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Medicare Annual Open Enrollment 2019: A complete guide to making the right decisions for you

On October 15th, the Medicare Annual Enrollment Period (AEP), sometimes referred to as Medicare Open Enrollment, started. Medicare beneficiaries have 54 days, until December 7th, to make sure they have the best coverage for 2020. What exactly are the changes that need to made? What about if you like your coverage now? We will answer all your questions in our in-depth guide below. It is imperative that every fall you look at your coverage, no matter your situation. If there is anything that we do not answer, fill out the box below or give us a call – we will make sure to get back to you with answers! 

What can I change during Medicare Annual Enrollment? 

You have a few decisions to make during this period. 

  • You can change your Medicare Advantage Plan
  • You can change your Part D Drug Plan 
  • You can switch from a Medicare Advantage plan to Original Medicare
  • You can switch from Original Medicare to a Medicare Advantage Plan

You have a lot of choices that can be made in these 54 days. It is so important to understand the basics of Medicare before making a choice, even if the choice is no change at all. 

The Basics of Medicare 

Medicare, the federal health insurance program for people aged 65 and older, is made up of four parts: Part A, Part B, Part C, and Part D. Part A is hospital coverage; it is free for most people. Part B covers doctors and outpatient services. It has a monthly cost as well as a yearly deductible and cost sharing. Part A and B make up Original Medicare. Part C is Medicare Advantage. When you elect Part C, you are taking your Part A and B from the government and giving it to a private insurance company. Part D covers prescription drugs. There are a lot of intricacies within these 4 parts, but if you understand what each part is, it becomes much easier to understand the larger Medicare picture. 

Changing Medicare Advantage plans during Annual Enrollment 

 Medicare Advantage, or Part C, is currently used by 34% of Medicare beneficiaries.  It offers low monthly premiums, sometimes even $0. The trade off is that you must visit the doctors and hospitals in the plans networks as well as pay co-payments, co-insurance, and/or deductibles every time you use your insurance.  Due to this, these plans do not travel well, which does not make them suitable if you regularly visit friends and family who live in other areas. These plans usually included drug benefits and sometimes includes coverage for dental and vision services. 

Medicare Advantage plans can only be changed during Annual Enrollment  for most (there are a few exceptions, but we will not go into depth on those).  Advantage plans can increase prices, change preferred doctors and hospitals, and change drug formularies every year. You will want to make sure the changes do not affect your coverage negatively. If it does, you should look into getting a new plan. It is also worth checking to see if another plan might have changed enough to now be a better fit for you. 

The best way to start the process of switching plans is to look at all the plans available in your area. Plans are based on your zip code; some zip codes have no Medicare Advantage plans available. To look at all the plans you can go to Medicare.gov or you can go to  or contact a broker, like Cardinal Advisors, who can look at it for you. You do not want to make a mistake here, as you will be stuck in it for the next year. 

Beneficiaries on Medicare Advantage plans also have the option to change back to Original Medicare during Medicare Annual Enrollment. Most people do this because they want the freedom that comes with not having networks and copayments every time they go to the doctor. If you do this, you will want to get signed up with a Medicare Supplement as well as a stand-alone Part D drug plan, which we will talk more in depth about below. 

Changing Part D Prescription Drug plans during Annual Enrollment 

Part D plans are another big part of Medicare Annual Enrollment. This period is the only time for most people to adjust their drug coverage. From year to year drug plans can change their formularies and preferred pharmacies. Your drugs can also change. It is important to make sure every year you are in the best plan for you. Even if you are not on any drugs, it is important to consider getting drug coverage. If you do not have any drug coverage that the government counts as credible, you will receive a penalty, paid for life once you do decide you need drug coverage. This penalty can get very expensive. We recommend our clients in this situation sign up for the lowest cost drug plan ($13-$20/ month) in their area to avoid this penalty. 

If you are on a Medicare Advantage plan, it is likely that it includes drug coverage and you do not need a Part D plan. If you are in Original Medicare, you do need a drug plan. Some people do have drug coverage through work or the VA that will qualify as creditable coverage and will not need Part D drug plan. 

Like Advantage plans, it is important to take a look at your drug plan every year. If you are already in a drug plan, you will be kept in the same plan, even if it has changed, if you don’t do anything. Make sure to look at all the plans available in your area. Drug plans are not standardized, so each plan is going to have different preferred pharmacies and drug tiers. Their deductibles, premiums, and copayments are also going to differ. You can go to Medicare.gov to look at the plans available in your zip code or work with a broker who represents multiple drug plans. Again, like Medicare Advantage plans, it is so important to make sure you get this right, as you will be with this plan for a year, and mistakes could end up costing you a lot of money. 

Changing Medicare Supplements during Medicare Annual Enrollment

If you have a Medicare Supplement, you can change it during Annual Enrollment. You can also change it any other time throughout the year. Supplements can be changed 365 days a year, not just during Medicare Annual Open Enrollment. We recommend that you look into your supplement every 1-2 years as supplements are standardized. Each plan is the exact same from company to company, the only difference is price.  That means the Plan F from Company A provides the exact same coverage as the Plan F from Company B – but they can charge two different prices for it! You can run a report of these prices here without giving any personal information. We recommend the Plan G for most of our customers, but the Plan F and Plan N are great choices as well (Want to know the differences between these plans?).

If you have a supplement, you are going to need a stand alone drug plan, which we discussed above. If the supplement price combined with the drug plan expense is too high for you, you can use Annual Enrollment to switch to a Medicare Advantage plan. In doing this you will lower your monthly cost, but you will be more limited to the doctors and hospitals you can go to. Make sure to know all your options before switching.

Annual Enrollment is a period to make sure you get the best coverage for you. At Cardinal, we know that Medicare Annual Enrollment can be confusing or overwhelming. We take our time to explain our recommendations as well as our reasoning so clients can feel confident in their choices. If you would like this complimentary Medicare consulting, leave your information in the box below or give us a call! 

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Retirement planning involves a lot more than just managing your money. This show is the complete guide to planning for and living in retirement, helping families finish well. Host Hans Scheil will discuss a new topic every week ranging from Social Security and Medicare to IRAs and taxes. Follow along each week by downloading the corresponding chapters below for free! New episodes air: Finishing Well Schedule on Truth Network
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