Medicare Open Enrollment: Everything You Need to Know

Also, if you left your job or retired you may have enrolled in COBRA (the stopgap coverage for people who lose their coverage due to job loss) or a retiree health plan through your employer or labor union. If your COBRA coverage ends or your retiree coverage goes away, you’ll have 63 days to buy a Medigap policy under the government’s guaranteed issue rule.

Medicare Advantage open enrollment basics

Medicare Advantage, also known as Part C, is a private insurance alternative to original Medicare that bundles together Parts A, B and (usually) D. Think of it as a one-stop-shop option, unlike original Medicare, which requires you to shop around for separate drug coverage and supplemental insurance.

Read your letter. Every September, Medicare Advantage plans are required to send their members a letter called the Annual Notice of Change. This letter will detail changes the plan is making starting in January, such as to benefits, costs or the geographical area the plan covers.

You’ll want to use this information as you decide whether to stay with your current MA plan, change to a different MA plan or switch instead to original Medicare.

Special open enrollment period for MA plans. If you are already in an MA plan, you’ll have some extra time to decide what to do. The special open enrollment period runs from January 1 through March 31. During this window you can switch from one MA plan to another or to original Medicare. If you switch to original Medicare, you’ll also be able to get a stand-alone Part D prescription drug plan. This special period only applies to people who already have an MA plan.

Going to the doctor or hospital. Pay careful attention during open enrollment if you have a Medicare Advantage plan. Most MA plans are organized around networks of physicians and other medical providers, including hospitals. If you use in-network practitioners, you’ll pay less than if you see providers outside of your plan’s network.

During open enrollment, you need to check the provider directories of your MA plan to make sure that your doctors are still in the plan. If not, you might want to consider changing plans, depending on how important it is to you that you continue to see specific medical professionals.

If you’ve had a significant change to your health status, such as a serious illness like cancer, you’ll want to confirm whether the physicians and medical centers you need to help you through this illness are available to you in network under your current plan. Otherwise, you run the risk of facing big out-of-network bills.

Medicare open enrollment and prescription drugs

Medicare beneficiaries get their prescription drugs in one of two ways: through a stand-alone Part D prescription drug plan or as part of their Medicare Advantage plan.

A common check for both options during open enrollment should be whether the medications you take are still covered under your current plan — and at what cost. Beneficiaries should also look at what pharmacies are preferred by your current plan and whether those still are most convenient for you. You should also look at whether you can save money by getting your drugs through the mail and whether your plan offers that.

“People may take time to choose a drug plan when they first go on Medicare and stick with it then for years to come,” says Neuman. “But sticking with a plan can come at a cost because drug plans do change from one year to the next, and people’s drug needs change over time. We’ve seen people save hundreds if not thousands of dollars by comparing plans.”

How much Medicare beneficiaries will have to pay out of pocket for prescriptions will be changing thanks to the Inflation Reduction Act of 2022. Currently, people who reach a certain level of out-of-pocket spending on prescription drugs — the threshold is $7,400 for 2023 — enter what’s referred to as “catastrophic” coverage and owe 5 percent of the costs above that level. Beginning in 2024, people with catastrophic Rx costs will not have any additional out-of-pocket costs once they’ve reached the threshold level. Then, starting in 2025, out-of-pocket prescription drug costs will be capped at $2,000 year.

People who get their medications as part of their Medicare Advantage plan aren’t able to choose a stand-alone drug plan, Neuman cautions. “They get whatever drug coverage that plan provides.” That means that as people think about whether to remain with their current MA plan or switch plans, she says, they should also look at the specific prescription drug coverage built into their MA plan.

Switching between Medicare options

Here’s what to consider if you are thinking about switching from one Medicare option to another during open enrollment:

• Switching from original Medicare to a Medicare Advantage plan. Make sure your providers are covered in network in the MA plan you select. Also be aware that you will likely be subject to more management of your care: Some plans will require referrals to specialists, and MA plans often require prior authorization from the plan for some diagnostic tests and other services.
  
  
• Switching from Medicare Advantage back to original Medicare. The rules let you do this, but there’s a big caveat: If you want to go back to original Medicare, you may not be able to get a supplemental (Medigap) plan — or at least one that’s affordable — that helps you pay for some out-of-pocket costs under original Medicare.
  
  
• Switching between MA plans. This is the time of year for you to take a hard look at your current Medicare Advantage plan and shop around to see if there might be a plan where you live that will better suit your needs and your pocketbook.

Financial assistance if you can’t afford Medicare

If you are having trouble affording your Medicare premiums, copays and other out-of-pocket costs, the federal government has four Medicare Savings Programs that provide help for people with limited incomes. There is also a program called Extra Help that assists beneficiaries with their out-of-pocket costs for prescription drugs. Even if you haven’t qualified for these programs before, the open enrollment period is a good time to check to see if your financial circumstances now allow you to qualify.

The Inflation Reduction Act also may soon come into play. Beginning in 2024, Medicare beneficiaries with annual incomes of up to 150 percent of the federal poverty limit ($20,870 for an individual in 2023) who also meet the program’s resources limit can qualify for full benefits under the Extra Help program. The income threshold for full benefits currently is 135 percent of the federal poverty guidelines ($14,580 for an individual in 2023).

How to get help picking a Medicare plan

Beneficiaries can compare plans and change their enrollment by going to www.medicare.gov. During the open enrollment period, there is also live chat assistance on the website.

In addition, Medicare has a 24-hour, seven-day-a-week hotline where representatives can answer your open enrollment questions. That toll-free number is 800-633-4227. Also, every state has a State Health Insurance Assistance Program (SHIP) with counselors who can help answer your questions.