A Medicare Do-Over? It Might Be Available to Some of Your Clients—But Act Fast

We’ve all been there—we make a decision we wish we could take back, or we go down one road when we should’ve taken another. Sometimes there’s no going back, but when it comes to Medicare, you may be able to offer your clients a solution. If your clients enrolled in a Medicare Advantage plan last year and have doubts about whether it’s the right health insurance for them, you can help them facilitate a Medicare do-over during the new open enrollment period—but you’ll have to act fast, as the window isn’t open for long.

Like all Medicare matters, the details about the new Medicare Advantage open enrollment period take some time to understand. A general overview of Original Medicare Part A and Part B and Medicare Advantage plans will help you provide your clients the best guidance for their situation.

Signing up for Part A and Part B is the first step in Medicare enrollment. Once enrolled, individuals may choose to receive Medicare coverage through Part C, also known as Medicare Advantage.

Medicare Advantage is managed care offered through private health insurance companies. Several types of managed care plans are available through Part C, including health maintenance organizations, preferred provider organizations, and private fee-for-service plans. The Centers for Medicare and Medicaid Services approve the coverage provided by managed care plans, and individuals don’t forfeit any Medicare rights or protections if they choose Medicare Advantage over Medicare Part A and Part B. Clients must, however, continue to pay their Part B premium even if they choose a Medicare Advantage plan.

Medicare Advantage plans are popular because they offer benefits like dental and vision coverage that aren’t available from Part A and Part B. Most Medicare Advantage plans also provide prescription drug coverage. As a result, a separate stand-alone Part D plan usually isn’t needed as it is with Part A and Part B.

Medicare Advantage vs. Medigap. Clients may confuse Medicare Advantage plans with Medigap plans because both are identified by alphabet letters and offered by private companies. Medigap plans, however, serve a different purpose: supplementing the coverage gaps provided by Part A and Part B. Clients who choose a Medicare Advantage plan don’t need a Medigap plan.

The new Medicare Advantage open enrollment period began January 1 and ends on March 31. During what is effectively a Medicare do-over window, your clients can:

• Switch to a different Medicare Advantage plan
• Move from Medicare Advantage to Original Medicare Part A and Part B
• Enroll in a stand-alone Part D prescription drug plan if they move to Original Medicare Part A and Part B

Seems simple enough, right? So, what’s the problem? Well, it’s different from Medicare’s other enrollment periods.

Fall enrollment. The annual fall open enrollment period for Medicare beneficiaries runs between October and December each year. During that period, beneficiaries have the option to move from Original Medicare to a Medicare Advantage plan, select a different stand-alone Part D prescription drug plan, or choose a different Medicare Advantage plan.

New Medicare Advantage enrollment. Replacing the annual disenrollment period that previously occurred between January and February, the new Medicare Advantage open enrollment period has greater flexibility because it also allows plan participants to change to a different Medicare Advantage plan. The old disenrollment only allowed plan participants to leave a Medicare Advantage and return to Part A and Part B.

This new open enrollment period isn’t the same as the general enrollment period from January to March, however. It’s available for those who missed the initial enrollment period or special enrollment period (if they were covered by employer-provided health insurance after age 65).

Also, keep in mind that any decisions made during the new Medicare Advantage open enrollment period are one and done. Your clients can’t select one Medicare Advantage plan and then switch to another before March 31. New coverage will become effective on the first day of the first full month following a client’s decision. If your client selects a new Medicare Advantage plan in February, coverage will begin in March.    

There are a number of factors that could prompt your clients to amend their choice of Medicare Advantage plan—one of the primary reasons being when doctors or hospitals leave the network. Each plan issues an annual notice of coverage change in the fall, which details any such changes. Encourage your clients to review this document.

Medicare Advantage plans may also change out-of-pocket expenses and prescription formularies each year. Prescription formularies can be especially tricky for those who begin taking a certain drug and then find that their Medicare Advantage plan doesn’t cover it.

You might consider directing your clients to reach out to their State Health Insurance Assistance Program. Counselors are available to answer questions about whether to change coverage during the new Medicare Advantage enrollment period. Find websites and phone numbers for specific states at medicare.gov.

For many clients, navigating the murky waters of Medicare on their own feels nearly impossible, and many simply may be unaware of this Medicare do-over option. With thousands of baby boomers turning 65 each day, it is more important than ever for advisors to not only educate themselves on the Medicare options available to their aging client base, but also to be prepared to guide clients through all aspects of their financial lives, from investment management and retirement savings to health care and legacy planning. When clients are feeling like they took a wrong turn, it’s up to you to step in and lead the way.

Do you think many of your clients will take advantage of this new Medicare do-over option? How else do you help clients with Medicare planning? Please share your stories below!