Medicare coverage changes: Key takeaways
- January 1 to March 31 – General enrollment for Medicare Part B, for people who didn’t sign up when they were first eligible (this is also the general enrollment period for people who have to pay premiums for Medicare Part A and didn’t sign up when first eligible).
- January 1 to March 31 – Medicare Advantage open enrollment period: People who already have Medicare Advantage can switch to Original Medicare (plus a Part D prescription drug plan) or to a different Medicare Advantage plan.
- October 15 to December 7 – Open enrollment period for Medicare Advantage and Medicare Part D.
- December 8 to November 30 – Special enrollment for 5-star plans
- First year of Advantage coverage – One-time trial period during which it’s possible to switch from Medicare Advantage to Original Medicare, Medigap or Part D plan.
Ready to change coverage? You’re not alone.
You’ve done your homework, carefully compared Medicare coverage options, and you’ve become one of more than 61 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. Hundreds of thousands of Medicare enrollees take a hard look at their Medicare coverage – and decide to switch – each year (although the number of people who switch plans is a very small fraction of the total number of enrollees). 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 (and Part A, for those who have to pay premiums for it), for people who didn’t sign up for when they were first eligible. This window runs from January 1 to March 31, with coverage effective July 1.
There’s also a Medicare Advantage open enrollment period, from January 1 to March 31 (this became available as of 2019, and is a reinstatement of a similar enrollment period that applied before 2011). During this window, Medicare Advantage enrollees can switch to Original Medicare — plus a Part D prescription drug plan if they want one — but they also have the option to switch to a different Medicare Advantage plan. Only one plan change can be made during this annual window, in contrast to the fall open enrollment period when enrollees can change their minds multiple times.
The January — March Medicare Advantage open enrollment period was created by Section 17005 of the 21st Century Cures Act, and replaced the Medicare Advantage disenrollment period that was used from 2011 to 2018. The disenrollment period, created by the Affordable Care Act, was only a month and a half long. It allowed Medicare Advantage enrollees to switch to Original Medicare and a Part D plan, but did not allow them to switch to a different Medicare Advantage plan.
The Medicare Advantage open enrollment period is not without controversy, as some advocates note that it gives Medicare Advantage a more competitive edge (versus Original Medicare) by allowing enrollees more flexibility with their coverage. But at the same time, the Medicare Advantage industry points out that plans now have to work harder to keep their enrollees, since members have the opportunity to switch to a different plan in the first three months of the year.
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, and a late enrollment penalty may apply when you eventually re-enroll).
Read more about the four ways you can upgrade your Medicare coverage during open enrollment. Also take a minute to read about Medicare enrollment mistakes that could cost you money.
Medicare Part B (and Part A) general 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.
Most people get Medicare Part A automatically, and for free, when they turn 65. But people who don’t have enough work history (or spouse’s work history) to qualify for premium-free Part A have to pay premiums if they want Part A coverage. If they choose not to enroll in Part A when they turn 65, they can do so later, during the January — March general enrollment period. But as is the case with Part B, a late enrollment penalty may apply for those who have to pay premiums for Part A and sign up after their initial eligibility window ends.
Four ways to leave Medicare Advantage
Medicare Advantage (Medicare Part C) has become increasingly popular over the last decade. Thirty-four percent of all Medicare beneficiaries were in Medicare Advantage plans as of 2019, up from just 13 percent in 2005. And by late 2019, nearly 38 percent of Medicare beneficiaries had private coverage, nearly all of whom had Medicare Advantage (Medicare Cost plans are another form of private Medicare coverage, but very few people are enrolled in those plans). 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 open enrollment period (January 1 to March 31). Note that Medicare Advantage enrollees also have the option to switch to a different Medicare Advantage plan during this time.
- 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 open enrollment period
For Medicare Advantage enrollees who are no longer in their trial period, there’s an annual Medicare Advantage open enrollment period that became available starting in 2019. It runs from January 1 to March 31 each year, and allows Medicare Advantage enrollees to switch to Original Medicare or to a different Medicare Advantage plan. The ability to switch plans during the January — March enrollment period is limited to one plan change per year. This open enrollment period replaced the Medicare Advantage disenrollment period that was used from 2011 to 2018, and provides more flexibility to Medicare Advantage enrollees (the disenrollment period was half as long and didn’t allow enrollees to switch to a different Medicare Advantage plan; it only allowed them to switch to Original Medicare).
