Understanding the 2011 Annual Election Period

The 2011 Medicare Annual Election Period (AEP) begins and ends early this year running from October 15th to December 7th. Many erroneously refer to this period as open enrollment, but this is not the accurate name for this window of time and that can be misleading for those who wish to make changes to their Medicare insurance coverage.

The Annual Election Period occurs yearly and while the dates will sometimes differ, it occurs in the last few months of each year. Conversely, open enrollment is a one-time event for seniors and those who otherwise qualify for Medicare and includes the 3 months on either side of their 65th birthday or Medicare Part B eligible date.

Medicare eligible individuals can make several changes to their insurance plans during AEP, but there is some confusion as to what can and can’t be done as designated by the Centers for Medicare and Medicaid Services. Some insurance changes will require medical underwriting by the new provider while others will not.

Changing Part D Prescription Drug Plans

A common practice during AEP is to switch, or enroll for the first time, in Medicare prescription drug Part D coverage. There are no underwriting requirements for those who simply want to switch to a more suitable prescription plan.

However, for those who are enrolling for the first time and did not do so during their initial open enrollment window, there can be late enrollment penalties. The penalties will increase the monthly premiums for the new insurance plan going forward. New plans will become effective January 1, 2012.

Dropping Medicare Advantage Coverage

AEP also allows consumers to change their Medicare Advantage coverage. Consumers can dis-enroll from one plan and enroll into another if it better suits their needs. They can also dis-enroll from an Advantage plan and re-enroll back into Original Medicare Parts A and B.

If a consumer has been enrolled in an Advantage plan for longer than one year and desires to return to Original Medicare, medical underwriting may be necessary if s/he wants to purchase a traditional Medicare supplement. Most Medicare supplement plans require a series of medical questions to be answered if the one year Medicare Advantage trial period has expired. It is wise to speak with an insurance professional to discuss all options before assuming that a traditional Medicare supplement will be available for purchase.

Switching Medicare Supplement Plans

One very common misconception about the AEP window is that consumers can automatically purchase a new Medicare supplement plan without underwriting. Unfortunately this is not the case. In almost all instances, some amount of medical underwriting will be needed in order for consumers to switch supplements.

In this way, consumers who own a Medicare supplement might think about changing coverage anytime of the year – not only during AEP. There are a couple of states (Missouri and California for instance) that do offer an open enrollment window each year when like or lesser Medicare supplement insurance coverage can be purchased without medical underwriting, but they are the exception. And the open enrollment windows associated with these states are consumer specific and do no necessarily coincide with AEP.

In all, AEP is a good time of the year to review your Medicare coverage with an insurance professional who is familiar with the plans available in your area. If you are unsatisfied for any reason with your existing coverage, changes can be made to find more suitable insurance while avoiding penalties, enrollment problems, and underwriting issues.

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