Medicare Advantage Do-Over & Open Enrollment
Here’s what you need to know about open enrollment and the Medicare Advantage do-over.
Presented by Ben Murphy, CPA, PFS™, CPFA® :
We’ve all made decisions we wish we could change. If you enroll in Medicare Part C, also known as Medicare Advantage, during the annual fall open enrollment and now doubt whether it’s the right health insurance for you, you may have the opportunity to complete a do-over. The Medicare Advantage open enrollment period, January 1–March 31, 2023, is a separate enrollment period that allows you to reevaluate your Medicare Advantage choice.
As with most Medicare matters, the details about the Medicare Advantage open enrollment period take some time to understand. A general review of Original Medicare (Part A and Part B) and Medicare Advantage (Part C) is a good starting point.
Why Switch Plans?
Several factors could prompt you to rethink your choice of Medicare Advantage plans. One of the primary reasons is learning that your doctors and hospital left the plan’s coverage network. Discovering that the Medicare Advantage plan’s formulary does not cover your prescriptions is another common reason.
Understanding the Basics
Signing up for Part A and Part B is the first step in Medicare enrollment. Together, Part A and Part B are known as Original (or Traditional) Medicare. Since its inception in 1965, Medicare has always had cost sharing. Medicare covers 80 percent of health care charges incurred, and individuals pay the 20 percent balance.
For most people who are not disabled, the first opportunity to enroll in Medicare is their seven-month initial enrollment period. The seven-month period begins three months before an individual’s 65th birthday, includes the month of the 65th birthday, and ends three months after the 65th birthday. Individuals who continue to have employer-provided health insurance can enroll in Medicare during an eight-month special enrollment period that begins the month after employer-provided coverage ends. After you enroll in Part A and Part B, you may choose to receive Medicare coverage through Part C, Medicare Advantage.
Medicare Advantage is a managed care alternative to Original Medicare. Private health insurance companies offer several types of managed care plans, including health maintenance organizations, preferred provider organizations, and private fee-for-service plans. The Centers for Medicare & Medicaid Services approve the private health insurance companies’ Medicare Advantage plans, and you don’t forfeit any Medicare rights or protections if you choose Part C instead of Part A and Part B. You must, however, continue to pay your Part B premium even if you choose a Medicare Advantage plan. (Part A will be premium free if you paid FICA tax for at least 10 years during your career.)
Medicare Advantage plans are popular because they offer benefits, such as dental and vision coverage, that Original Medicare does not. Almost all Medicare Advantage plans include a Part D prescription drug benefit. As a result, a separate stand-alone Part D plan usually isn’t needed.
Medicare Advantage versus Medigap. Be careful not to confuse Medicare Advantage plans with Medigap plans. Although both are identified by alphabet letters and offered by private health insurance companies, Medigap plans have a different purpose: supplementing the 20 percent cost sharing that falls to individuals under Original Medicare. You don’t need a Medigap plan if you choose Medicare Advantage.
Open Enrollment Opportunity
During what effectively is a Medicare Advantage do-over window, January 1–March 31, 2023, you can:
- Switch to a different Medicare Advantage plan
- Move from Medicare Advantage to Original Medicare Part A and Part B
- Enroll in a stand-alone Part D prescription drug plan if you move to Original Medicare Part A and Part B
The Medicare Advantage do-over window does not allow you to make any of the following changes that can be made during the fall open enrollment period:
- Complete a new Medicare enrollment (unless you are in your initial or special enrollment period)
- Switch from Original Medicare to Medicare Advantage
- Enroll in a stand-alone Part D prescription drug plan (unless you are moving to Original Medicare from Medicare Advantage)
- Switch from a stand-alone Part D prescription drug plan to a different stand-alone plan
You may change your coverage only once during the Medicare Advantage open enrollment period. In other words, you can’t select one Medicare Advantage plan now and then switch to another before March 31. New coverage will become effective on the first day of the first full month following your decision. If you select a new Medicare Advantage plan in February, for example, coverage will begin in March.
Help with Your Medicare Decisions
Because retirement health care is such a significant part of your overall financial health, navigating Medicare choices can feel daunting. Please feel free to contact us if you have questions or would like additional resources to help guide your decisions.
This material has been provided for general informational purposes only and does not constitute either tax or legal advice. Although we go to great lengths to make sure our information is accurate and useful, we recommend you consult a tax preparer, professional tax advisor, or lawyer.
Ben Murphy is a financial advisor located at Global Wealth Advisors 601 N. Marienfeld, Suite 322, Midland, TX 79701. He offers securities and advisory services as an Investment Adviser Representative of Commonwealth Financial Network®, Member FINRA / SIPC, a Registered Investment Adviser. Financial planning services offered through Global Wealth Advisors are separate and unrelated to Commonwealth. He can be reached at (325) 207-5772 or at email@example.com.
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