Medicare Open Enrollment Guide - Investopedia

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Medicare provides health care coverage for many Americans over the age of 65. An estimated 63.3 million people were enrolled in Medicare Part A or B, while another 26.7 million had a private Medicare Advantage plan as of July 2021. The annual Medicare open enrollment period offers an opportunity for recipients to make updates to their coverage. Knowing when the Medicare open enrollment window opens and closes is important for managing coverage year to year.

Key Takeaways

• Medicare provides health care coverage for eligible people age 65 and older.
• The Medicare open enrollment period provides an opportunity to make changes to existing Medicare coverage. It runs from Oct. 15 to Dec. 7 for 2021.
• Individuals enrolled in a Medicare Advantage plan have a separate open enrollment period.
• Any changes made during the fall open enrollment period take effect Jan. 1 of the following year.

Medicare Basics

Medicare is a federal program that offers health care coverage to seniors age 65 and older and younger people with certain qualifying health conditions or disabilities. The type of benefits you're eligible for can depend on which type of Medicare coverage you have.

• Medicare Part A. Medicare Part A covers inpatient care in a hospital, skilled nursing facility or nursing home care that's not required on a long-term basis, hospice care, and some home health care.
• Medicare Part B. Medicare Part B covers doctor visits for preventive and medically necessary services, as well as ambulance services, durable medical equipment, and participation in clinical trials.
• Original Medicare. Original Medicare consists of both Medicare Parts A and B coverage.
• Medicare Advantage (Medicare Part C). Medicare Advantage plans are an alternative to Original Medicare, offered by private insurance companies in accordance with Medicare guidelines. What they cover and what you'll pay can vary based on the plan.
• Medicare Part D. Medicare Part D provides prescription drug coverage. You must have Medicare Part A, Part B, Part C, or Original Medicare to enroll in Medicare Part D.
• Medigap. Medigap or Medicare Supplement Insurance is sold by private companies and covers some of the costs that Original Medicare doesn't.
  

Important

Medicare does not cover long-term custodial care in a nursing home facility, though Medicaid can in some instances.

What Is Medicare Open Enrollment?

Medicare open enrollment is a designated window of time each year when individuals can make changes to their Medicare coverage.

Open enrollment is primarily for people who already have Medicare. New applicants should sign up during their initial enrollment period, which starts three months before they turn 65 and ends three months after the month they turn 65. If they miss their initial enrollment period, they can sign up during open enrollment.

The fall open enrollment period for Medicare begins Oct. 15 and runs through Dec. 7 in 2021. This enrollment period is open to people who are covered by:

• Medicare Part A
• Medicare Part B
• Original Medicare (which includes both Medicare Part A and Part B)

A separate Medicare open enrollment period applies to people who are covered by a Medicare Advantage plan (Medicare Part C). The open enrollment period for Medicare Advantage plans runs from Jan. 1 to March 31 each year.

Note

Changes made during fall open enrollment for Original Medicare recipients take effect on Jan. 1 of the following year. Medicare Advantage open enrollment changes take effect on the first day of the month after your request is received.

What Can You Change During Medicare Open Enrollment?

During the Medicare open enrollment period, there are a number of changes you can make to your existing coverage.

Specifically, you can use the Medicare open enrollment window to:

• Switch from Original Medicare (Part A and B) to a Medicare Advantage plan (Medicare Part C)
• Switch from a Medicare Advantage plan to Original Medicare
• Change from your existing Medicare Advantage plan to a different one
• Enroll in Medicare Part D prescription drug coverage
• Change your existing Medicare Part D drug coverage to a different plan
• Remove Medicare Part D coverage

If you have a Medicare Advantage plan, you can switch plans during the open enrollment period that extends from Jan. 1 to March 31. During this time, you could also opt to switch to Original Medicare and enroll in Medicare Part D.

Original Medicare vs. Medicare Advantage

One of the biggest questions you might have during open enrollment is whether it makes sense to choose Original Medicare or a Medicare Advantage plan. Understanding the coverage options and costs can help with deciding which one makes more sense.

Here's an overview of how the two compare.

Original Medicare vs. Medicare Advantage Plans

Original Medicare

• Allows you to use any doctor, hospital, or health care provider that is enrolled in Medicare and accepting new Medicare patients.

• Includes both Medicare Part A and Part B coverage.

• No need to choose a new primary care doctor, and referrals are generally not required to see a specialist.

• Generally means paying a deductible and copays or coinsurance, along with premiums for Medicare Part B.

• Medicare Part D coverage is not included.

Medicare Advantage

• Typically requires you to use doctors, hospitals, or health care providers that are in-network. Visiting out-of-network providers may trigger a fee.

• Plans must cover the same things that are covered by Medicare Parts A and B.

