If you’re unhappy with your Medicare coverage, October 15 to December 7 is your chance to make a change. It’s Medicare’s Annual Enrollment Period. Here’s what you need to know.
Imagine how you would feel if you arrived for an appointment at your doctor’s office, only to learn that it no longer takes your medical insurance. What if that doctor was a specialist who had been treating you for a serious condition?
Or how would you feel if you went to your regular pharmacy and the pharmacist told you the prescription that previously had a $5 copay now costs much more?
Scary scenarios like these are a real possibility for Medicare beneficiaries who ignore an important piece of mail that came in late September or early October.
The “Annual Notice of Change” (ANOC) may look like junk mail, but believe me, it’s not. It’s important that everyone who relies on Medicare reads and understands their ANOC.
Medicare’s Annual Enrollment Period
Every year from Oct. 15 thru Dec. 7, Medicare holds its Annual Enrollment Period (AEP). (You’ll also see it referred to as the annual election period or open enrollment.) That’s when you have the right to make changes in your Medicare coverage for the following calendar year.
Before the AEP begins, every Medicare Advantage (MA) plan and every prescription drug plan is required to send every enrollee the Annual Notice of Change. In the document, the plans have to disclose all the changes they will make for the following year in premiums, copays, deductibles, benefits, coverage, providers, drug formularies, and pharmacies.
Those are all important pieces of information you need to ensure that your Medicare coverage for the following year is the best for your circumstances.
The notice should be your trigger to compare your plan and coverage choices. While it’s always smart to read and understand what’s in the ANOC, this year it’s especially important.
The Annual Enrollment Period: your chance to change your Medicare plan
If you have Original Medicare, you can add, change, or drop a prescription drug plan. This is your opportunity to switch to a drug plan with better coverage of your medications or to one with a lower monthly premium. It’s also your chance to switch to a Medicare Advantage (MA) plan if that’s what you want.
If you’re in a MA plan, the AEP is your opportunity to switch to a different plan that might better suit your needs. If you are unhappy with MA, this is your chance to move to Original Medicare, but you need to first make sure you can get a Medicare supplement (Medigap) plan.
Your plan rolls over and locks you in for the following year if you do nothing.
Changes in prescription drug coverage
The Inflation Reduction Act forced a big change in Medicare’s prescription drug coverage. It caps the maximum out-of-pocket cost for covered prescriptions (not counting premiums) at $2,000 in 2025. It eliminates the “coverage gap” — the dreaded “doughnut hole.” That’s a great benefit for seniors who have expensive medications.
As you might imagine, however, insurance companies that sell Medicare drug plans are not too happy about the change, as they will have to absorb or offset the cost of drugs above that $2,000 cap. The ways they will do so include increasing premiums, increasing deductibles, boosting copays, removing some drugs from their formularies (the list of the drugs covered by a plan), and even dropping plans.
In 2025, the total number of drug plans available nationwide will be down 26 percent from 2024 and will be the fewest available since the Medicare prescription drug coverage was created in 2006. But each state will have at least 12 plan choices available.
How this affects you
The Center for Medicare and Medicaid Services (CMS) said in a recent news release that the average drug plan premium is expected to decrease by $1.63.
But a calculated “average” doesn’t necessarily apply to you. For example, my current Medicare drug plan has a 40 cent monthly premium. However, in 2025, the monthly premium for that same plan will be $17.40. Furthermore, half of the 16 drug plans available next year in California (where I live) are increasing their monthly premiums by $35, which is the maximum allowed.
You won’t know how plan changes affect you unless you read your drug plan’s ANOC. Then you should use that information to compare drug plans using the Medicare.gov plan finder tool.
Surveys show that only about 30% of those with Medicare drug plans take the time to use the plan finder to compare prescription drug plan costs. Don’t be among that large group that potentially leaves money on the table for insurance companies to take.
Changes in Medicare Advantage plans
Meanwhile, if you’re in a Medicare Advantage plan, watch out for changes disclosed in the ANOC that could impact which doctors and facilities you can use, which “extra” benefits are available to you and how much you’ll be charged in copays.
The $2,000 out-of-pocket cap for prescriptions also applies to MA plans that offer drug coverage, even the ones with a zero monthly premium. So MA plans will be looking for ways to offset the extra drug costs they could incur.
