How to Make the Most of the Medicare Annual Enrollment Period

Avoid these common mistakes

Medicare Annual Enrollment

Martinns / Getty Images

The Medicare Annual Enrollment Period runs from October 15 to December 7 every year. There is a tendency to “set it and forget it.” Don’t fall victim to that mindset. Even if you had a great plan this year, it does not mean it’s going to meet your needs next year.

This article will review what you need to know about the Medicare Annual Enrollment Period (AEP), also known as Medicare Open Enrollment.

What You Can Do During the Medicare AEP

This is your opportunity to change Medicare plans. You can change from a Medicare Advantage plan to another Medicare Advantage plan or from a Part D prescription drug plan to another Part D plan.

You can also change from Original Medicare (Part A and Part B) to a Medicare Advantage plan (Part C) and vice versa. You will have to decide if Original Medicare’s nationwide network of providers meets your needs.

Then again, you may not mind having a smaller network of local providers if it means you can get extra supplemental benefits through a Medicare Advantage plan.

Finally, you can make decisions about your prescription drug coverage. You can choose a Medicare Advantage plan that has prescription drug coverage included.

Alternatively, you can sign up for a Part D plan. You can even drop your Part D coverage if you want. The only time you may want to do that, however, would be if you had creditable drug coverage from another source.

Creditable Coverage

Creditable means that the drug coverage is as good as a basic Part D plan. This could be from an employer-sponsored health plan, Indian Health Service, Program of All-Inclusive Care for the Elderly, Tricare, Veteran’s Health benefits, or other source.

What You Cannot Do During the Medicare AEP

What you cannot do is sign up for Part A or Part B for the first time. The Medicare Annual Enrollment Period is for people who are already enrolled in Medicare.

To sign up for Medicare the first time, you need to use the Initial Enrollment Period (IEP). The IEP is centered around your 65th birthday. You have three months before and three months after your 65th birthday to enroll, or you could face late penalties.

People who work for an employer that hires at least 20 full-time employees can wait to sign up until they leave their job or lose their employer-sponsored health coverage, whichever comes first. They will not face late penalties if they sign up within eight months.

If you miss your Initial Enrollment Period, you need to wait until the General Enrollment Period to sign up for Part A and/or Part B. The General Enrollment Period happens once a year from January 1 to March 31.

Five Mistakes to Avoid During the Medicare Annual Enrollment Period

You do not check your Annual Notice of Change.

Medicare Advantage plans and Part D plans are run by insurance companies. The federal government requires them to cover certain services. That said, they can change what other services they cover and who provides them.

Once a year, they will send out an Annual Notice of Change. This document outlines what changes are coming in the new year regarding costs and coverage.

Check to make sure that there are no changes in your plan that could affect your care, including:

  • Will your doctors be in your network next year?
  • Are any medications you take being taken off your formulary or being moved to a higher tier (e.g., you pay more for higher tier medications)?
  • Will the cost of your deductibles, coinsurance, and copayments change, and how much more could you end up paying?

Tip

Be sure to read your Annual Notice of Change every year to make sure your plan is still a good fit.

You do not look into Medicare Advantage supplemental benefits.

If you need certain services, especially dental, hearing, and vision coverage, you may want to consider a Medicare Advantage plan. Original Medicare does not cover them, but many people on Medicare need dentures, hearing aids, and eyeglasses.

The Centers for Medicare & Medicaid Services recently allowed Medicare Advantage plans to expand what types of benefits they could offer.

In 2019, they extended what they considered “primarily healthcare-related” benefits. These could include (but were not limited to) adult daycare services, medical alert devices, rideshare services for health appointments, and even carpet cleaning for people with asthma.

In 2020, they added services specifically for people who had chronic conditions. Not all of those benefits had to be “primarily healthcare-related.” They included possible coverage for services like acupuncture, food and produce, pest control for the home, and subsidies for utilities like electricity, gas, and water.

Tip

Consider how much you will pay out of pocket for items that are not covered by Original Medicare. A Medicare Advantage plan might give you more options and could offer considerable savings.

You do not sign up for prescription drug coverage.

If you do not take prescription medications, you might be tempted to forego a Part D plan or a Medicare Advantage plan that includes Part D coverage. After all, why would you want to pay another premium?

The problem is that not signing up for a plan could leave you paying late penalties when you eventually do sign up for one. Those penalties will last as long as you are on Medicare unless you happen to qualify for the Part D Low Income Subsidy, known as Extra Help.

If you go without creditable coverage for 63 days, you could end up paying Medicare late fees for Part D when you finally do sign up for a Part D plan.

Tip

Even if you don’t take medications now, you might in the future. Choosing a low-cost plan now could help you avoid lifelong late penalties later.

You sign up for the same plan as someone you know.

Word of mouth is always good for business, but it may not always be good for your health. While it can be helpful to hear that a certain company offers good customer service, that does not mean the plans they offer will cover the services you need.

Each person is unique. No one shares your specific medical history. They may not be on the same medications or use the same doctors. You need to find a plan tailored to your individual situation.

Tip

Recommendations from family and friends can help you decide between plans, but make sure those plans meet your needs first and foremost.

You do not shop around for a new plan.

“Set it and forget it” is the path of least resistance. The truth is that there could be a better plan for you out there.

Medicare Advantage plans are competing for your business. They could offer better prices or more benefits than other plans. Take the time to see how they compare on costs, and pick the one that will save you the most money.

Tip

It’s worth the time and effort to shop around for plans.

Summary

If you are on Medicare, the Medicare Annual Enrollment Period is your opportunity to change to a different plan. Available from October 15 to December 7 each year, you can switch Medicare Advantage plans, between Part D plans, or change from Medicare Advantage to Original Medicare and vice versa.

Your medical needs may change from year to year. It’s important to take a look at each plan, considering the services they cover as well as their costs.

A Word from Verywell

The Medicare Annual Enrollment Period has a lot to offer. Don’t let it pass you by. You want to make sure that you are not only getting quality health care, but that you are also getting it at an affordable price.

Was this page helpful?
4 Sources
Verywell Health uses only high-quality sources, including peer-reviewed studies, to support the facts within our articles. Read our editorial process to learn more about how we fact-check and keep our content accurate, reliable, and trustworthy.
  1. Centers for Medicare & Medicaid Services. Medicare & you 2022.

  2. Centers for Medicare & Medicaid Services. Sign up for Medicare Part B now through March 31.

  3. Centers for Medicare & Medicaid Services. Announcement of calendar year (CY) 2019 Medicare Advantage capitation rates and Medicare Advantage and Part D payment policies and final call letter.

  4. Centers for Medicare & Medicaid Services. Announcement of calendar year (CY) 2020 Medicare Advantage capitation rates and Medicare Advantage and Part D payment policies and final call letter.