Question from Alicia:
Question from Alicia: Can you please explain all the different Medicare Election Periods, and what they mean to those of us soon to be, or already on Medicare? There’s so many different anacronyms, it makes me want to scream another out loud. SOB!
Answer
Answer: That’s hilarious Alicia. There’s almost nothing simple when it comes to Medicare unfortunately.
Let’s start with the three most common. OEP, Open Enrollment Period is going on now. It began on January 1st and runs through March 31st. It should not be confused with election periods when one first goes on Medicare A and/or B, which I will discuss shortly. OEP is somewhat of a secret due to it not being advertised by CMS or insurance companies. My understanding and opinion are OEP was brought back a few years ago to allow people to correct a mistake, either leaving what was a better Advantage Plan HMO or PPO or remaining on one that wasn’t competitive. It gives beneficiaries one move from Advantage Plan to Advantage Plan. Once somewhat of an afterthought and rarely used, OEP is extremely important today with all the misleading advertising and predatory practices such as cold calling, bad information being presented, rogue agents flat out lying to people, and even the enrollment of seniors in plans without their knowledge or consent. I’ve written about this several times in the past year and I don’t see it ending because significant steps have not been taken by CMS to punish those who commit violations and not enough new regulations have been imposed to motivate the culprits to cease. OEP also provides another opportunity for those currently on Medicare. During these three months a move from an Advantage Plan to a Supplement and Stand-Alone Part D prescription plan can be made. There are two changes that can’t happen using OEP as an election choice: Switching from one Stand Alone Part D plan to another or going from a Supplement to an Advantage Plan. There are ways to do the latter, but the OEP designation on the application can’t be used.
AEP, Annual Election Period, ended just over a month ago. It runs from October 15th to December 7th and is basically a free for all as I often refer to it. During these 53 days, Medicare beneficiaries can make any changes to their plan lineup including moving from one Advantage Plan to another, Supplement to Advantage Plan, Advantage Plan to Supplement, or one Part D plan to another which is something people who utilize for their drug coverage often fail to research. It’s vitally important that Part D is analyzed every year, which we do for all our clients during AEP. Not doing so can cost hundreds to thousands of dollars in unnecessary out of pocket expenses. Although Part D can only be changed during AEP, moving from one Supplement plan or company is not limited to any election period and can be done anytime during the year. However, many of those on Medicare have the misconception that during AEP, they can move from an Advantage Plan to a Supplement without having their current or previous medical history considered. That’s NOT true. Once someone is six months to a year removed from their original Medicare Part B effective date, insurance companies in all but eight states can discriminate on who they issue policies to. They use medical underwriting, which consists of a series of questions related to one’s health both past and present, as well as a review of each applicant’s Medical Information Bureau which I might describe as a medical credit report. In it is a list of every claim code submitted to a health or Medicare insurance company. These codes and the applicant’s answers to medical questions determine who the Supplement insurance companies choose to accept or decline.
Only having a small window to enroll in a Supplement is why it’s vital that those new to Medicare get educated on the differences, ins and outs, and pros and cons of both types of plans, Advantage and Supplements. Too many agents don’t do that. In fact, they often fail to even mention the Supplement option and sell Advantage Plans, even to those who have serious pre-existing medical conditions that could result in expensive out of pocket medical bills or keep them from enrolling in a Supplement for the rest of their lives. I believe this often occurs due to first year commissions that are as much as 400% more paid for selling an Advantage Plan than Supplements. As I write in almost every column, Advantage Plans, which we go over and offer to all prospective and current clients, can supply excellent value in terms of low premiums as well as benefits such as dental, vision, OTC, and much more that Supplements don’t offer. But they aren’t right for many and could wind up more costly than Advantage Plans in the long run.
