October 15 through December 7 is Medicare’s Annual Enrollment Period (AEP), the timeframe during which individuals who are already enrolled in Medicare have the opportunity to change their plan for the following year if they so desire. Of course, those who are happy with their existing plan have the option of simply keeping what they already have.
However, Ron Myers, a licensed independent health and life insurance agent with Citizen Advisory Group, LLC, advises all Medicare beneficiaries to review their plans during the AEP whether they’re currently satisfied or not. He explains, “Even if your individual needs and circumstances are the same, certain aspects of the plan itself may have changed, such as the premium, deductible, copay, formulary, or provider network. Too often, people end up staying with the same plan year after year even though a better fit might be available to them.”
Mr. Myers emphasizes that the AEP should not be confused with the Initial Enrollment Period, or IEP, which applies to individuals who are just turning 65 and enrolling in Medicare for the first time. The IEP is a seven-month window that includes the month during which the individual turns 65 as well as the three months preceding his or her birth month and the three months after the birth month. This structure applies even if the individual turns 65 during the AEP.
Changes to drug coverage can have a dramatic impact on Medicare beneficiaries’ health and financial well-being, so Mr. Myers urges individuals who are enrolled in a Medicare Part D plan to review their formulary—the list of covered prescription drugs—to ensure all the medications they currently take will still be covered the following year. Otherwise, they could later discover that a vital medication is no longer available to them or that they now must pay the full cost of the drug out of pocket.
Mr. Myers offers the example of someone with diabetes who depends on a particular type of insulin to manage blood sugar. “There are multiple different types of insulin from various manufacturers, but the plan may only cover certain brands. If the preferred manufacturer gets changed, all the sudden you may be responsible for the full cost of the drug or you’ll have to talk to your doctor to see if you can use the one that’s on the plan’s formulary. Maybe it works just as well, but maybe it doesn’t,” he says.
Carriers who offer Medicare Part C (Medicare Advantage) or Part D (Medicare Prescription Drug Plan) are required to issue an Annual Notice of Change, typically no later than October 1, that advises members of any such changes going into effect the following year. Unfortunately, these official notifications from carriers tend to arrive in beneficiaries’ mailboxes along with an avalanche of Medicare solicitations and marketing pieces from various entities, making them all too easy to overlook.
Another critical element to review during the AEP is the network of providers covered under your plan. “If you’re in a Medicare Advantage plan, which typically combines original Medicare with Part D, keep in mind that the network of providers can change from year to year. You want to make sure any doctors you currently see or want to see will still be in network next year. The private carriers who contract with Medicare to provide these plans typically send out a letter to inform members that certain doctors are no longer in network, but again, these official letters can get lost in the shuffle with all the solicitations filling up your mailbox,” Mr. Myers says.
Perhaps the best way to cut through all the clutter and confusion and make the most of the Annual Enrollment Period is to work with an agent who knows all the ins and outs of Medicare and has the expertise to help you select the best plan for your needs out of the many available options. “From my viewpoint, everyone’s needs and circumstances are different, so there’s no one best plan for everyone. When it comes to choosing a Medicare plan, it’s what you don’t know you don’t know that can cause problems. As an independent agent contracted with multiple carriers, I or my colleague James Polling, who has the same licensing that I have, can look at all the available options and help identify which plan may be the right fit for you,” states Mr. Myers.
Investment advisory and financial planning services offered through Advisory Alpha, LLC, a Registered Investment Advisor. Insurance, consulting and education services offered through Citizen Advisory Group. Citizen Advisory Group is a separate and unaffiliated entity from Advisory Alpha.