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Medicare Annual Election Period

Medicare Annual Election Period

The arrival of autumn brings about the changing leaves, pumpkins and cooler weather. It also brings about the Medicare Annual Election Period (AEP). AEP, which occurs between October 15 and December 7, is when current participants in Medicare can evaluate their drug plans and supplemental coverage and are able to make any necessary changes. (AEP is not the time for new participants to sign up for Medicare.  Check out our blog “Medicare – When to Enroll?” to learn about when to enroll for Medicare for the first time.) 

Reviewing Your Last Year’s Drug Plan Coverage

For Medicare participants who have prescription drug plans (Part D) or are enrolled in a Medicare Advantage plans (with or without drug coverage) it is important to take advantage of the AEP opportunity and to not just assume that your past year’s coverage is still the best and most cost-effective coverage. Here’s why:

  • There are annual changes to drug plans that may impact the coverage and cost of the drugs that participants take. Also, new drug plans enter the marketplace and may provide similar coverage at a cheaper price. Every drug plan participant should receive an annual document called “Evidence of Coverage.” It is in this document that a drug plan’s current coverage is explained, and the participant is notified of what changes are going to take place in the coverage. We advise clients to carefully review this document and to look at the following items:
    • Monthly premiums
    • Drug formulary
    • Medication tiers
    • Annual deductible
    • Copayment amounts and coinsurance percentages
    • Coverage rules
    • Pharmacy networks
    • Quality ratings of plans

For those who want to shop for a new drug plan, the following website (https://www.medicare.gov/find-a-plan) is a great place to start.

  • For Medicare Advantage (MA) plans (which are run by insurance companies and structured in HMO and PPO formats), it is important for the recipients to review the “Evidence of Coverage” documents to identify changes in their drug coverage, and also to learn of changes that may impact which doctors they can see and which medical facilities they are able to access. MA plan recipients should pay close attention to the following during their review:
    • Monthly premiums
    • Annual deductible
    • Annual-out-of-pocket spending limit
    • Provider network
    • Quality ratings of plans
    • Optional benefits such as dental or vision

If you decide to make a switch, call 1-800-MEDICARE or the insurance provider of the new plan. Alternatively, you can go online to medicare.gov or the website of the insurance carrier.

 The following actions can take place during AEP:

  • For those with Original Medicare (Part A, B, D and a Medigap policy)
    • Drop Original Medicare and switch to a Medicare Advantage plan
    • Change, enroll in or drop Part D coverage
  • For those with Medicare Advantage plans
    • Switch to another MA plan with or without drug coverage
    • You can switch to Original Medicare but should first secure a Medigap policy (to make sure you are accepted after medical underwriting). Once you have secured a Medigap policy you can then shop for a prescription drug Part D plan.

Making a Change to Part D or Medicare Advantage

If you do decide to make a change to your current Part D or Medicare Advantage plan coverage the change will go into effect on January 1 and at that time you should be automatically unenrolled from your old coverage. If you are going from Original Medicare with a Medigap Policy to a Medicare Advantage plan, please note that you will have to cancel your Medigap policy as it will not automatically happen.

If upon review of your current coverage you find that it is still the best coverage for you, you do not have to do anything to stay in your current plan and you will automatically be re-enrolled by your current provider.

Summary

To summarize, we recommend that all Medicare recipients take advantage of the Annual Election Period in order to take a look “under the hood” of their current Medicare coverage. This exercise is important to avoid paying more than you have to in higher premiums and to make sure that you understand what is and what is not covered by your insurance. Once you are clear, you may want to adjust your financial plan accordingly. 

Medicare decisions are important to your overall financial plan.  We recommend that you discuss the choices with your Wealth Advisor, who will be able to serve as a resource to determine the right coverage for you.

Important disclosure information

Please remember that different types of investments involve varying degrees of risk, including the loss of money invested. Past performance may not be indicative of future results. Therefore, it should not be assumed that future performance of any specific investment or investment strategy, including the investments or investment strategies recommended or undertaken by RegentAtlantic Capital, LLC (“RegentAtlantic”) will be profitable.

Please remember to contact RegentAtlantic if there are any changes in your personal or financial situation or investment objectives for the purpose of reviewing our previous recommendations and services, or if you wish to impose, add, or modify any reasonable restrictions to our investment management services. A copy of our current written disclosure statement discussing our advisory services and fees is available for your review upon request.

This article is not a substitute for personalized advice from RegentAtlantic. This article is current only as of the date on which it was sent. The statements and opinions expressed are, however, subject to change without notice based on market and other conditions and may differ from opinions expressed in other businesses and activities of RegentAtlantic. Descriptions of RegentAtlantic’s process and strategies are based on general practice and we may make exceptions in specific cases.

RegentAtlantic does not provide legal or tax advice. Please consult with a legal and or tax professional of your choosing prior to implementing any of the strategies discussed in this article.

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