The Medicare Annual Enrollment Period (AEP) Is Right Around The Corner

Michael T. Braden, September 7, 202 ANNUAL ENROLLMENT PERIOD

THE MEDICARE ANNUAL ENROLLMENT PERIOD

It is almost time again for the Annual Enrollment Period to begin. We are just five weeks away, so I thought it was time not just for a reminder, but to explain why this year's AEP (Annual Enrollment Period) may be one of the busiest in the last 10 years.

One of your homework assignments before every AEP should be to review the Annual Notice of Change Letter you receive in September. Everyone with a Medicare Advantage Plan or a Medicare Part D Prescription Drug Plan will receive your ANOC (Annual Notice Of Change Letter). This letter is actually more like a packet or a dossier. And, it includes essential information about your current plan. Questions like: Will your plan still be available for the 2025 Plan Year? Have premiums gone up, or will your plan go away, leaving you to find a new plan for 2025? They will also include a side-by-side comparison of your plan in 2024 and your plan with any changes for 2025, so you can easily see if the plan still makes sense for you.

Medicare And You Poster Stating The Annual Enrollment Period For Medicare Is Between October 15th and December 7th.

WHAT YOU CAN DO DURING THE MEDICARE ANNUAL ENROLLMENT PERIOD THIS FALL

The Fall Opera Enrollment Period runs from October 15th to December 7th. Here is what you can do during this critical time:

If you are a Medicare Advantage Member, you can choose to stay with your current Medicare Advantage Plan, as long as your plan is still available. If that is what you decide to do, then you do not need to do anything else. Your plan will automatically renew on January 1st.

If you have a Medicare Part D Prescription Drug Plan, you really need to investigate your options for 2025. Why? Well, because there are some significant changes to ALL Part D Plans in 2025, thanks to the Biden Administration's Inflation Reduction Act (IRA), which obviously has done nothing to curb inflation.

LET'S LOOK AT THE CHANGES BROUGHT ABOUT BY THE IRA:

• For starters, the maximum out-of-pocket amount for Prescription Drugs in 2025 will be $2,000.

• The Catastrophic Phase of Coverage, which everyone referred to as the Donut Hole, is gone in 2025.

• Medicare Part D Premiums are increasing by 6% overall.

• The Medicare Part D Plan Deductibles are increasing to $595.00.

• You will have the option to defer payment of your initial prescriptions. You can make payments at the pharmacy without paying the full amount. This is intended as a helping hand; it is not a loan. Your prescriptions are not free, and you must make your installment payments or risk losing your coverage.

• Many Part D Plans have been dropped for the coming year. In Arizona alone, Mutual of Omaha and BCBS will no longer offer Part D Drug Plans. Other companies have cut back on the variety of plans they offer.

YOUR MAILBOX WILL BE FILLED WITH AN ENORMOUS AMOUNT OF JUNK MAIL. MOST OF THIS IS 99% JUNK MAIL

We have always recommended that the only mail you should keep during the AEP is:

• Anything from CMS (Centers for Medicare & Medicaid Services).

• Anything from Social Security.

• Anything from your current Insurance Provider, including your Medicare Advantage Plan, Prescription Drug Plan, and Medicare Supplement Plan.

Everything else is just junk (flyers, brochures, and propaganda from other insurance companies and agents).

YOUR EYES AND EARS WILL BE BOMBARDED WITH MEDICARE TELEVISION ADS AND RADIO ADS

These Medicare Insurance Companies (Mostly Medicare Advantage Plans) use funds from the Government to pay for these ads. They are slick; they are intentionally written and produced to confuse the viewer, imploring them to call a Toll-Free Number so that you can "make sure you are getting all of the benefits you are entitled to". Pardon me, but these vultures are simply preying on the fears and confusion of Seniors. However, they do not tell the whole story.

