.  Both are available across the United States.  A Medicare Supplement is a policy you buy in addition to paying for your Medicare benefits.  You normally have a wider choice of doctors and hospitals; however, they are typically more expensive than a Medicare Advantage Plan and you are basically paying for and dealing with two insurance companies ... the basic government Medicare agency and the insurance carrier handling your Medicare Supplement.  A Medicare Advantage Plan limits you to their group of doctors and hospitals.  However, they are typically less expensive and sometimes cost no more than basic Medicare, yet offer better coverage.  In addition, you only need to file claims and deal with the Medicare Advantage insurance company.  They handle government claims for you.

*  Do not ignore the Annual Notice of Change.  It will be mailed to you every September if you are enrolled in a Medicare Advantage plan (either HMO or PPO) or a Part D prescription plan.  It will explain what changes in coverage and premiums will be made for the coming year.  After reading it, you can decide if you want to select a different plan during the fall open enrollment period.  This could help you avoid a nasty shock from rising premium prices or changes in coverage.

*  Do not forget that many retirees qualify for financial assistance.  This is not charity.  You are entitled to this assistance and extra benefits.  If money is tight, find out if you qualify for these programs:

Medicare Savings Program - Your state will pay the Part B premiums and possibly other expenses.

Federal Extra Help - You could qualify for low-cost Part D prescription drug coverage.

To find out if you qualify, contact your State Health Insurance Assistance Program (SHIP).  You can find the toll-free number at:   shiptacenter.org

Want to find more information about Medicare, Social Security, common health issues, financial planning or the best places to retire?  Use the tabs or pull down menu at the top of the page to find links to hundreds of additional articles.

You are reading from the blog:  http://www.baby-boomer-retirement.com

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