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There’s a do-over for Medicare beneficiaries who discover early in the year that their Advantage Plan is not an ideal fit.
Between Jan. 1 and March 31, you can switch to a different Advantage Plan or drop the one you have altogether in favor of basic Medicare (Part A hospital coverage and Part B outpatient care coverage).
“The most common reason people make a change is that they find out in January that something on their plan has changed that they don’t like,” said Danielle Roberts, co-founder of insurance firm Boomer Benefits.
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“Maybe they never reviewed their annual notice of change back in September and so in January they go to fill a prescription and find out that their plan is no longer covering that medication this year,” Roberts said.
Of Medicare’s approximately 63.6 million beneficiaries, about 26.9 million are enrolled in Advantage Plans, which deliver Parts A and B and usually Part D prescription drug coverage, along with extras such as dental and vision. However, they come with their own cost-sharing structures (i.e., deductibles and copays) and their lists of drugs covered (and their cost), which differ from plan to plan.
The current opportunity to change or drop your Advantage Plan arrives just weeks after the close of Medicare’s annual fall enrollment, when a variety of options were available for those who wanted to modify their coverage.
In contrast, this Advantage Plan-related window comes with restrictions.
For starters, you can only make one switch. This means that once you move to a different Advantage Plan or drop it for basic Medicare, the change is generally locked in.
“Once your election is made, you’re in this plan for the remainder of the year,” said Elizabeth Gavino, founder of Lewin & Gavino and an independent broker and general agent for Medicare plans.
Once your election is made, you’re in this plan for the remainder of the year.
Elizabeth Gavino
Founder of Lewin & Gavino
Additionally, this three-month window does not allow you to switch from one standalone Part D prescription drug plan to another.
If you picked a Part D plan in the fall open enrollment period based on faulty or misleading information, you can call 1-800-Medicare to see if your situation would allow you to make a change.
Meanwhile, dropping an Advantage Plan in favor of basic Medicare often means losing drug coverage — which means you would have to enroll in a standalone Part D plan.
This matters, because if you go 63 days without the coverage, you could face a lifelong late-enrollment penalty that gets tacked on to your monthly premiums. That charge is 1% of the national base premium ($33.37 for 2022) for each full month you go without drug coverage.
Also, if you switch back to original Medicare and want to get a supplemental policy (aka “Medigap“), be aware that you may not qualify for guaranteed coverage. These policies either fully or partially cover cost-sharing of some aspects of parts A and B, including deductibles, copays and coinsurance. However, they come with their own rules for enrolling.
“In most states, you’ll need to go through underwriting and get approved for a Medigap plan,” Roberts said. “So it’s wise to apply for that first to make sure you can get approved before you cancel the Advantage Plan.”
Also from Jan. 1 through March 31: If you missed your initial Medicare enrollment period and don’t qualify for an exception, you can sign up during this window. If you are in this situation, coverage won’t start until July 1.
