You’ve done your homework, carefully compared Medicare coverage options, and you’ve become one of more than 59 million Americans enrolled in some kind of Medicare plan.
And now – what’s this? You’re ready to change your coverage?
You’re not alone. Thousands of Medicare enrollees take a hard look at their Medicare coverage – and decide to switch – each year. Many beneficiaries are looking for improvement in their access to providers or specific medications, while others complain that they chose coverage based on inaccurate information they’d received. Still others cite claims denials for medical services they expected would be covered.
But while there are a variety of reasons a consumer might want to make a leap to new coverage, the options for coverage switches are limited. With that in mind, we’ve put together a summary of your options for changing your coverage.
Annual enrollment/disenrollment periods
There’s also a separate open enrollment window for Medicare Part B, for people who didn’t sign up for Part B when they were first eligible. This window runs from January 1 to March 31, with coverage effective July 1.
And there’s a Medicare Advantage disenrollment period, from January 1 to February 14, during which enrollees can drop their Medicare Advantage plans and switch to Original Medicare. The change takes effect the first of the month following the disenrollment request, so people who disenroll in January will be switched to Original Medicare as of February 1, and those who disenroll between February 1 and February 14 will have Original Medicare coverage as of March 1.
Changes during annual open enrollment
There are many plan changes that Medicare beneficiaries might want to make from one year to the next.
For most of them, the applicable open enrollment period is October 15 to December 7, with changes effective on January 1. During that timeframe, you can:
- Switch from Original Medicare to Medicare Advantage, or vice versa.
- Switch from one Medicare Advantage plan to another.
- Enroll in a Part D Prescription Drug Plan for the first time (a late enrollment penalty may apply)
- Switch from one Part D plan to another.
- Drop your Part D coverage altogether (you won’t be able to re-enroll until the following year’s open enrollment period).
Read more about the four ways you can upgrade your Medicare coverage during open enrollment.
Medicare Part B annual enrollment period
For Medicare beneficiaries who didn’t enroll in Medicare Part B during their initial enrollment window, enrollment is available during the first three months of each year (January 1 to March 31), with coverage effective July 1. But a penalty may apply, with the premium increased by ten percent for each year that enrollment was delayed, if the person wasn’t covered by a creditable employer-sponsored plan during the time that enrollment was delayed.
Four ways to leave Medicare Advantage
Medicare Advantage (Medicare Part C) has become increasingly popular over the last decade. 33 percent of all Medicare beneficiaries were in Medicare Advantage plans as of 2017, up from just 13 percent in 2005. But that doesn’t mean everyone is happy with Medicare Advantage, or that it’s the right option for all Medicare beneficiaries who enroll in it.
To protect Medicare beneficiaries, lawmakers provided escape hatches for Medicare Advantage enrollees who decide – for whatever reason – that they’d rather be covered under Original Medicare. There are essentially four different avenues available to enrollees who want to leave their Medicare Advantage plan:
- Make changes during general open enrollment (October 15 to December 7, with changes effective January 1).
- Switch to Original Medicare during the first year on the Medicare Advantage plan (trial period).
- Switch to Original Medicare during the annual Medicare Advantage disenrollment period (January 1 to February 14).
- Switch to Original Medicare (or a different Medicare Advantage plan, depending on the situation) if a special enrollment period becomes available.
Medicare Advantage trial period
All Medicare Advantage enrollees have a one-time trial period that runs for the first year they have coverage under a Medicare Advantage plan. This applies to people who enrolled in Medicare Advantage as soon as they turned 65, and also to people who switched from Original Medicare to Medicare Advantage – but only if it’s their first time being on a Medicare Advantage plan.
At any point during that year, the enrollee can switch back to Original Medicare, and can also enroll – with no medical underwriting – in a Medigap plan (Medicare supplement), and in a Part D Prescription Drug Plan if the Medicare Advantage plan covered prescriptions. (Note that for people who were previously enrolled in Original Medicare, switched to Medicare Advantage, and want to switch back within the first year, Medigap coverage is only guaranteed-issue if the person had been enrolled in a Medigap plan and discontinued it in order to enroll in Medicare Advantage.)
Annual Medicare Advantage disenrollment period
For Medicare Advantage enrollees who are no longer in their trial period, there’s an annual Medicare Advantage disenrollment period. It runs from January 1 to February 14 each year, and allows Medicare Advantage enrollees to switch to Original Medicare.
When Medicare Advantage enrollees switch to Original Medicare during the disenrollment period, they’re also eligible to purchase a Part D Prescription Drug Plan. This applies regardless of whether their Medicare Advantage plan included prescription drug coverage.
The right to enroll in a Part D Prescription Drug Plan during the Medicare Advantage disenrollment period does not apply to people who already have a stand-alone Part D Prescription Drug Plan in conjunction with a Private Fee-for-Service (PFFS) plan or a Medicare Medical Savings Account (MSA).
