Annual Coordinated Election Period (AEP)

The Annual Coordinated Election Period runs from November 15 through December 31 each year. During this time beneficiaries may change prescription drug plans, change Medicare Advantage plans, return to original Medicare, or enroll in a Medicare Advantage plan for the first time. Enrollment changes take effect on January 1.

General Enrollment Period (GEP)

Medicare beneficiaries who did not enroll in Part B when they first became eligible for Medicare may elect Part B coverage during the General Enrollment Period, which extends from January 1 through March 31 each year. Enrollment becomes effective on July 1 of the same year.

Beneficiaries who delay enrollment in Part B will be assessed a late enrollment penalty on their Part B premium. The penalty is 10% for each full year of delayed enrollment for as long as the beneficiary remains covered under Part B.

Someone who enrolls in Part B during the General Enrollment Period also has a Special Enrollment Period (SEP) for Part D. From April through June of each year a new Part B enrollee may make one election to join a Part D plan. Because beneficiaries who only have Part A and not Part B are not eligible to enroll in a Medicare Advantage plan, the SEP enables beneficiaries who elect Part B during the General Enrollment Period to enroll in a Medicare Advantage plan with drug coverage (MA-PD).

Open Enrollment Period (OEP)

The Open Enrollment Period provides Medicare beneficiaries with one opportunity to enroll in, disenroll from, or change a Medicare Advantage plan. Like the General Enrollment Period, the Open Enrollment Period extends from January 1 through March 31 each year. Unlike enrollment in Part B, the change in Medicare Advantage enrollment or disenrollment becomes effective the month after the change is made.

Only beneficiaries who are eligible to enroll in a Medicare Advantage plan may make a change during the Open Enrollment Period. In other words, a beneficiary who wants to change must have both Medicare Part A and Medicare Part B and must live in the area served by the Medicare Advantage plan.

Beneficiaries may not add or drop Part D drug coverage during the Open Enrollment Period. Those who already have drug coverage can only change to another option with drug coverage. Those who do not have drug coverage may not change to an option that provides drug coverage. Permissible changes during the Open Enrollment Period include:

• MA-PD to a different MA-PD

• MA-PD to Original Medicare and a PDP

• Original Medicare and a PDP to an MA-PD

• MA-only plan to a different MA-only plan

• MA-only plan to original Medicare

• Original Medicare to an MA-only plan

Beneficiaries who want to use the Open Enrollment Period to return to Original Medicare from an MA-PD must do so by enrolling in a PDP. Enrollment in a PDP during either the Annual Coordinated Election Period or the Open Enrollment Period terminates enrollment in a Medicare Advantage plan. Because beneficiaries are generally limited to changing their prescription drug coverage during the Annual Coordinated Election Period, MA-PD enrollees who want to return to Original Medicare during the Open Enrollment Period have a Part D Special Enrollment Period that allows them to make one enrollment into a PDP.

Limited Open Enrollment Period (L-OEP)

Congress created a new enrollment period for 2007 and 2008, the Limited Open Enrollment Period, as part of the Tax Relief and Health Care Act of 2006. The Limited Open Enrollment Period allows someone in Original Medicare to enroll in a Medicare Advantage plan without drug coverage (MA-only plan) at any time of the year. Enrollment becomes effective the month after the choice is made. A beneficiary in an MA-only plan may not use the Limited Open Enrollment Period to return to Original Medicare.

The Centers for Medicare & Medicaid Services (CMS) has indicated that beneficiaries who use the Limited Open Enrollment Period to join a private fee-for-service plan without drug coverage will be able to keep their PDP. However, those who use the limited open enrollment period to enroll in an HMO, local PPO, or regional PPO that does not offer drug coverage will lose their prescription drug coverage.

Beneficiaries who lose drug coverage as a result of a choice made during the Limited Open Enrollment Period will be assessed a late enrollment penalty on their Part D premiums for any month in which they did not have drug coverage.

CMS has stated that MA-only plans will be required to contact potential enrollees to make sure they understand that they will lose their prescription drug coverage and to confirm that they still want to join the plan before enrollment is effectuated. In response to a letter from beneficiary advocates raising concerns about CMS’s interpretation of the new law, CMS has indicated that it will establish a Special Enrollment Period on a case-by-case basis to allow beneficiaries to disenroll from the MA-only plan and to return to their PDP if they were unaware that they would lose their drug coverage.

