Updated: Feb 12
Depending on the coverage path a Medicare recipient takes, the Medicare annual open enrollment period (AEP) period presents very different opportunities. I refer to the two coverage paths as: Medicare/Supp/PDP and Medicare Advantage
Medicare/Supp/PDP combines three coverages-- Traditional Medicare (claims paid by the federal government), a Medicare Supplement plan (approved private insurance company plans) and a standalone prescription drug plan (also approved private insurance company plans). There are no or few out of pocket costs for medical care, except the copays and coinsurance required as part of the prescription coverage plan.
Medicare Supplement plans pay the 20% left over after Traditional Medicare pays its 80% share. This is important because Traditional Medicare does not have an out of pocket maximum. While your share is only 20%, a $1million medical bill would leave you paying $200,000. The Medicare Supplement handles this 20% balance on claims. Other benefits are sometimes attached to Medicare Supplement plans to attract new customers and retain existing ones.
Medicare Advantage plans provide full medical and prescription coverage that meets Medicare standards. These plans makes use of a doctor and hospital network and involve out of pocket costs for benefits.
Medicare Advantage plans usually do not have a deductible, but they do have copays (A fixed amount of a service, like $20 for a doctor visit.) and coinsurance (Bills split 80/20 with the insurance company. Your share is always the lower percentage.) These are authorized by Part C of Medicare and are provided by insurance companies whose plans have met Medicare standards. You out of pocket expenses (excluding monthly premiums) are capped at a specific amount per year called the out of pocket maximum. Should you ever pay out an amount equal to the out of pocket maximum the insurance pays your covered service for the remainder of the calendar year.
Should Medicare Clients Change Plans?
Unless a plan has been discontinued by the insurance company or the insured person has moved, Medicare plans automatically renew by doing nothing. Often, there is no reason to use the annual open enrollment period to change Medicare plans. And there are some limitations on a person’s ability to switch between plans. (See: Can You Change Your Medicare Supplement Plan?)
The Medicare Advantage insurance market has evolved over the years to add new and often innovative plan types and insurance companies. If you want to add benefits, are unhappy with your current plan’s benefits, want a particular doctor who’s not in network, or want to lower your out of pocket costs—it makes sense to consider a change. As an independent broker, I can help you through the complexity at no charge to you.
When a person does desire a change, the Medicare Annual Enrollment Period (AEP, October 15-December 7) is the time to do so. This AEP is to enroll in calendar year plans that begin January 1.
In order to provide my clients the full range of options, I am an independent broker representing the major insurance companies in Colorado. I do not charge clients for my brokering work. Rather, I am paid a commission by the insurance company when I sell a plan. There is no cost, no risk and no pressure when you call me to get acquainted and find out how I can help. I seek first to understand you and your needs, and then to help you decide among available insurance solutions.