Why Is An Annual Open Enrollment Review Important?

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Each year, insurance companies can make changes that impact your coverage and what you pay for it. With Part D Prescription Drug coverage in particular, a change could mean the difference between paying a few bucks for a prescription and shelling out hundreds each month. For example, your insurance company could drop a drug you take from its formulary — a list of drugs covered in the plan and how the plan covers them — or move it to a different tier. 

But often, people will switch to a different Part D Prescription Drug plan thinking they’ll save money because its premium is lower. The cost of one month’s worth of one drug that’s not on your plan’s formulary could exceed an entire year’s worth of your monthly premiums. This is a common mistake, but the plans with the lowest premiums are not always the better financial choice.

 

Understanding Medicare Special Enrollment Periods

Medicare offers Special Enrollment Periods (SEPs) to provide flexibility for individuals who experience specific life events. Unlike the General Enrollment Period, which occurs annually, SEPs allow you to enroll in or make changes to your Medicare coverage outside of the usual enrollment windows. Here are some key situations that qualify for a Special Enrollment Period:

1. Change in Employment

• If you or your spouse are still working and have health insurance through an employer, you can enroll in Medicare Part B without a late penalty when this coverage ends.

2. Moving to a New Location

• If you move to a new area that isn’t in your current plan’s service area, you can switch to a new Medicare Advantage Plan or Part D plan that covers your new location.

3. Changes in Your Medicaid or Extra Help Eligibility

• If you gain or lose eligibility for Medicaid or Extra Help (a program to assist with Medicare Part D costs), you qualify for a SEP to make changes to your Medicare coverage.

4. Leaving Incarceration

• If you’re released from prison, you have a SEP to enroll in Medicare.

5. Losing Other Creditable Drug Coverage

• If you lose your drug coverage that is at least as good as Medicare’s standard prescription drug coverage, you can use a SEP to enroll in a Part D plan.

6. Enrollment in or Disenrollment from a Medicare Advantage Plan

• Certain circumstances, such as your Medicare Advantage Plan leaving your area, allow you to switch back to Original Medicare or join a different Medicare Advantage Plan.

How to Use Your SEP

If you qualify for a SEP, contact Medicare or your Medicare plan provider to understand your options and ensure timely enrollment. This can help you avoid gaps in coverage and potential late enrollment penalties.