Medicare Open Enrollment: Avoid These 5 Mistakes
And ensure you always have the right coverage year after year.
Every year when the fall season rolls around, it’s also once again time for Medicare’s Open Enrollment Period. This period between October 15 and December 7 offers all Medicare beneficiaries a chance to reevaluate their current coverage and make certain changes should they choose.
For those that do make a change, that new coverage will go into effect on January 1 of the upcoming year.
On the other hand, if you know your plan is continuing in the upcoming year, and have decided not to make a change, there isn’t anything you’re required to do during the Open Enrollment period. In this case, by not taking any action, your plan will renew automatically and your coverage will continue for the next year.
It’s worth noting, however, that landing on the decision to not make a change simply because you’d rather not deal with reviewing what’s available or you feel your current plan is good enough could prove a costly mistake.
The worst-case scenario is finding yourself shocked by an out-of-pocket expense or surprised by a different copayment amount for your covered services.
Here, we’ll cover 5 mistakes to avoid during the Medicare Open Enrollment Period and how to prevent them, so that you can feel confident in your coverage for the upcoming year.
Important: Understanding the Open Enrollment Period
Before jumping into our list of 5 mistakes, it’s worth noting that failing to understanding what takes place during the Open Enrollment Period and what your options are could prove its own costly mistake during this time. So, let’s start with some background.
There are five options available to you during the Medicare Open Enrollment Period:
Switch to a Medicare Advantage plan from your Original Medicare coverage.
Switch to Original Medicare coverage from your Medicare Advantage plan.
Switch from your current Medicare Advantage plan to a different Medicare Advantage plan.
Switch from your current Medicare Part D plan to a different Medicare Part D plan.
Enroll in a Medicare Part D plan if you did not do so during your Initial Enrollment Period (late enrollment penalty may apply).
Also, note that it’s common for Original Medicare beneficiaries to pair their coverage with a standalone Part D prescription drug plan and/or a Medicare Supplement plan (Medigap). However, keep in mind that Medigap plans have nothing to do with the Open Enrollment Period.
Now that we have a good understanding of Medicare Open Enrollment, we’ll introduce the 5 mistakes you’ll want to avoid as you navigate this period.
1. Ignore the Entire Enrollment Period
The easiest option you have during the Medicare Open Enrollment Period is to ignore it altogether. However, being the easiest doesn’t make it a smart choice. This is also the option that will end up being the most costly to you.
It’s a common misconception that just because your Medicare Advantage plan or Medicare Part D plan covered you at a suitable cost this year that everything is going to remain the same in the years moving forward.
There are a number of changes that could affect your plan’s premium, deductible, copayment, or coinsurance amounts. Additionally, changes can occur to factors like your plan’s covered services and network (doctors, healthcare providers, pharmacies, etc.).
It’s also important to note that even if there are no significant changes to your current plan, it can be worthwhile to review your options. The Medicare Open Enrollment Period inspires lots of competition between insurance providers eager to attract new enrollees.
The specifics of these Medicare Advantage plans and Medicare Part D drug plans can vary quite a bit from one to the next to meet the different needs of a variety of beneficiaries. New plan options become available every year. You may find a new plan that covers everything you need at a better cost.
Helpful Tip: An online Medicare plan compare tool can help you get a sense of all the options available to you in your area. Find one that is unbiased, user-friendly, and free of charge. By entering in your plan requirements, you can know for certain which plan is best for you.
Using a plan compare tool can help you easily shop all the available plans in your area. We recommend the one offered by eHealth. Easy to use, thorough, and has a great reputation.
2. Assume Your Current Plan Is Your Best Option
Your options for when it comes to Medicare Advantage plans and Medicare Part D drug plans will depend on the area in which you live. Even if you did a good job of researching and comparing plans in your area to find your current plan, that doesn’t necessarily mean it’s still your best option.
Insurance carriers are constantly adding new plan options to the market to stay competitive and attract new customers. So, while your current plan may cover all of your needs, it’s possible that an even more cost-friendly alternative has become available that covers what you need at a lower price.
A related scenario that we see is when individuals enroll in health plans based on the recommendation of someone they know, assuming it is the best option.
While the recommendation may be in good faith, perhaps from a friend or family member that has had a positive experience, what’s most important is finding a plan that works for you.
