Each year, the Medicare Annual Election Period (AEP) runs from October 15th through December 7th.  This is a special time frame when Medicare beneficiaries have the option to make changes to certain types of Medicare health insurance plans.  Any changes made during AEP will take effect January 1st of the upcoming year (January 1st, 2020 in this case).

 

Insurance carriers are required to provide a detailed update each year by September 30th regarding your existing Medicare Advantage Plan or Part D Prescription Drug Plan.  This notice is called the Annual Notice of Change (ANOC).  Since these Medicare insurance plans run on a calendar year basis, there are usually some sort of changes in plan benefits and features from year-to-year.  This is exactly why the Medicare AEP exists. It provides you with the “option” to change your plan, if it’s beneficial.

 

Here are some of the scenarios that can take place during AEP:

 

Take No Action

If you’re happy with your plan and wish to accept the new plan provisions for next year, no action is required.  Your plan will automatically be renewed as of January 1st.

 

Change your Part D Prescription Drug Plan

If you feel your stand-alone Part D prescription drug coverage is no longer suitable for you, a plan change may be appropriate.  Your current Part D plan might no longer cover your particular list of prescriptions as well as before (i.e. formulary changes)…OR…you may have several new prescriptions causing you to question whether you’re still in the right plan…OR…the plan premium is increasing more than you’d like.  Regardless, you can switch to another Part D drug plan during AEP — with your current insurance carrier, or another carrier. 

 

Change your Medicare Advantage Plan

If you feel your Medicare Advantage plan coverage is no longer suitable for you, a plan change may be appropriate.  Since many Medicare Advantage plans include both medical and drug coverage, you might consider a plan switch during AEP if the medical and/or drug coverage changes to your detriment.  It could be a drug formulary change, or even one or more of your medical providers are no longer in-network. Additionally, the medical benefits can be impacted each year. For example, certain medical services may have increased copayments, or the plan’s medical maximum out-of-pocket limit may increase to a level that is out of your comfort zone.  And of course, a plan premium increase can affect the affordability of the plan.

 

Switch from Original Medicare to Medicare Advantage 

When you have Original Medicare and a Medicare Supplement Insurance Plan (Medigap), you use Medicare Part A (hospital) and Part B (medical/outpatient) as your primary coverage…and then your Medigap plan as your supplemental plan for medical services.  And you usually will also have a stand-alone Part D drug plan, unless you have creditable prescription drug coverage from another source (i.e. VA benefits). What if you aren’t happy with your plan coverage, pricing, or have other issues with the plan?

You can switch entirely from Original Medicare to Medicare Advantage during AEP.  If you switch to a Medicare Advantage plan that includes Part D coverage in this scenario, you will automatically be disenrolled from your existing stand-alone Part D drug plan with a January 1st effective date.  However, you will still need to request cancellation of your existing Medigap plan as of January 1st. NOTE: You cannot switch to a Medicare Advantage plan if you have end stage kidney failure (ESRD).

 

Switch from Medicare Advantage to Original Medicare

In this reverse scenario, you would first need to see if you can be approved medically for a Medicare Supplement (Medigap) Plan.  In this situation, insurance carriers are often allowed to ask you health history questions, and could deny you from purchasing the plan.  If you get the approval for a January 1st start date, then you know you can enroll in a stand-alone Part D prescription drug plan during AEP (do so no later than December 7th).  Everything will start January 1st, and your existing Medicare Advantage plan will automatically be cancelled, due to the stand-alone Part D plan enrollment.

 

We have a complete summary of the Parts of Medicare on our website. Click here to learn more or contact us for direct support.

 

Reference Links

www.medicare.gov

Joining a Health or Drug Plan 

Annual Notice of Change (ANOC)

 

Neither Medicare Mindset LLC nor its agents are connected with the Federal Medicare program.

Photo by Jomar on Unsplash

We’ve heard it time and time again: “I dropped off my paperwork in the Social Security office drop box. Why is there no record of my forms being processed?”

This misuse of Medicare enrollment forms happens more often than you may think, which is why we highly recommend you DO NOT use the drop box option at your local Social Security office.

 

Using the drop box is not a secure way of turning in your paperwork—and your information deserves high security. When you simply drop off your paperwork with no receipt or personal connection, you put your information and your Medicare plan at risk. And weeks (even months!) may go by without any alert of an issue until it’s too late.

