As the Medicare Annual Election Period comes to a close in 2017, many Medicare beneficiaries across America will be settling into new healthcare plans beginning in January of 2018. While it’s a great thing that we have choices with Medicare plans, people do occasionally make a Medicare Advantage plan choice that they later regret.
Fortunately, there is a disenrollment period every winter that lets you make a switch back to Original Medicare if you find yourself in a Medicare Advantage plan that you are unhappy with. Let’s review what Medicare Advantage plans are and how they work before we discuss using the Disenrollment Period.
What are Medicare Advantage Plans?
Medicare Advantage plans are a type of private Medicare insurance that beneficiaries can enroll in instead of Original Medicare. They are often very attractive to retirees because Advantage plans often have significantly lower premiums than Medigap plans.
However, these plans are network-based. The two primary types of networks are Health Maintenance Organizations (HMO) or Preferred Provider Organizations (PPOs). HMO networks generally require you to seek treatment only from providers that are in the network. There is no coverage outside the network except in emergencies. PPO plans allow you to treat with doctors both in and out of the network. Treatment outside the network, however, costs more.
Before enrolling in any Medicare Advantage plan, you should always check to see if your doctor is in the network. You may also want to check to see if your favorite hospitals are in the network too.
Once you are enrolled, you are generally locked into that Medicare Advantage plan for the calendar year. This occasionally creates problems if you didn’t realize this before you signed up for the plan. It’s one of the most common reasons that people disenroll from Medicare Advantage plans.
Copays and Coinsurance on Medicare Advantage plans
Another factor about Medicare Advantage plans is that you will have copays for your services as you go along on the back end. Consult your plan’s Summary of Benefits before enrolling to see that are comfortable with what you will be expected to pay for various services.
It’s not uncommon to pay for $40 – $50 for a specialist visit or $200/day for a hospital stay for up to 7 days. Some services, such as chemotherapy, might cost you 20% up to the plan’s Out of Pocket maximum. You want to be comfortable that you can afford to pay these amounts. Some people don’t realize this until after they have enrolled, and then they find themselves feeling upset at all the small charges as you go along.
Many plans also include a built-in Part D drug plan. While this is very convenient, it’s important to check the plan’s formulary before you enroll.
You’ll want to make sure that it includes all the medications you take at reasonable copays that you can afford. If you have existing Part D drug coverage, you will be booted out of that plan when you enroll in a Medicare Advantage plan that includes drug coverage. You cannot have more than one Part D plan in force at any time.
Sometimes January rolls around and a new Medicare Advantage plan member will realize that one of their important doctors are not in the network or the formulary doesn’t include a critical medication. This used to cause quite a panic, because no one wants to be locked into a plan for 12 months if they can’t see an important doctor on that plan or if the plan won’t cover certain medications.
The Medicare Advantage Disenrollment Period was created to give beneficiaries a means of returning back to Original Medicare without having to wait all the way until the next Annual Election Period in the fall.
The Medicare Advantage Disenrollment Period
The Medicare Advantage Disenrollment Period runs every year from January 1st until February 14th. During this six-week window, you can disenroll from your Part C Medicare Advantage plan for any reason. Medicare will automatically re-enroll you back into Original Medicare Parts A and B. There are no penalties for disenrolling.
Since you may lose your drug coverage that was inside your Medicare Advantage plan, you will also have an opportunity to enroll in a standalone Medicare Part D plan to work alongside your Original Medicare.
However, in most cases, leaving your Medicare Advantage plan does not necessarily create a free pass back into a Medicare Supplement plan. In many states, you will have to complete a new Medigap application in which you will answer health questions. It’s up to the insurance company whether they will accept or decline you. It’s a good idea to apply for the Medigap plan first and make sure you can obtain coverage before you give up your Medicare Advantage plan.
One exception would be if this was the very first time that you had every tried a Medicare Advantage plan. If it is your first time to try Medicare Advantage, and you disenroll within 12 months of the effective date of that plan, you can return to Original Medicare and a Medigap plan under federal guaranteed-issue rules.
If you had a prior Medigap plan prior to enrolling in Medicare Advantage, you must return to that same plan. If you were new to Medicare and you tried Medicare Advantage right out of the gate, then you can choose any Medigap plan. This exception can only be used once. The next time you try a Medicare Advantage plan, you cannot use the guaranteed issue window again to return to Medigap.
Always be sure to check with your Medicare insurance broker to find out what you can expect before using the Medicare Advantage Disenrollment window to return to Medicare. He or she can inform you of the election periods you are eligible for and help you decide on plan options that make sense for your needs and your budget. Your broker can also help you select a standalone Medicare Part D drug plan if you will be losing Part D coverage that was inside your Medicare Advantage plan.