If you’re like many people, the information you receive about Medicare through the mail, from insurance agents, or by talking with friends, family, and co-workers can be confusing. And the abundance of conflicting information can leave you anxious, worrying that you could do the wrong thing—or nothing at all—and miss a key enrollment period or incur penalties forever.
Here are some common misconceptions we’ve come across:
- “I should wait until Open Enrollment in the fall to sign up for Medicare.”
- “I received a brochure that says I HAVE to enroll at age 65.”
- “If I have health insurance through my employer, I don’t need to enroll.”
- “I don’t have to enroll in Part D if I’m not on medication, but I can enroll at any time if and when I need it.”
- “I should just get a cheap plan now because I’m healthy. I can always switch to a better plan during Open Enrollment.”
The various enrollment periods for Medicare—Open Enrollment, Initial Enrollment, and Special Enrollment—are often confusing as well.
The Initial Enrollment Period (“IEP”) is most people’s first opportunity to enroll in the Medicare program. This is a seven calendar-month period beginning three months before the month of your 65th birthday (unless your birthday falls on the first of the month; then the period starts one month earlier). Unless you are covered by your employer’s (or your spouse’s) health plan, and your employer has at least 20 employees, you must enroll in Medicare during this period. Failure to do so could result in coverage gaps and/or lifelong penalties.
The Medicare Open Enrollment period occurs every year from October 15th through December 7th. The term “Open Enrollment” seems to imply that anyone can enroll in Medicare at this time, but Open Enrollment is for making changes to your existing Medicare coverage—primarily your Medicare Advantage Plan (or Medicare Part C plan), or your Medicare Part D prescription drug plan.
Here is what you can do during Open Enrollment:
- Switch from one Medicare Advantage plan to another Medicare Advantage plan
- Enroll in a Medicare Part D prescription drug plan
- Switch from one Medicare Part D prescription drug plan to another
- Switch from an Original Medicare supplement plan to a Medicare Advantage plan
You cannot change from a Medicare Advantage plan to an Original Medicare supplement plan during Open Enrollment. You can only do this from January 1st through February 14th every year. And if you’ve been on your Medicare Advantage plan for 12 months or longer, you may not qualify for an Original Medicare supplement plan if you have health issues. This is one reason the decisions you make when you first become Medicare-eligible are so important—you may not be able to make changes in the future.
Why would you want to make changes to your coverage? In most cases, a person would change her plan because of an increase in the premium for her current plan, or an increase in the co-pay amounts. But another reason you might want to change from one Advantage plan to another is that the network of providers may have changed—for example, if the group of doctors you are currently seeing decides to drop out of your plan’s network. This also applies to Medicare Part D plans. The co-pays may increase for your medications, or perhaps you are on new medications which are very expensive on your current plan, or the pharmacy you like is no longer in the plan’s network.
To make a change in your Medicare coverage, simply enroll in the Medicare Advantage plan or Part D Prescription plan you want, and you will automatically be dropped from your current plan.
So who should you listen to?
Our firm has retained the services of Eileen Hamm, an expert who specializes in Medicare planning, to guide our clients in their Medicare decisions. Grubman Wealth Management pays a retainer for Eileen’s services as a benefit to our clients. She does not sell any products.
Eileen will be conducting a live webinar on Tuesday September 13th at 1 PM Pacific time. She will discuss Enrollment periods and answer questions following her presentation. This webinar will be of interest to anyone who is nearing age 65 or has questions about Open Enrollment. Clients of Grubman Wealth Management, and their friends and family, are invited to join. Simply email firstname.lastname@example.org, and we’ll send you the info you need to join the webinar.