When you simply drop off your paperwork with no receipt or personal connection, you put your information and your Medicare plan at risk.

It’s crucial that the government receives your paperwork by the requested date, as the forms are both imperative and time-sensitive. Visit your local Social Security office, wait to be called up, and hand-deliver your forms to a real person. It may seem like an unnecessarily lengthy process, but in the end, you will actually save time. Direct handling prevents unforeseen costs…and another trip to the Social Security office.

Visit your local Social Security office, wait to be called up, and hand-deliver your forms to a real person.

This is especially important when enrolling in Medicare Part B after your Initial Enrollment Period ends.  Reference our previous blog post titled, “How to Enroll in Medicare Part B After Age 65”, which lays out the whole process.  

Questions about your Medicare forms or how to get into a great Medicare Mindset? Contact us today! We are here to help your through the process.

When you’re first eligible for Medicare, there is a 7-month Initial Enrollment Period (IEP).  Your IEP spans the three months prior to your birthday month, your birthday month, and the three months after your birthday month.  But what if you don’t plan to enroll in Medicare at age 65? Yes, you can do this…and without penalty!

Delaying Medicare enrollment beyond your IEP at age 65 can make sense for a number of reasons:

 

  • You have group health coverage from an employer that has 20+ employees.  In this case, the group health plan continues to be primary, so you don’t need to enroll in Medicare Part B (medical/outpatient).  You can enroll in Part A (hospital/inpatient) without issue, as long as you’re not contributing to a Health Savings Account (HSA).
  • You have group health coverage from your employer that has 20+ employees…AND…your younger spouse (not yet eligible for Medicare) is also covered on the plan as a dependent.  
  • Your income is high, which would cause your Medicare Part B (and Part D IRMAA) premiums to increase.  The standard Part B premium in 2018 is $134/mo with no additional amount for the Part D IRMAA…but Part B can be as high as $428.60/mo with a maximum Part D IRMAA of $74.80/mo. [See Figure 1]
  • Lastly, you may determine it would simply cost more to go fully on Medicare (regardless of income level), and it would be prudent to stick with your group health coverage while you are still working (or covered on a spouse’s employer health plan).

 

You’re probably thinking…”isn’t there a penalty to delay Medicare enrollment?”  In a vacuum, this is true…but if you’re covered by a group health insurance plan (based on your current employment or a spouse’s), you can delay enrollment in Part A and/or Part B without penalty.  And don’t let anyone tell you otherwise. Reference this directly on Medicare.gov (Should I get Parts A & B?).

 

Here’s an example…

Let’s say you’re turning 65 and covered by your employer health plan.  Your spouse is age 63, not eligible for Medicare, and doesn’t have access to other health coverage.  If you plan to keep working for a while, it would make sense to work at least to age 67. Your spouse would be 65 and eligible for Medicare at that time.

 

After reviewing options, you determine it makes sense to transition fully to Medicare.  You can choose your start date, as long as it’s within 90 days. You first need to get things setup with the government.  Medicare enrollment is handled through the Social Security Administration.

 

Here’s how to enroll in Part B after your IEP:

 

If you already have premium-free Part A (hospital) coverage…

 

    • You will need to complete two paper forms to turn into a local Social Security office.
      • Application for Enrollment in Medicare Part B (Medical Insurance) [Form CMS-40B]
      • Request for Employment Information [Form CMS-L564]

 

  • Application for Enrollment in Medicare Part B (Medical Insurance)
      • You will complete this form by yourself.
      • Complete #s 1-8, and 12.
      • A note about #1 — Your Medicare Number is the Medicare Claim # listed on your current Medicare card.  Some Medicare beneficiaries have the old card design with their Social Security Number listed on it, and some have the new card design with a randomly generated claim #.  As of this writing (Aug 2018), you can use either number.
      • A note about #12 — You must select a Part B start date that is within 90 days of your request.  And the start date will always be the 1st of the month.