Remember, insurance companies sell and manage the Medicare Advantage plans. Medicare pays those businesses a fixed monthly payment per member.
For 2025, many MA plans are increasing copays for doctor and specialist visits, charging higher deductibles for hospital stays, and raising the out-of-pocket maximum you will pay for in-network services (not counting premiums). At the same time, many will be eliminating some of those extra benefits they use to attract enrollees and dropping providers from their networks. Insurance companies are reducing the number of MA plans they offer, and in some cases, companies are no longer offering MA plans in certain markets.
Two of the largest MA plan sellers, Aetna and Humana, told investors earlier this year that they will be leaving some markets that are not as profitable as they had hoped.
If your MA plan leaves your market, that can trigger a time-limited right for you to switch to Original Medicare and to get a Medicare supplement plan without being denied for pre-existing conditions. You can find out how that might work for you from counselors in the State Health Insurance Assistance Program ( SHIP).
Dangers of ignoring your Annual Notice of Change (ANOC)
In my role as a volunteer Medicare counselor in the SHIP program, I worked with two individuals this year who only realized that their MA plans had made changes when they showed up for medical appointments and were told their doctors no longer contracted with their plans and could not accept their insurance.
They had not read the ANOC from their plans and did not elect to change plans or at least explore their options by the AEP deadline. So the insurance companies made their decisions for them and assigned them to new doctors. They can do that if you do nothing.
In one case, a man was counting on seeing a cancer specialist. He had to pay for the visit out of his own pocket. And he lost access to the doctor who had been treating him. He had not read the ANOC nor had he paid attention to another notice from his MA plan that assigned him to a different medical group and doctor he had never heard of.
Your provider may not accept your Medicare Advantage plan
If you don’t read the ANOC from your MA plan, you are, in effect, trusting that an insurance company will only make changes that benefit you.
You should be aware that a number of medical groups and hospitals around the country have said they will no longer accept MA plans in 2025. Their reasons include frustrations in dealing with prior authorization denials that interfere with care for their patients. In fact, in a recent survey, 60% of health system chief financial officers indicated they are planning or considering dropping one or more MA plans in the next two years.
Doctors and other providers regularly join and leave MA plan networks. Before committing to a given MA plan for next year, it’s a good idea to confirm whether your providers will be contracting with it. You can get that information from the provider’s billing office.
Evaluating Medicare Advantage plans
This time of year you will also get bombarded with advertising trying to get you to enroll in various MA plans. Please take the time to look at your mail so that you can spot the ANOC and then read it.
Evaluating and comparing MA plans does take some work. In this story from the last AEP, I wrote about how to evaluate MA plans before switching. A footnote to that story is that the MA plan I used as an example will not be available in 2025. Everyone who signed up for that plan now has to find another.
If you need help figuring all this out, don’t rely on what you see posted in social media or hear from well-meaning friends. Get your information from a trusted and knowledgeable source.
If you use an insurance broker, ask if they represent all of the MA or drug plans available where you live. Many only represent and sell a limited number, so they may not necessarily offer or even show you the best plan for your particular circumstances. One of the largest Medicare drug plan sellers, WellCare, announced that it will not pay commissions to brokers for enrolling people in 2025 drug plans. So brokers won’t have an incentive to help you enroll in a WellCare plan.
Visit the Medicare.gov site for more information
The official Medicare website at Medicare.gov has a plan finder tool that you can use to find, compare and enroll in MA plans and stand-alone prescription drug plans. The plan finder is a lot easier to use than in the past.
If you still need help, take advantage of your state’s branch of the SHIP program. SHIP is government-funded and is a source you can trust for free and unbiased information about Medicare.
Medicare’s Annual Enrollment Period ends Dec. 7. If you want to talk with a SHIP counselor, contact your local program soon to make an appointment, as those AEP slots fill quickly. I know that most of my AEP appointment slots are already booked.
If your SHIP program has no available appointments, you can call 1-800-Medicare. They can help you with the plan finder and enrollment. During AEP you can call outside of usual business hours.
Of course, you can also send your Medicare questions to me at Consumer Rescue, and I’ll be happy to steer you in the right direction. (Abe Wischnia, Special features columnist)
