Did you know that in 2020 Medicare insured over 61 million people?
The rules for this program are complicated. You’ll find that what you don’t know can hurt you in the long run.
People can enroll in Medicare during specific months. Each enrollment period has different rules. This includes the open enrollment period (OEP) and the annual enrollment period (AEP).
It’s important to know the difference between OEP and AEP so you can get the best coverage. If you don’t enroll during the right period, you may miss out for a whole year.
The Centers for Medicare and Medicaid Services (CMS) run the Medicare program. The Social Security Administration handles enrollment into the program.
Types of Medicare Plans
Medicare is a federally funded health program for people age 65 and older. The program also offers coverage for some people who are younger with disabilities.
There are different enrollment periods for the different types of Medicare coverage. There are four parts to Medicare.
Medicare Parts A and B are called Original Medicare. These were the first two parts of Medicare signed into law in 1965. Medicare Part A provides coverage if you have to be admitted to the hospital.
Medicare Part B is outpatient insurance. It helps cover doctor visits and emergency room care. Medicare Part C is also called Medicare Advantage. These policies combine the benefits of Parts A and B.
Original Medicare does not offer prescription drug benefits. Medicare Part D provides benefits for prescription drugs.
Medicare Part C and Part D are sold by private insurance companies. The companies have a contract with Medicare and must follow Medicare rules.
Insurance companies must offer you Medicare Part D when you are first eligible for Medicare. But they can deny coverage if you apply for a policy later.
Medicare Advantage Plans are specific to geographical areas. This means that insurance companies can decide where they will offer Advantage Plans. These plans can also charge different benefits or out-of-pocket costs.
Private companies can also sell Medicare Supplement Plans called Medigap. These plans supplement Original Medicare coverage.
You can get the most from your health plan but understanding your benefits. Medicare offers preventive services, including vaccinations and health screenings.
Medicare Advantage Plans may offer extra discounts for hearing aids, gym memberships, or vitamins. Many Advantage Plans use a network of providers. You will pay less when you stay in the Plans network.
When Can Your Enroll in Original Medicare?
There are several times when you can enroll in Original Medicare. The first time is called your initial enrollment. This is based on your 65th birthday.
Your initial enrollment period is seven months around your 65th birthday. For example, you turn 65 on May 15. You would be eligible from February 1 to August 31. This means you have seven months to enroll in Medicare when you turn 65.
People who receive Social Security benefits before age 65 automatically receive Medicare. Everyone else must enroll on the Social Security website.
You may pay a monthly penalty on your Medicare premium if you don’t enroll when you are first eligible. People with insurance through a qualified employer can delay enrolling in Original Medicare.
In this case, you qualify for a Special Enrollment Period (SEP). Medicare has several rules that determine if you qualify for a SEP. These rules also determine when the SEP is available.
You have one option if you miss your initial enrollment period. You can join Original Medicare during the general enrollment period. This happens each year from January 1 to March 31.
What’s the Difference Between OEP and AEP?
OEP and AEP are enrollment periods for Medicare Parts C and D. To enroll in these parts you must first have Original Medicare.
You are eligible to enroll in Medicare Parts C and D during your initial enrollment. You do not pay a penalty if you choose to delay joining these parts until later.
Medicare OEP and AEP refer to two different enrollment periods.
You can change your Medicare health plans during the Medicare annual enrollment period. Medicare AEP happens every year from October 15 to December 7.
Each year insurance companies evaluate their Medicare Advantage Plans. They can make changes that take effect on January 1.
You can make changes to your Medicare health plans during AEP to better meet your needs. These changes include:
- Join a Medicare Advantage Plan
- Move from Medicare Advantage back to Original Medicare
- Switch Medicare Advantage Plans
- Switch Medicare Part D plans
- Switch from Medicare Advantage to a Medigap plan
- Join a Medicare Part D Plan
The new policy takes effect by January 1 as long as the plan gets the paperwork by December 7. Medicare has a Find a Medicare Plan website where you can evaluate the choices available in your area.
Medicare Advantage Plans have a unique open enrollment period. This happens from January 1 to March 31. This is the same calendar period as general enrollment for Original Medicare.
The Medicare Advantage OEP is only for people who currently have an Advantage Plan. In other words, you cannot buy an Advantage Plan during this period.
You allowed only one change during the Medicare OEP. You can switch from one Advantage Plan to another in your area. You may also drop Medicare Advantage and switch back to Original Medicare.
Watch for Your Medicare Advantage Plan Changes
Keep watch for changes your insurance company makes to your Medicare Advantage Plan. Companies are allowed to increase premiums and change benefits every year.
You may also find the company will make changes to your out-of-pocket expenses. You may save money and get the best coverage for your situation when you review the changes each year.
You must know the difference between OEP and AEP to get the most from your Medicare plan.
Did you find this information helpful? Be sure to check out our other Medicare articles. They will help you get the most from your federal health insurance plans.