No matter who is recommending the health plan, their medical history and current health needs are going to differ from your own. There are so many personal aspects to healthcare, it’s important that you find a plan that covers your medications, doctors, and other requirements.
Helpful Tip: A health plan recommendation from someone you know can be informative when it comes to factors like customer service and experience, but do not rely on word of mouth alone. Find a plan that meets all of your specific personal needs.
3. Assume Your Current Plan Will Stay the Same
One of the most common mistakes that we see come Open Enrollment is assuming everything about your current plan will stay the same year after year.
If you have a Medicare Advantage plan or Medicare Part D plan, your plan will send you what is known as an Annual Notice of Change. This notification will outline any changes set to take place on January 1 of the upcoming year.
These changes might affect what is covered by your plan, as well as the costs associated with your coverage. This could mean a price increase to your monthly premium or a higher deductible or copayment.
Additionally, a plan may stop coverage altogether for a certain service or prescription. If it’s one that you require then you’ll be looking at greater out-of-pocket expenses.
Helpful Tip: Monitor your mailings for any notifications from your plan, especially come the month of September. An Annual Notice of Change will detail any changes set to take place in the upcoming year. Double check to ensure that everything you need is still covered and that you can afford any changes in cost.
4. Forego Prescription Drug Coverage
This one might sound strange at first if you’re not taking prescription drugs or medications. Why would I purchase coverage for something that I don’t currently need?
After all, prescription drug plans come with a monthly premium. Why not just put it off until the time comes that I need prescription drug coverage?
The reason is important and potentially costly: a Medicare Part D late enrollment penalty. Generally, the longer that you wait to enroll in a Part D drug plan past your Medicare Initial Enrollment Period, the greater your late enrollment penalty.
Note, however, that an exception exists in this scenario. The Part D late enrollment penalty only applies to those that have gone without prescription drug coverage for a period of 63 days or more once eligible for Medicare.
So, if you have creditable drug coverage from a different source (an employee-sponsored health plan, for example), then you can postpone your enrollment in a Medicare Part D plan (or Medicare Advantage plan with prescription drug coverage) without facing a late enrollment penalty.
Helpful Tip: For those that do not take any prescription drugs or medications and don’t have creditable drug coverage through a health plan, search for a Part D plan with the lowest available premium. This way you will receive coverage at a low cost while avoiding late enrollment penalties.
Use the eHealth plan compare tool to find Medicare Part D plans with low monthly premiums in your area.
5. Ignore Your Plan’s Network
When you have Original Medicare coverage, you don’t have to worry about your plan’s network. This coverage works the same for you throughout the entire country.
For those with Medicare Advantage plans and Medicare Part D plans, however, it’s important that you’re mindful of your plan’s network.
Medicare Advantage plans and Part D plans have local networks that restrict which healthcare providers are covered. If you visit a healthcare provider outside of your plan’s network, you’ll have to pay out-of-pocket for the visit, which can get very costly.
So, in order to keep your costs low, you’ll want to choose a plan that includes all of your healthcare providers in its network. Additionally, this will allow you to keep visiting the doctors with whom you’re familiar.
Helpful Tip: Plans can change their networks from year to year. So, even if all of your doctors were included in your plan’s network for the current year, check to ensure this is true for the upcoming year, as well. Keep an eye out for notices from your plan in the month of September, detailing any changes set to take place.
Enter your doctor information and prescription drugs into the eHealth plan compare tool to find Medicare plans that have you covered.
Medicare Open Enrollment Period: Closing Thoughts
In closing, if we were to highlight the common thread that runs between the 5 mistakes mentioned above, it would give us the most important takeaway: Don’t be afraid to make a change.
Of course, it’s always easier to just stick with your current plan and not bother with reviewing your coverage or shopping new options, but as we’ve covered here, choosing inaction can be a big mistake.
Plans can change from year to year. Meanwhile, new plan options become available every year. Taking a look at what’s available can result in better coverage at more affordable costs.
At the very least, you should always review your current coverage. Read any notices you receive from your plan, make sure coverage is continuing into the next year, check for any cost or coverage changes, etc.
While it does take a little effort, you’ll feel much better and more confident knowing you’re all set for the upcoming year.
Up Next: Getting Ready for Open Enrollment
Medicare: Joining a Health or Drug Plan