Most people who call those numbers end up enrolling in a Medicare Plan from another company, usually one with fewer benefits and higher copays than your current Medicare Advantage (Medicare Part C) plan. They do not realize their new strategy is suboptimal until they see a doctor in March or April, and they are stuck with that plan for the rest of the year.

Remember this about Medicare Advantage plans. Not every plan and not all benefits are available in every market. There are more than 4,400 Medicare Advantage plans nationwide. They may quote a benefit you have not heard of before, usually because it is not available where you live.

NOTE: If you have a friend, relative, or loved one with Medicare, please assist them in finding an experienced Independent Medicare Broker in their area. By doing this, they will always have someone to call whenever they have a question. Someone who does not charge a penny for their services, an expert in Medicare and Medicare Insurance plans, and someone who understands all available options.

WHY ARE PEOPLE MOTIVATED TO CHANGE THEIR MEDICARE PLANS OR MEDICARE COVERAGES

THE MEDICARE ANNUAL ENROLLMENT PERIOD, AND THE FALL ENROLLMENT PERIOD ARE THE SAME THING

Also known as the Annual Election Period, the Medicare Fall OEP was introduced with the launch of Medicare Part D in 2006. It is an 8-week period every fall during which Medicare beneficiaries can enroll in, change, or disenroll from their Medicare Advantage and/or Part D drug plans.

Here’s why the period exists: Part D and Medicare Advantage plans can refile their benefits with Medicare each year.

This means the benefits and premiums under your plan may change or increase. Medicare offers an annual election period to change your plan if you don’t like changes to your existing coverage. Basically, your Medicare Prescription Drug benefits change every year, so you get an election period to change your plan if you don’t like those benefit changes.

The good news is that you do not have to change your plan if you like it. In fact, statistics show that most beneficiaries do not make changes to their plans each year. However, you should review the upcoming plan changes every September.

WHAT CAN YOU DO OR CHANGE DURING THE AEP?

Your choices for plan changes during the Medicare OEP?

• Do nothing, and your current Medicare coverage will automatically renew in 2025

• Enroll in, leave, or change your Medicare Part D drug plan.

• Switch from Traditional Medicare to a Medicare Advantage plan.

• Switch from a Medicare Advantage plan back to Traditional Medicare.

• Change from one Medicare Advantage Plan to another

Please remember that Medicare Part D drug plans do not include health questions. You can change to any other plan as long as you have either Medicare A and/or B, and you live in the plan’s service area.

Medicare Advantage plans have only one health question about End Stage Renal Disease, so it’s also relatively easy to enroll in or change your Medicare Advantage plan as long as you don’t suffer from this particular health condition.

HERE ARE THE BEST AND MOST COMMON REASONS WHY PEOPLE CHANGE THEIR MEDICARE ADVANTAGE OR THEIR PRESCRIPTION DRUG PLANS EACH YEAR

• Your plan is dropping one of your essential medications next year. Your Annual Notice of Change letter will specifically list any changes to its drug formulary for next year. The plan must disclose if they are dropping any medications. They must also inform you if a medication is moving to a higher-tier price for next year. If you take a brand-name medication now that won’t be covered the following year, you may want to change during the OEP to another drug plan that will.

• Your Medicare Advantage plan is dropping your doctor from its network. Unlike Medigap plans, Medicare Advantage plans have a network of doctors. If one of your doctors is leaving the plan’s network, you can use the Medicare OEP to switch to another plan that your doctor still participates in.

• Your plan has a significant premium increase. Please note that the keyword here is “drastic.” Inflation affects medical insurance plans just as it does auto insurance plans. If your auto insurance increases by $3/ 3/month next year, would you go to the trouble of changing it? Probably not. Likewise, if the only change to your drug plan is a slight premium increase, you don’t have to switch. But if your drug plan goes up $20/month, you might look to see if any other plan is cost-effective.