Those individuals do have a right to disenroll from their Medicare Advantage plan during the disenrollment period, and switch to Original Medicare. But to maintain prescription coverage, they must keep their existing prescription plan; they do not have the option to switch to a different prescription drug plan at that point. (They’ll have an opportunity to pick a different prescription drug plan when open enrollment comes around again in the fall.)
There’s no one-size-fits-all when it comes to Medicare coverage. If you’re on a Medicare Advantage plan and you’ve decided you’d be better off with Original Medicare, you can make that switch between January 1 and February 14. Your ability to switch to Original Medicare and a Part D prescription plan is guaranteed, and your new coverage will take effect the first of the month after your disenrollment request is received. Your Part D prescription coverage will be effective the month following your enrollment.
Notes on Part D changes
- If you’re enrolled in a Medicare Advantage plan that includes prescription drug coverage, you can simply enroll in a stand-alone Part D Prescription Drug Plan, which will automatically disenroll you from your Medicare Advantage plan (you also have the option to actively disenroll from the Medicare Advantage plan and then enroll in a Part D Prescription Drug Plan).
- If your Medicare Advantage plan does not include prescription drug coverage, you’ll need to actively disenroll from the Medicare Advantage plan and then enroll in a Part D Prescription Drug Plan. It’s recommended that you complete both actions within the same month; if you disenroll from a Medicare Advantage plan in January but don’t enroll in a Part D prescription plan until February, your Original Medicare coverage would take effect in February, but your drug coverage wouldn’t kick in until March.
- You’ll also have the option to apply for a Medigap plan when you switch to Original Medicare, albeit with medical underwriting in most cases.
Changing Medigap coverage
It’s important to note that there’s no federal provision to allow guaranteed-issue access to Medigap coverage for people who disenroll from Medicare Advantage outside of their trial period.
In New York and Connecticut, medical underwriting is not used for Medigap plans, regardless of when the applicant enrolls. But in the rest of the country, insurers can use medical underwriting to determine eligibility and premiums for anyone enrolling in a Medigap plan outside of their initial open enrollment window or one of the limited special enrollment periods. Special enrollment periods offer access to at least some Medigap plans with no medical underwriting.
And people switching from Medicare Advantage to Original Medicare tend to be those who have more significant health needs. If you’re on a Medicare Advantage plan (and no longer in your trial period) and considering disenrolling to switch to Original Medicare, there are resources to help you determine whether you’ll be able to enroll in a Medigap plan if you switch to Original Medicare.
Your State Health Insurance Assistance Program (SHIP) can help, as can a broker who specializes in Medigap plans; you can also contact the carriers in your area that offer Medigap plans and ask them about their underwriting guidelines. You can also get Medicare private enrollment advice from a licensed agent by calling one of our partners at 1-855-440-0202.
To be clear, a Medigap plan is not required; about 14 percent of Medicare beneficiaries don’t have supplemental coverage at all. But you’ll want to understand the possible implications of medical underwriting before you make your decision.
Special enrollment available for 5-star plans
Medicare utilizes a star rating system for Medicare Advantage and Part D Prescription Drug Plans. Each plan is assigned a rating of one to five stars, with the best plans receiving five stars. For 2018, there are a total of 23 plans that have five stars (this includes Medicare Advantage plans with prescription coverage, Medicare Advantage plans without prescription coverage, and stand-alone Part D Prescription Drug Plans). As of 2015, there were 16 plans with five stars.
Most plans do not receive five stars. For example, in 2016, there were 357 Medicare Advantage plans with prescription coverage that received fewer than five stars, and only 12 with five stars. But if you live in an area where a five-star plan is available, you can join or switch to a five-star Medicare Advantage plan or Part D Prescription Drug Plan up to once per year, between December 8 and November 30.
Additional special enrollment periods
Some Medicare special enrollment periods apply on a one-time basis and are triggered by specific events, while others apply year-round for specific populations. Some apply to Medigap, while others apply to Medicare Advantage and Part D Prescription Drug Plans.
For Medicare beneficiaries who qualify for a Low Income Subsidy (Extra Help), and for those who are in a nursing home, enrollment in Part D prescription drug coverage is not limited to the annual open enrollment period. These beneficiaries can join a prescription drug plan – or switch from one prescription plan to another – year-round, with coverage effective the first of the month following their enrollment.
Medicare beneficiaries who qualify for a State Pharmaceutical Assistance Program (SPAP) also have the option to join a Medicare Advantage or Part D plan (or switch plans) at any point during the year, but only once per year. (Not all states have SPAPs.)
Louise Norris is an individual health insurance broker who has been writing about health insurance and health reform since 2006. She has written dozens of opinions and educational pieces about the Affordable Care Act for healthinsurance.org. Her state health exchange updates are regularly cited by media who cover health reform and by other health insurance experts.