• You may need a referral to see a specialist.

• Out-of-pocket costs vary by plan, though plans may cap what you'll need to pay annually.

• Most plans include Medicare Part D coverage for drugs.

When comparing Original Medicare and Medicare Advantage plans, it's important to consider what's covered and what you'll pay. Most people do not pay a premium for Medicare Part A coverage. The standard premium for Medicare Part B in 2021 is $148.50, though your premium may be higher based on your income.

Both Parts A and B have deductibles and coinsurance. For Part A they are as follows:

• $1,484 deductible for each benefit period
• Days 1-60: $0 coinsurance for each benefit period
• Days 61-90: $371 coinsurance per day of each benefit period
• Days 91 and beyond: $742 coinsurance per each "lifetime reserve day" after day 90 for each benefit period (up to 60 days over your lifetime)
• Beyond lifetime reserve days: all costs

For Medicare Part B deductibles, you pay $203. After your deductible is met, you typically pay 20% of the Medicare-approved amount for most services including inpatient care, outpatient therapy, and durable medical equipment.

What you'll pay for a Medicare Advantage plan (Medicare Part C) depends on the plan you choose. Most Medicare Advantage plans have a $0 monthly premium, but not all do. The amount you pay for deductibles, copayments, and coinsurance can also vary.

The price of Medicare Part D drug coverage depends on the plan and your income.

Important

Original Medicare and Medicare Advantage plans generally don't cover you outside the U.S., though you may be able to get supplemental coverage if you plan to travel or live abroad.

How to Choose a Medicare Advantage Plan

If you're interested in a Medicare Advantage plan, rather than Original Medicare, you can choose from one of the following:

• Health Maintenance Organization (HMO) plans
• Preferred Provider Organization (PPO) plans
• Private Fee-for-Service (PFFS) plans
• Special Needs Plans (SNPs)

Less common types of Medicare Advantage plans include HMO Point of Service plans and Medicare Medical Savings Accounts (MSA) plans. The main difference between all these plans is in whether you're able to see out-of-network providers, whether a referral is required to see a specialist, and how much you'll pay.

When comparing Medicare Advantage plans, you'll want to consider what doctors are available, how much you'll pay out of pocket, and what benefits are included. Medicare offers a plan finder tool that can help you search for and compare Part C plans.

If You Miss Medicare Open Enrollment

If you miss the Medicare open enrollment period you generally can't make any changes to your coverage until the next one rolls around. There are, however, some exceptions. Special Enrollment Periods (SEP) allow you to update your coverage under certain conditions. You may qualify if you:

• Relocate to an area that isn't in your current plan's service area
• Relocate to an area that offers new coverage options for your current plan
• Move into or out of a skilled nursing care facility
• Are released from jail
• Move back to the U.S. after living outside the country
• Leave coverage from an employer or COBRA coverage
• Dropped your coverage in a Program of All-Inclusive Care for the Elderly
• Were but no longer are longer eligible for Medicaid
• Are enrolled in a Medicare Advantage plan or Part D plan that isn't renewed
• Are eligible for both Medicaid and Medicare
• Qualify for the Extra Help program to pay for Medicare Part prescription drug coverage

Those are just some of the situations in which you may be eligible to change your Medicare plan outside of the open enrollment period. You can learn more about special enrollment periods on the Medicare website.

During the Medicare open enrollment period, you can make changes to your current Original Medicare coverage. Open enrollment runs from Oct. 15 to Dec. 7. A separate Medicare open enrollment period (Jan. 1 to March 31) applies to people in private Medicare Advantage plans. If you miss your open enrollment period, you'll generally have to wait until the next ear to make changes, although there are some exceptions.

Medicare Open Enrollment FAQs

What Is Medicare Open Enrollment?

Medicare open enrollment is a window of time in which Medicare recipients can make changes to their coverage. Medicare open enrollment begins Oct. 15 and runs through Dec. 7 each year.

Is There a Grace Period for Medicare Open Enrollment?

Generally, no. If you miss the open enrollment period you'll usually have to wait until the next one to make changes to your Medicare coverage. You may, however, be able to update your coverage at other times of year if you qualify for a Special Enrollment Period.

When Can I Enroll in Medicare?

You can enroll in Medicare for the first time in the year you turn 65. The Medicare initial enrollment period begins three months before your 65th birthday, covers the month of your 65th birthday, and lasts for three months after your birthday month.

The Bottom Line

During the Medicare open enrollment period, you can make changes to your current Original Medicare coverage. Open enrollment runs from Oct. 15 to Dec. 7. A separate Medicare open enrollment period (Jan. 1 to March 31) applies to people in private Medicare Advantage plans. If you miss your open enrollment period, you'll generally have to wait until the next ear to make changes, although there are some exceptions.

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