Jim enrolled in Medicare Parts A and B at age 65, when he was in pretty good health. He decided to wait on picking up a Medigap plan, thinking he could save the money now and pick one up later during the Medicare fall open enrollment period. This was fine for a few years until Jim was diagnosed with cancer. He called our office in September desperate to learn how quickly he could sign up for a Medigap plan after the election period began Oct. 15.
Unfortunately, we had to tell him that while he could apply, he wouldn’t be approved for coverage. Actively treating for cancer will cause an automatic decline from nearly any carrier in most states.
But what about open enrollment? Didn’t that give him the opportunity to choose any plan he wanted? Well, yes, except that the fall open enrollment period doesn’t apply to Medigap plans. It only pertains to Medicare Advantage plans and Part D drug plans. So while he could enroll in any Medicare Advantage plan offered in his county, he did not have a free pass into a Medigap plan without having to answer health questions.
I can’t tell you how many times I’ve seen this financially devastate someone over the past 14 years. I feel like I shout the message from the mountaintops every day. I include information about it on my agency’s website, in its webinars, on YouTube, etc. My team covers it with every new Medicare beneficiary they talk to. And yet, the myth persists.
While Jim could have enrolled in a Medicare Advantage plan, it wasn’t a great fit for him. His oncologist didn’t participate in any of the Advantage networks, and many Advantage plans charge 20% coinsurance for chemotherapy, which Jim couldn’t really afford. There was nothing good about the situation.
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So, it’s important to understand Medicare’s election periods and what you can and can’t do during them. Here are some of the periods you should know about:
Initial Enrollment Period
You can enroll in original Medicare Parts A and B and sign up for either a Medicare Advantage plan or Part D drug plan during a seven-month window that begins three months before you turn 65.
Medigap Open Enrollment Period
This one-time window begins with your Part B effective date. You can use this period to apply for any Medigap plan in your area with no health questions asked. For people with chronic health conditions, this may be their only opportunity to get Medigap coverage without the chance of being turned down by an underwriter.
General Enrollment Period
If you miss your initial enrollment period, you can sign up for Parts A and/or B during general enrollment, which runs from January 1 to March 31 each year. Your benefits will begin the following July. Be aware that if you have not had other creditable coverage since you turned 65, you will likely pay penalties that will increase your Medicare premiums.
Medicare Advantage Open Enrollment Period
If you are enrolled in an Advantage plan and decide you don’t like it, you can go back to original Medicare and get a Part D drug plan during this period or make a one-time change to a different Advantage plan. Like the general enrollment period, this period runs from Jan. 1 to March 31.
Annual Election Period
Also called the fall open enrollment, this period is when you can enroll in, change or disenroll from a Medicare Advantage plan or Part D drug plan. Both of these types of plans change their benefits each year. Your carrier will notify you in September of the upcoming year’s changes in premiums, benefits, copays and more.
If you are unhappy with what your current plan is changing, you can use the annual election period to apply for a new plan to begin Jan. 1. Just remember, it doesn’t give you a free pass into a Medigap plan. That’s not what it’s for.
Understanding Medicare is a daunting task for nearly everyone, but it’s even tougher when all your life your employer has chosen your health insurance for you. Now you have to choose your Medicare coverage options yourself. If you feel overwhelmed, take a deep breath, and know that you are not alone.
Learning the ins and outs of Medicare takes time, but putting in a few hours of research can help you avoid missteps, such as assuming you can sign up for a Medigap plan at any time and be certain to get approved. Choose the coverage upfront that you want to have if the worst happens. Enrolling in coverage that you understand well will eliminate unnecessary financial surprises down the road.