Medicare is a government-sponsored program designed to help eligible seniors and others pay for healthcare. Medicare Advantage plans offer an alternative to Original Medicare, which includes Part A and Part B coverage. The Medicare Advantage Open Enrollment Period is your opportunity to make changes to your plan. If you have Medicare Advantage, it’s important to understand how open enrollment works and when it takes place. Some details have changed for 2023, so staying on top of things will help you get the care you need. A financial advisor may also be able to help you stay in the know. Try using SmartAsset’s free advisor matching tool to find advisors that serve your area today.
What Is Medicare Advantage?
Medicare Advantage is another way to get your Medicare Part A and Part B coverage. Medicare Advantage plans are offered through private insurance companies and they’re sometimes referred to as Medicare Part C. These plans can provide additional coverage that you don’t get with Medicare, including:
- Prescription drug coverage (Medicare Part D)
- Dental care
- Vision care
- Wellness visits
When you enroll in Medicare Advantage, you don’t pay the same thing that you would for Original Medicare. Instead, your out-of-pocket costs are based on:
- Whether the plan you participate in charges a monthly premium (many Medicare Part C plans have a $0 premium)
- Whether the plan pays anything toward your monthly Medicare Part B premium
- Whether the plan has a yearly deductible
- Copayments and coinsurance costs
- The type of healthcare services you need and how often you use visit doctors and hospitals
- Whether you see in-network or out-of-network providers
- Yearly caps on out-of-pocket costs
How much you pay for Medicare Advantage can also depend on whether you’re also eligible for Medicaid. Medicare enrollment is based on age for most people. You’re eligible to sign up the year you turn 65 unless you’re a younger person with certain disabilities or End-Stage Renal disease. With Medicaid, on the other hand, eligibility is based primarily on income, though disability and pregnancy status are also considered.
What Is Medicare Advantage Open Enrollment?
The Medicare Advantage Open Enrollment Period begins January 1 and runs through March 31 each year. This is separate from the regular Medicare Open Enrollment Period that runs each year from October through December. Specifically, this open enrollment period is just for people who are enrolled in a Medicare Advantage plan.
During the Medicare Advantage Open Enrollment Period, you can do one of two things:
- Switch from one Medicare Advantage plan to another
- Move from a Medicare Advantage plan to Original Medicare, with or without an accompanying Medicare Part D prescription drug plan
This open enrollment period is not intended for enrolling in Medicare Part A or Medicare Part B for the first time. Nor is it designed for enrolling in Medicare Part D if you’re not currently enrolled in a Medicare Advantage plan. And you can’t use this period to switch from one Part D plan to another either. Plus, with the Medicare Advantage Open Enrollment Period, you can only make one change so it’s important to do your research beforehand.
How to Compare Medicare Advantage Plans
If you’re unhappy with your current Medicare Advantage plan but want to retain Medicare Advantage coverage, you may choose to switch plans during open enrollment. Comparing plans can help you decide which one best fits your needs.
For example, consider:
- What type of coverage do you need the plan to include (i.e. dental, vision, prescription drug, etc.)
- Whether you want to choose an HMO or PPO plan
- How much you’ll pay for premiums, deductibles, copays and coinsurance
- Whether you’ll need to get a referral to see a specialist
- Whether the plan requires you to visit in-network doctors only for non-emergency care
Remember that at a minimum, Medicare Advantage plans have to cover the same things that are covered by original Medicare.
Medicare Part A covers in-patient care at hospitals, short-term skilled nursing care, home healthcare and hospice care. Medicare Part B covers preventive services and medically necessary services, including mental healthcare and ambulance services. Neither original Medicare nor Medicare Advantage plans cover long-term care in a nursing facility but Medicaid can if you qualify.
Switching From Medicare Advantage to Original Medicare
Instead of switching Medicare Advantage plans during the open enrollment, you may choose to leave your plan altogether in favor of Original Medicare. Some of the reasons for changing from Medicare Part C to Original Medicare include:
- Changes to your plan coverage that you’re unhappy with
- An increase in plan premiums, deductibles, copays or coinsurance
- Shifting coverage needs
- Your doctor is no longer considered part of your plan’s network
Moving from Medicare Advantage to Original Medicare could save you money if you’re no longer responsible for copayments. But it’s still important to consider your overall costs. Here’s what the typical person might pay for Medicare Parts A and B in 2023:
- Part A Premium: Most people don’t have a premium for Part A but for those who do, the standard premium up to $506 per month
- Part A Deductible: $1,600 for each benefit period
- Part A Coinsurance: $0 coinsurance for days 1-60; $400 for days 61-90; $800 for days 91 and beyond
- Part B Premium: Standard premium is $164.90, though it may be higher based on income and filing status
- Part B Deductible: $226
- Part B Coinsurance: Typically 20% of the Medicare-approved amount after your deductible is met
Doing the math based on your anticipated healthcare costs and income can help you determine if it makes sense financially to switch back to original Medicare or stick with your Medicare Advantage plan.
The Medicare Advantage Open Enrollment Period is your chance to make changes to your Medicare coverage if necessary. Remember that if you have yet to enroll in Medicare, you can do so for the first time the year you turn 65. Also, keep in mind that delaying Medicare enrollment once you become eligible could result in a penalty which could increase the cost of your coverage.
Tips for Retirement Planning
- Consider talking to your financial advisor about Medicare planning and how to decide what type of coverage you might need when the time comes to enroll. Finding a financial advisor doesn’t have to be hard. SmartAsset’s free tool matches you with up to three vetted financial advisors who serve your area, and you can interview your advisor matches at no cost to decide which one is right for you. If you’re ready to find an advisor who can help you achieve your financial goals, get started now.
- Purchasing a long-term care insurance policy could make sense if you anticipate needing long-term care in retirement. You could apply for Medicaid to pay for long-term care but that might require you to spend down assets first. Long-term care insurance could help pay for those costs while preserving assets. You may also consider a hybrid policy that offers both long-term care coverage and life insurance.
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