When Medicare Advantage enrollees switch to Original Medicare during the January-March open enrollment period, they’re also eligible to purchase a Part D Prescription Drug Plan. But a person who has Part D coverage with Original Medicare cannot switch to a different Part D plan during the January — March open enrollment period, since this window only applies to Medicare Advantage enrollees.
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 March 31. Your ability to switch to Original Medicare and a Part D prescription plan is guaranteed — but in most cases, you will not have a guaranteed-issue right to purchase Medigap coverage; insurers in most states will be able to use medical underwriting for a Medigap plan purchased after your initial enrollment window ends. Alternatively, you can switch to a different Medicare Advantage plan during this period, if the one you have is not meeting your needs.
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 and you’re planning to switch to Original Medicare plus a Part D plan, 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 (you can click on a state on this map to see how Medigap plans are regulated in the state).
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, unless they have access to one of the limited guaranteed-issue rights.
In New York and Connecticut, medical underwriting is not used for Medigap plans, regardless of when the applicant enrolls. And several other states have limited guaranteed-issue opportunities. But in most states, 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 (guaranteed-issue rights). Special enrollment periods offer access to at least some Medigap plans with no medical underwriting, but the triggering circumstances for these special enrollment periods are fairly rare.
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 click on a state on this map to see details about state-based regulations and requirements for Medigap plans. 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 19 percent of Original 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 Medicare contract is assigned a rating of one to five stars, with the best contracts receiving five stars. If you live in an area where a five-star Part D or Advantage plan is available, you can join or switch to the five-star plan up to once per year, between December 8 and November 30.
In 2020, there are a total of 23 Medicare contracts nationwide that have a five-star rating, although two of those are employer-group Part D plans, so they aren’t available for individual enrollees to purchase on their own. The following contracts have 5-star ratings for 2020 (note that plan availability is limited to only certain counties within a given state):
- Kelsey-Seybold Administrators (Texas)
- Kaiser Foundation Health Plan (California)
- Kaiser Foundation Health Plan (Colorado)
- Humana’s CarePlus Health Plans (Florida)
- Guidewell’s Florida Blue Medicare (Florida)
- Kaiser Foundation Health Plan (Georgia)
- Kaiser Foundation Health Plan (Hawaii)
- Martin’s Point Generations Advantage (Maine and New Hampshire)
- UnitedHealth Group’s Care Improvement Plus South Central Insurance Co. (New York)
- Kaiser Foundation Health Plan of the Mid-Atlantic States (Maryland and Virginia)
- Kaiser Foundation Health Plan of the Mid-Atlantic States (DC, Maryland, and Virginia)
- Tufts Associated Health Maintenance Organization (Massachusetts)
- HealthPartners’ Group Health Plan (Minnesota, Wisconsin, South Dakota, and North Dakota)
- CVS Health’s Aetna Health (Maine)
- UnitedHealthcare Benefits (Texas)
- Kaiser Foundation Health Plan (Washington)
- Quartz Health Plan Corporation (Iowa, Illinois, Wisconsin)
- Cigna/HealthSpring of Florida (Florida)
- Anthem/Healthsun Health Plans (Florida)
- Quartz Health Plan (Minnesota)
- Medical Associates Health Plan (Iowa, Illinois, and Nebraska) — this plan is Medicare Advantage only, without Part D coverage.
- Anthem/Blue Cross Blue Shield of Massachusetts, Rhode Island and Vermont (Part D only; plans are only available to employers)
- Excellus Health Plan/Lifetime HealthCare (Part D only; plans are only available to employers)
Most plans do not receive five stars, and most areas of the country do not have 5-star plans available: The 21 Medicare Advantage contracts that have 5-star ratings are available in a combined total of up to 446 counties, although some of those counties may overlap; the majority of the more than 3,000 counties in the US do not have 5-star plans available.
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 or other institutional facility, enrollment in Medicare Advantage plans and Part D prescription drug coverage is not limited to the annual open enrollment period. Enrollees who qualify for Extra Help can make changes to their Medicare Advantage or Part D coverage up to once per calendar quarter. And enrollees who are institutionalized can make changes to their Medicare Advantage or Part coverage 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.