For those interested in Medicare Advantage Plan coverage, the most important time of the year is the Annual Enrollment Period (AEP). During this seven-and-a-half-week stretch running Oct. 15 through Dec. 7, qualifying Medicare enrollees can select, alter, or disenroll from their Medicare Advantage Plan coverage. Any changes made will take effect on Jan. 1. This is the only time of the year that those who are enrolled in Original Medicare may purchase a Medicare Advantage Plan.
Even if you’re already enrolled in a Medicare Advantage Plan, it’s wise to review your coverage during the Medicare AEP. Yearly changes to the benefits and costs of Medicare Advantage Plans make it important that you plan for the coming year.
What To Do During The Medicare AEP
During the Medicare AEP you can enroll in a new Medicare Advantage Plan, disenroll, or make changes to your plan. When doing so, make these essential considerations:
- Research your doctors, hospitals, and labs, confirming they will be in-network for the coming year.
- Check for changes in drug coverage and costs, plan premiums, and the Maximum Out-of-Pocket (MOOP) limits, as well as the various copayments and coinsurance costs for covered medical procedures.
- Review coverage for ancillary services such as hearing, vision, dental, over-the-counter health items, meals provided after hospitalization, gym memberships, and telehealth.
Medicare beneficiaries are often either unaware of their options during AEP or – quite understandably – confuse it with the Open Enrollment Period (MA-OEP), which takes place in the first quarter of each year and has different enrollment options.
AEP Shopping Guide
Medicare Advantage Plan coverage options and benefits can adjust significantly from year to year, so it is vital to investigate the coming changes. One great resource for research and comparison of all plans available in your area is the Medicare Plan Finder, a free online tool on the Medicare website.
Here is a list of critical criteria to use when comparing Advantage Plans:
Monthly premiums: Medicare Advantage Plan monthly premiums vary from company to company and change on a yearly basis. In 2019, 56% of enrollees paid no premium, only 7% paid $100+ per month, and the average was $29 per month. This is in addition to the standard Part B monthly premium of $170.10 for 2022.
Part D deductible: If a Part D Deductible is required, the plan cannot exceed the standard yearly deductible of $480 in 2022. Plan carriers may set the deductible lower and many MA-PD plans exempt Tiers 1, 2, and 3 from the deductible and offer first dollar coverage for these drugs.
Maximum out of Pocket: All Medicare Advantage Plans must have an annual Maximum out of Pocket (MOOP) limit for services covered under Parts A and B. The maximum amount is $7,550 for 2022, but many plans set it as low as $3,000. Once your cost for Medicare-covered services reaches the MOOP, you will pay no more for the cost of Part A and B services for the remainder of the year.
Drug formulary: Drug copays are normally broken into five or six standard tier groups:
- Tier 1 – Preferred Generic drugs
- Tier 2 – Generic
- Tier 3 – Preferred Brand drugs and select insulin drugs
- Tier 4 – Non-Preferred drugs
- Tier 5 – Specialty drugs
- Tier 6 – Select Care (generic adherence medications) such as insulin.
Check that the medications you take are on the plan formulary and check the tier level and cost of copay for each drug. The Medicare Plan Finder is a good place to compare the costs of drugs offered by all plans in your area.
Hospital stays: Inpatient hospital stays differ in cost-sharing among Advantage Plans. Compare the cost per night and the number of nights you must pay that amount before your copayment is met This will calculate the maximum cost for each stay in the hospital. If the plan requires you to pay $190 per night up to a maximum of five nights, your maximum cost per stay is $950, even if you are hospitalized longer than five nights. Be sure your plan covers hospital observation costs, or you may end up footing that bill.
Outpatient surgery: It is important to select a plan that has a copay and not coinsurance for outpatient surgery and hospital usage. I often see bills of $40,000, $50,000, or more for same-day surgeries. One plan may charge a copayment of $250 for the event while another has a coinsurance of 20%. Coinsurance for one outpatient surgery can easily cost the full amount of your MOOP.
Add-ons: Check for any changes to the availability and quality of the ancillary products included in the plan, such as dental, vision, hearing, over-the-counter supplies, and gym memberships.
International coverage: If you pursue a digital nomad lifestyle or simply travel overseas, international coverage is important. Be sure the plan offers worldwide emergency/urgent care travel coverage. Not all plans do.
Given the current healthcare environment, it has arguably never been more important to make sure your healthcare coverage is set up to best suit your needs. Start your research now and ensure you are in the strongest healthcare position possible as you anticipate the next AEP.
If you find it too daunting to research the many plans available and make the proper comparisons on your own, enlist the assistance of your State Health Insurance Assistance Program (SHIP) which is a free service, or contact an independent Medicare broker or agent. Most agents and brokers represent multiple plans and are paid by the carriers they service, so there is no charge for a consultation.