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Posted 01/24/2022 in Category 1

Do I Have to Renew Medicare Advantage Every Year?

Do I Have to Renew Medicare Advantage Every Year?

There is a big emphasis on enrollment periods when you're in the Medicare program. You need to know which ones are important to you, what you can do during each, and which penalties you may incur for missing an enrollment period. Plus, it seems like there are so many to keep track of!

A couple of enrollment periods each year apply to Medicare Advantage plan members. This leads many of our clients to ask, "Do I need to renew my Medicare Advantage plan every year?"

The answer is no. Your Medicare Advantage plan will renew each year automatically unless you cancel the policy or stop paying the monthly premiums. The same is true of Medicare Parts A and B, Part D prescription drug plans, and Medicare supplements.

However, you're not off the hook quite that easily. You may not be required to renew your Advantage plan each year, but you absolutely should review your coverage options! First, let's talk about your opportunities to do this each year. Then, we'll review a few exceptions to the auto-renewal rule.

Review Opportunity #1: The Annual Election Period

The AEP runs from October 15 to December 7 each year. During this time, you can look at your current plan, how it will be changing in the upcoming year, and then compare it to other plan options on the market. Your current insurance plan will send you an Annual Notice of Change (ANOC) outlining the changes coming in the following year. If you find a plan that will provide better coverage for you or will have lower premiums, you can choose to switch to that plan for the next year.

Many people ignore the AEP if they are happy with their current plan. If it has worked well for them, they don't see any reason to switch or shop for other plans. This is understandable. However, many people don't realize that their current plan may not be the same from one year to the next.

Medicare Advantage plan benefits often change each year, and those changes may not be beneficial to you. Even if the coverage stays the same, your favorite doctor may not be in the plan's network every year. If your Advantage plan includes prescription drug coverage, the drug formulary could also change. As a result, a medication you're taking now may not be covered in the next year. Those are big changes that could cost you hundreds of dollars.

You should take a few minutes to review your coverage with your licensed insurance agent during the AEP to decide if your current plan is still the right one for you.

Review Opportunity #2: The Medicare Advantage Open Enrollment Period

The Medicare Advantage (Part C) program has another enrollment period called the Medicare Advantage Open Enrollment Period. This one runs from January 1 to March 31 and applies to Medicare beneficiaries already enrolled in a Part C plan.

During OEP, you can make a one-time change to your Part C plan. You can either change to a different Part C plan, or you can switch back to Original Medicare (Parts A and B). If you switch back to Original Medicare, you'll also have the opportunity to enroll in a stand-alone Medicare prescription drug plan.

The OEP is your last chance to make any changes for the year.

Exceptions to the Rule: When You May Need to Renew Your Medicare Advantage Plan

We said that your Medicare Advantage plan would renew each year automatically unless you switch to a new plan. As with other things in life, there are always exceptions to this rule. Let's talk about a few times when you need to renew your coverage.

One of the changes that could be made in a Medicare Advantage plan is the area the plan serves. To enroll in an MA plan, you must live within the service area. If your current plan reduces the area it serves and you fall outside that area, you'll have to shop for a new plan.

The insurance company offering your plan could also choose not to renew its contract with Medicare for the following year. If that's the case, you'll have a Special Enrollment Period (SEP) that will run from December 8 to the end of February of the new year. You can choose a new MA plan during this time or switch back to Original Medicare. If you do nothing, you'll automatically be switched to Original Medicare.

Your new coverage will begin the first day of the month following your application to the new plan. (If you apply on February 15, your coverage will begin on March 1.

Lastly, either your plan could leave the Medicare program mid-year, or Medicare could decide to terminate its contract with your plan.

If your plan leaves the Medicare program, you'll get a three-month Special Enrollment Period that will begin two months before the contract ends and will be extended until one month after the contract has been terminated. If the Medicare program chooses to terminate the contract, your SEP will begin one month before the plan ends and will end two months after the termination date.