Special Enrollment Period (SEP)

Special Enrollment Periods allow beneficiaries to make an enrollment change outside of the GEP, the AEP, the OEP and the L-OEP.

Beneficiaries who delay enrolling in Part B because they are covered by employer-sponsored health insurance as an active worker or as a dependent of an active worker are not limited to enrolling in Part B during the GEP. They have an SEP that runs for eight months from the time they (or their spouse) retire or they lose their health insurance. Part B coverage starts the month after the election is made, and no late premium penalty is assessed.

A number of SEPs exist for Medicare Advantage and PDP enrollment and disenrollment. For example, someone who moves out of a Medicare Advantage Plan or PDP service area has an SEP to enroll in a plan that serves their new home. Beneficiaries who move into, reside in, or move out of a nursing home may also have an SEP. Individuals who are eligible for Medicare and Medicaid have an SEP that allows them to change Part D drug plans at any time. CMS has the authority to create SEPs for exceptional circumstances.

For more details about Part D SEPs see the PDP Eligibility, Enrollment and Disenrollment Guidance, http://www.cms.hhs.gov/PrescriptionDrugCovContra/Downloads/CurrentPDPEnrollmentGuidance.pdf.

The Medicare Advantage SEPS are described in the Medicare Managed Care Manual, Chapter 2, Medicare Advantage Enrollment and Disenrollment, http://www.cms.hhs.gov/HealthPlansGenInfo/Downloads/mc86c02.pdf.

Medicare Advantage Plans are health plan options that are part of the Medicare program. If you join one of these plans, you generally get all your Medicare-covered health care through that plan. This coverage can include prescription drug coverage. Medicare Advantage Plans include:

• Medicare Health Maintenance Organization (HMOs)
• Preferred Provider Organizations (PPO)
• Private Fee-for-Service Plans
• Medicare Special Needs Plans

When you join a Medicare Advantage Plan, you use the health insurance card that you get from the plan for your health care. In most of these plans, generally there are extra benefits and lower copayments than in the Original Medicare Plan. However, you may have to see doctors that belong to the plan or go to certain hospitals to get services.

To join a Medicare Advantage Plan, you must have Medicare Part A and Part B. You will have to pay your monthly Medicare Part B premium to Medicare. In addition, you might have to pay a monthly premium to your Medicare Advantage Plan for the extra benefits that they offer.

If you join a Medicare Advantage Plan, your Medigap policy won’t work. This means it won’t pay any deductibles, copayments, or other cost-sharing under your Medicare Health Plan. Therefore, you may want to drop your Medigap policy if you join a Medicare Advantage Plan. However, you have a legal right to keep the Medigap policy.

To compare Medicare Advantage Plans, go to the Medicare Options Compare.

Medigap (Supplemental Insurance) Policies

A Medigap policy is health insurance sold by private insurance companies to fill the “gaps” in Original Medicare Plan coverage. Medigap policies help pay some of the health care costs that the Original Medicare Plan doesn’t cover. If you are in the Original Medicare Plan and have a Medigap policy, then Medicare and your Medigap policy will pay both their shares of covered health care costs.

Insurance companies can only sell you a “standardized” Medigap policy. These Medigap policies must all have specific benefits so you can compare them easily.

You may be able to choose up to 12 different standardized Medigap policies (Medigap Plans A through L). Medigap policies must follow Federal and State laws. These laws protect you. A Medigap policy must be clearly identified on the cover as “Medicare Supplement Insurance.” Each plan, A through L, has a different set of basic and extra benefits.

It’s important to compare Medigap policies because costs can vary. The benefits in any Medigap Plan A through L are the same for any insurance company. Each insurance company decides which Medigap policies it wants to sell.

Generally, when you buy a Medigap policy you must have Medicare Part A and Part B. You will have to pay the monthly Medicare Part B premium. In addition, you will have to pay a premium to the Medigap insurance company.

You and your spouse must each buy separate Medigap policies. Your Medigap policy won’t cover any health care costs for your spouse.

For additional information on Medigap policies, including why you would want to buy a Medigap policy and information about what Medigap policies cover, please read our publication, Choosing a Medigap Policy: A Guide to Health Insurance for People with Medicare.