The Medicare Annual Enrollment Period is from October 15th- December 7th it allows you to change your coverage. Many people don't realize that Medicare Advantage and prescription plans change annually.
The plan that was great in 2020 might not be your best option in 2021.
The prescription that was a $20 copay last year now costs $80. Or, the deductible for a Medicare Advantage plan is higher than it used to be. Or, a favorite doctor isn't in the network anymore.
This is why it's important to plan now for affordable healthcare in the coming year.
Possible Changes During the Annual Enrollment Period
During the annual enrollment period, you can:
- Switch from Medicare Advantage to Original Medicare
- Switch from Original Medicare to Medicare Advantage
- Change from one Medicare Advantage plan to another
- Enroll in a Part D prescription drug plan
- Change your prescription drug plan
- Drop your prescription drug coverage
Your changes will take effect starting January 1st the following year. If you have Medicare, you can enroll in a Medigap plan.
But unless you are newly eligible for Medicare, you'll have to go through a underwriting to qualify.
The Annual Notice of Change
If you have a Medicare Advantage or a prescription plan, your plan will mail you an Annual Notice of Change every year.
Medicare plans almost always change from one year to the next, and the Notice explains how your coverage will be different next year.
Changes might include:
- Changes to your monthly premium amount
- Changes to deductibles and/or copays
- Changes to your prescription plan's formulary, or list of drugs covered
- Changes to your plan's service area
- Changes to the network of hospitals and doctors
You should receive your Annual Notice of Change by the end of September—in time to plan and prepare for annual enrollment. If you don't get your Notice, contact your plan to request one.
What to Expect from Your Advantage Plan Next Year
Once you have your annual Notice of Change, you can look at how your Medicare Advantage plan's changes will affect you.
Start with the basics and make sure you'll still be living within your plan's service area. Also, check to see that your doctors and hospital will still be in your plan's network.
If your usual doctors are out of network, you'll have to change doctors or plans. Next, look at the Maximum Out of Pocket. You can think of this as your worst-case scenario cost.
If you had a serious illness or accident, the Maximum Out of Pocket is the most you'd have to pay.
Finally, review your plan's deductible, copays, and coinsurance. The deductible is the amount you have to pay before your insurance pays anything.
Copays are a fixed amount that you'll pay for a particular service. For example, your plan might have a $30 copay for visits to your primary care doctor.
Coinsurance is a percentage you'll pay for services. For example, your plan might pay 80% of the cost of an MRI, and you'll pay 20%.
Thinking back over the last year or two, you can probably make a pretty good guess at the healthcare you'll need for the coming year. Then you can estimate what your costs for 2021 might be with your current plan when you take into account deductibles, copays, coinsurance, and the out of pocket maximum.
If you aren’t sure you can afford the care you need, it’s time to look for a new plan.
Reviewing Your Prescription Drug Coverage
All Medicare prescription plans have a drug formulary. That's a list of drugs that the plan covers, organized into tiers that reflect how much you'll pay for your medications.
For example, a tier 1 generic drug might only have a $5 copay. But you might have to pay 20 percent of the cost of an expensive tier 4 medication.
When reviewing your Annual Notice of Change, here are questions to ask yourself:
- Are my medications still included in my plan's formulary?
- What tier will they be in next year?
- Will copays or coinsurance be different next year? What can I expect to pay for my medications?
- Am I still in my plan's service area?
- Is there a preferred pharmacy convenient to where I live?
If your prescription costs are going up, or if you already pay high prices for prescriptions, it’s a good idea to research other plans to see if you can bring your costs down.
Tips for Shopping Around and Making Changes
Even if you can afford healthcare with your current Medicare plans next year, it pays to look at alternatives. A different plan could have lower monthly premiums, deductibles, or copays.
It might have a more extensive or more convenient network of doctors or pharmacies. Start your research by making a list of the plan features that are most important to you.
For example, are low monthly premiums more important than low costs when you do need healthcare? Do you want a big network of doctors or pharmacies?
Is it essential to keep the same providers you use now? Do you need additional benefits like vision and dental coverage as part of your Medicare Advantage plan?
Finally, start early to give yourself time to make decisions. Enroll in a new plan as soon as possible after October 15th, to avoid the last-minute rush as the Annual Enrollment Period.
Lindsay Malzone is the Medicare Consultant for MedicareFAQ. She has worked in the Medicare industry since 2017 and is featured in many publications as well as writing Medicare focused columns for other publications.
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