IEP, Initial Election Period, is utilized by those going on Medicare for the first time when they turn 65. It is often confused with OEP and even mistakenly referred to as such, which it shouldn’t be. IEP starts three months prior to the first day of the month you turn 65, runs through your birthday month, and lasts three additional months. During IEP you can enroll in an Advantage Plan, Part D, or Supplement. The latter can be done up to six months after the Part B effective date without going through underwriting, although there may be some restrictions.
There are two other enrollment periods, ICEP and SEP. ICEP stands for Initial Coverage Election Period and is used by those who wait until after turning 65 before enrolling in Part B. It has the same seven-month window as IEP and works almost identically. SEP stands for Special Election Period and can be used in several instances such as, but not limited to, losing insurance either voluntarily or involuntarily from an employer or company one retired from; having, losing, or first becoming eligible for PACENET, “Extra Help,” or Medicaid; being admitted to or discharged from a Skilled Nursing Facility; Another important event that qualifies is if one was lied to or misled by an agent. We have unfortunately had to help people use this to get people back on an Advantage or Supplement plan that was far better than what they were talked or tricked into enrolling in.
For questions about this or any other column or Medicare topic, call one of the offices or reach out to me personally via email, aaron@getyourbestplan.com.
Get Your Part D Reviewed
Another mistake those on Supplements make is remaining on their Part D prescription plan without having it reviewed professionally, which should be done every year. Two of the most popular plans are almost doubling their premiums while not offering better coverage. It’s also common for drug tiers on plans to be moved from 1 to 2, 2 to 3, and so on. Failure to change Part D plans can be extremely costly. Even if you didn’t buy your Supplement from The Health Insurance Store, we can review and recommend a plan for 2023, just like we do for all our active clients. If you’re interested, please contact us as soon as possible so we can get you the necessary form.
There aren’t many significant changes to Advantage Plans, but indeed some items worth mentioning. Probably the biggest news is the reduction of the MOOP by one of our three major companies. In 2021 they raised it significantly across the board on all their plans to the maximum allowable by Medicare. It stayed the same in 2022 and many members chose other carriers due to the increase. However, on a select number of plans, including what we feel is their best for 2023, it has been reduced by $3,000 and is now the lowest in the market for those that supply prescription coverage.
If you weren’t aware, there are no preexisting condition clauses with Advantage Plans. Anyone who has Medicare Parts A and B can change plans or companies regardless of their current or prior health, even those who have End Stage Renal Disease. All Advantage Plan companies must accept you and begin to pay claims the 1st day the policy goes into effect. In addition, all Advantage Plans must cover the same categories of benefits. As I’ve written on so many occasions, paying more in premium doesn’t get you any additional coverage for medical services! In fact, we will not be advising our current or potential clients to choose any Advantage Plan that will have a premium above $40 per month in 2023. If you are paying over $40 for your HMO or PPO, you should call or email us to set up an appointment and see side by side why paying more doesn’t equal more.
How will Inflation Affect AEP?
Lastly, due to inflation, we’re expecting this AEP, which begins on October 15th, to be the busiest we’ve ever had in terms of moving people from Supplements to Advantage Plans out of financial necessity. If there was ever a good time to do that, now is it because the most competitive plans have never been better in the 15 years I’ve been in the Medicare industry. For those who don’t like the thought of leaving a Supplement, there is some good news. You may not have to as it appears one of the biggest increases in the Social Security Cost of Living Adjustment (COLA) is going to be announced soon. It’s estimated to be from 8.5% to almost 10%. And for once, the raise will not be eaten up by a large Part B premium increase. In fact, many people believe it’s going to remain $170.10.
Thank you!
If you have any questions or concerns regarding this column topic, or would like to make an appointment for a no-cost consultation, please feel free to give us a call – we would be happy to help. I’d like to remind everyone that I do a live call-in talk show called Medicare A to Z every 1st and 3rd Monday of the month on WMBS Uniontown, 590AM and 101.1FM, from 1 to 3 PM. You can listen in on their website, wmbs590.com.
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