MEDICARE CHANGES FOR THE 2025 PLAN YEAR

In 2018, the Bipartisan Budget Act brought about changes to Medicare Advantage plans. While Original Medicare does not cover supplemental home health benefits, Medicare Advantage plans can now include them.

If you are looking at Medicare Advantage plans, you may notice that many now include supplemental home health benefits. This may include personal support services in your home, transportation to and from medical appointments, adult day care, telehealth medical appointments, over-the-counter allowances, and meal delivery.

WHAT ABOUT YOUR MEDIGAP OR MEDICARE SUPPLEMENT PLAN?

YOUR MEDICARE SUPPLEMENT OR MEDIGAP PLAN

Your Medigap plan has federally standardized benefits that do not change from year to year, unlike Part D plans.

If you have a Medigap Plan F, Plan G, or Plan N (or any other Medigap plan), rest assured that nothing will change with the benefits. Your plan next year will continue to cover the same benefits as this year. Rates May Change, Benefits Do Not

Medigap plans typically have annual rate increases, which take effect on your policy anniversary date. If you bought your policy on January 1 of a past year, your policy renewal occurs each year on January 1.

That means you will receive your notice of increase from your carrier in December. It occurs alongside the OEP but is unrelated to the Medicare Fall Open Enrollment Period.

Think of this like your automobile, renters, or homeowners insurance:

If you originally purchased your homeowners' insurance on June 1st, 2014, you will receive a rate increase every year on June 1st. The same applies to Medicare supplement insurance.

If your Medigap plan renews each year in January because you originally bought it with a January 1st effective date, that is coincidental. The plan’s benefits are not changing; only the premium varies from year to year for Medigap plans.

SHOULD YOU SHOP YOUR MEDICARE SUPPLEMENT PLAN DURING THE AEP?

• Now that you know your Medigap benefits will not change, it’s up to you whether you want to shop for it in the fall. Some people shop for it because they are already comparing Part D plans so that they can knock out both items on their to-do list for that year.

  
  

• We often find people who have been on the same Medigap plan for years and are hesitant to change because the plan pays so well. Rest assured, Medigap plans are standardized. Anyone with a Medicare Supplement/Medigap plan should review rates at least every other year to ensure they are not leaving money on the table.

  
  

• The Medicare OEP Does Not Prevent Underwriting on New Medigap Policies

  
  

• Many people mistakenly believe that you can change your Medigap plan during the OEP without health questions.

  
  

• That is not the case because, as noted above, the OEP doesn’t apply to Medigap. In most states, you will need to answer health questions in the new application. The insurance company can decide whether to accept or reject you.

  
  

• Medigap plans require you to pass medical underwriting unless you have an exceptional circumstance that qualifies you for a guaranteed issue window. For example, if you move out of state mid-year, you’ll be given a Special Election Period.

  
  

• You can use this short window to switch to a plan available in your new service area. If you don’t have a special election period, you’ll need to answer health questions to get approved for a new Medigap plan.

  
  

IS THE MONTHLY MEDICARE PART B PREMIUM GOING UP IN 2025?

Every year, the federal government can adjust your Medicare Part B premium. Part B premiums are tied to the Cost of Living Adjustment in your Social Security benefits. In 1965, new enrollees paid $3 per month for Medicare Part B.  In 2024, new enrollees pay at least $174.70/month, but this will likely change for 2025. Some people pay more based on their household gross income.

Generally, Social Security issues a COLA inflation adjustment that increases your Social Security monthly income benefits, and then the Part B premium usually also goes up. The most common projection I have seen is that Social Security Benefits are likely to increase by around 2.6% in 2025. I expect a modest increase in Part B Monthly Premiums.

Usually, we do not know the new Premiums for Part A and Part B until October.

WRAPPING THINGS UP

I hope this article about the Medicare Annual Enrollment Period was helpful, informative, and engaging. We would love to hear your comments, so please feel free to email us at mike@bradenmedicare.com anytime, and please ask to sign up for our monthly newsletter.