 

  • Request for Employment Information
    • You will complete Section A, and your employer (someone in HR) will complete Section B.
    • Section A
      • Complete #s 1-7.  
      • A note about #4 (Applicant) — This is the person applying for Medicare coverage.
      • A note about #6 (Employee) — This is the person employed at the employer…which could be the same person listed in #4.  It would only be different if a dependent spouse is applying for Medicare when coming off their spouse’s group health plan.
    • Section B
      • The employer will complete #s 1-5, and the signature section at the bottom (All Employers section)
      • A note about #2 — It’s important the employer mark the month and year the applicant’s health coverage began with the employer…NOT with the current insurance carrier for this year.  In most cases, this date should go back to at least when the person was age 65. If not, the applicant will need to complete Form L564 for each employer they worked with since turning 65.
      • And then the employer representative will sign and date the bottom.
  • When the two forms are ready to go, hand-deliver the paperwork to a local Social Security office.
    • You DO NOT need to schedule an appointment.
    • And DO NOT leave the paperwork in their drop boxes.  Social Security offices commonly lose paperwork left in these boxes.
    • Instead, check in at the office first.  Most offices have an electronic system of checking in.  When your number is called, take the forms to the Social Security employee and inform them you wish to enroll in Medicare Part B utilizing Medicare’s Special Enrollment Period (SEP) process.  Since you are within 90 days of your requested effective date, they are required to process your enrollment.  Don’t let them tell you to come back when you are closer to your enrollment start date. You are within your right to request the enrollment, even if you are 89 or 90 days away from the start date you need.  They will stamp your paperwork and provide you a copy.
    • Within 3-4 weeks, you should receive a letter confirming your application for coverage is approved.  Your new Medicare card will arrive soon after.

 

If you have NOT already enrolled in premium-free Part A (hospital) coverage…

 

  • This process is nearly identical to the above situation.  After completing the items listed here, follow the instructions detailed above.
  • Prior to doing the two paper forms mentioned above, you will need to complete an online application for Medicare.  You can access the Medicare Only application at medicare.gov, socialsecurity.gov, or ssa.gov.  Either way, the online application ends up taking you to a Social Security site for completion.
  • The online application is pretty straightforward, though there are a few items to mention:
    • Part A — The application will not ask if you want Part A, as that is assumed.
    • Part B — The application will ask if you want Part B, so be sure to select Yes in this situation.
    • Existing health coverage — The application will ask if you are covered by a group health plan currently.  Do your best to remember when employment began and when health coverage began. If your employer already completed the Request for Employment Information form (CMS-L564), you can find those dates in Section B.
    • Remarks — At the end of the application, you have the opportunity to type in comments in a blank text box.  Make a note that you are enrolling in Medicare with a requested Part B start date of ____, and you will be turning in CMS-40B and CMS-L564 in the near future.
  • It’s important to note your Part A start date will be backdated 6 months from the month you made the enrollment request.  Keep this in mind, how this could affect your ability to contribute to a Health Savings Account through an employer group health plan.  Having any portion of Medicare prohibits you from contribution to your HSA or receiving employer funds in the account.

 

And there you have it…instructions to enroll in Part B after your Initial Enrollment Period ends.  It seems like a lot, but it’s really not. The above instructions are more detailed than you will find anywhere else.  You now have all the information and tips you need to make this go smoothly.

 

Figure 1

 

If your yearly income (MAGI: Modified Adjusted Gross Income) in 2016 was… You pay (in 2018)
Individual Tax Return Joint Tax Return Married & Separate Tax Return Part B

Monthly Premium

+ IRMAA

Part D

Monthly Premium

+ IRMAA

$85,000 or less $170,000 or less $85,000 or less $134.00 Part D plan premium + $0.00
$85,001 to $107,000 $170,001 to $214,000 N/A  $187.50      

(134.00 + 53.50)

Part D plan

premium + $13.00

$107,001 to $133,500 $214,001 to $267,000 N/A $267.90

(134.00 + 133.90)

Part D plan

premium + $33.60

$133,501 to $160,000 $267,001 to $320,000 N/A $348.30

(134.00 + 214.30)

Part D plan premium + $54.20
above $160,000 above $320,000 above $85,000 $428.60

(134.00 + 294.60)

Part D plan premium + $74.80

 

It is now widely known that all Medicare beneficiaries will begin receiving the newly designed Medicare card…starting April 2018. Based on various reports, it will take all of 2018 to distribute the new cards to more than 60 million Medicare beneficiaries. The card design will thankfully no longer include Social Security numbers, as a way to stave off identity theft.

10 Things To Know About New Medicare Card

Not everyone will receive their cards at the same time. Medicare will send them out in batches based on your residence state. You can go to Medicare.gov/newcard to reference a map displaying a real-time view of which states have received cards. You can also enter your email address to automatically receive an update from Medicare when your new card will be mailed to you.

View an example of the new card