How to Switch Medicare Advantage Plans

U.S. citizens generally become eligible for Medicare when they reach age 65, which can be a great help with the essential medical needs of seniors. The coverage Medicare offers includes inpatient hospital care, outpatient treatment and supplies, prescription drugs and more. This care is delivered in several parts, known as Medicare Parts A, B and D, but many seniors choose to group their coverage parts together into a single plan. These are known as Medicare Advantage plans, also called Medicare Part C, and they combine the most helpful elements of the other parts of Medicare into one layer of coverage that’s provided by a private insurance company.

Medicare Advantage can be an excellent way for seniors to organize their Medicare insurance, but not every plan is ideal for every beneficiary who uses it. Depending on the state you live in, there could be nearly a dozen insurers offering multiple different plans apiece, and sometimes you have to switch from the first plan you’re on to another that’s a better fit.

This guide is written for seniors and their loved ones, to help you understand what Medicare Advantage is and how it affects the care you get, as well as to explain how to find the plan you need without penalties or other issues that get in the way of high-quality care for seniors. Read this guide for a clear, step-by-step road map to changing Medicare Advantage plans when and if you need to, as well as a helpful word about common mistakes that could cause a gap in coverage or result in less care and higher premiums.

How Medicare Advantage Works

Medicare Advantage is a popular choice for seniors who want all of the benefits of Original Medicare, with a single low monthly premium. Insurance companies that offer Part C design their coverage to meet federal, and sometimes state, Medicare requirements to ensure you get all the same coverage you’re entitled to under Original Medicare. Companies then typically add a few extras to each plan, such as eye exams or home care, and offer their plans to Medicare-eligible seniors at a low group rate. Authorized Part C providers can bill the Medicare program for many of their costs, which tends to keep costs to you, the customer, relatively low. In some cases, the reimbursement a company gets is so much more than their coverage costs that they can offer $0 monthly premiums for care.

From the beneficiaries’ point of view, Medicare Advantage operates much like any private insurance company. Plans are organized as HMOs, PPOs or other common structures that other health plans come in, and the monthly statement is structured just like what you’d get from an ordinary insurance policy. Your Medicare Advantage plan is likely to have a large network of preferred providers since Medicare is accepted nearly everywhere in the United States, which leaves the coverage levels and premium/co-pay/deductible costs as the only real variable in choosing a plan that works for you.

Initial Sign Up for Medicare Advantage

For most people, the first chance to sign up for Medicare Advantage comes in the year they turn 65. A few months before your birthday, the Social Security Administration reaches out with a letter inviting you to choose your Medicare coverage, including the option of a Medicare Advantage plan. During the initial open enrollment period, you are guaranteed to be accepted into any qualified plan you apply to, regardless of your health or any pre-existing conditions. You are also entitled to the lowest premium the insurer can offer in your area. If you sign up for Medicare Advantage outside of the open enrollment window, you may be charged more for your plan, or you could even be denied coverage because the insurer is allowed to use the same underwriting processes as it does with every applicant. If you want to switch plans, it is very important to do so during an open enrollment period. There are three types of open enrollment periods, known as initial enrollment, annual enrollment and special enrollment periods (SEPs).

Initial Enrollment

The initial enrollment period for Medicare Advantage begins on the first day of the third month before you turn 65, and ends on the last day of the third month after your birthday. Thus, if your birthday is August 10, your eligibility window starts on May 1 of the year you reach age 65 and ends on November 30 of the same year. During this time, you can sign up for Medicare Advantage without discrimination based on your health history or physical condition. If you have chosen a plan with prescription drug benefits, it is advisable to get the application in as early as you can, since there is a three-month delay before your Part D coverage activates, and this can cause a gap in coverage.

Annual Enrollment

The Annual Enrollment Period (AEP) for Medicare Advantage begins on October 15 of every year and ends on December 7. During this time, you can sign up for or switch your Medicare Advantage plan without incurring a penalty, and you cannot be denied coverage.

Special Enrollment Periods

Special enrollment periods begin when you lose your regular Medicare supplement through no fault of your own, and they last 67 days from the date your coverage ended. If, for instance, you retire from an employer that was providing your health insurance, you have nine weeks from the date your coverage ends to choose a Medicare Advantage plan for yourself. This is also the case for applicants who previously had health benefits through a spouse. You may also qualify for SEP enrollment in Medicare Advantage if you were overseas during your normal enrollment period and could not get signed up, if your previous insurer has gone bankrupt or stopped offering the plan you were on or if you have just been released from a federal institution. You can also trigger a SEP by canceling your first Medicare Advantage plan within the first 12 months, which encourages new beneficiaries to get signed up as soon as possible and then shop around for another plan if they need to.

How to Change a Medicare Advantage Plan

Switching to a new Medicare Advantage plan is a simple, one-step process. Once you sign up for a new plan, the insurer sends a notification to cancel your old policy. Even if you are changing companies as part of the switch, the insurers should be able to make the transition without any gaps in coverage. A similar process occurs if you switch to Original Medicare from your Medicare Advantage plan, or if you opt into a Medigap policy.

All 50 states have online marketplaces where seniors can shop for Medicare Advantage plans, along with other types of insurance coverage, and the federal Healthcare.gov website offers location-specific suggestions based on your circumstances. You may also want to ask a licensed insurance agent for help finding a plan with the benefits you’re most interested in, which should not cost you anything, as they are paid a commission by the insurance company.

FAQ

What benefits do Medicare Advantage plans provide?

By law, all Medicare Advantage plans must provide coverage for the same benefits you would have gotten from Original Medicare Parts A and B. On top of that, most Part C policies offer some extra services, such as prescription drug benefits and eye exams.

Can I add Medigap coverage to my Medicare Advantage plan?

No. Medicare Advantage is not compatible with Medigap, and you can only have one or the other at any given time, though you are allowed to change plans during open or special enrollment periods.

Who can get a Medicare Advantage plan?

All U.S. citizens or permanent legal residents who qualify for Original Medicare can sign up for a Medicare Advantage plan. Legal residents must have lived in the country for at least five years, and all applicants must have at least 10 years of work history and payments into the Social Security system. Most people become eligible for Medicare at age 65, though you can become eligible if you have been receiving SSDI benefits for more than 24 continuous months.

My financial situation has changed and my plan is too expensive now. Can I switch?

You may be able to change your Medicare plan for financial reasons under some circumstances. If your income and assets have reduced enough that you now qualify for Medicaid, you are automatically eligible for Extra Help, a Medicare program that pays most of your Part D prescription costs and that opens an SEP for you to switch out your supplemental plans. Call the Social Security Administration at 1-800-MEDICARE (1-800-633-4227) for details about the program.

Can applicants be denied a Medicare Advantage plan for pre-existing conditions?

If you enroll during an open enrollment period, you cannot be denied a plan or charged more for your health history or current conditions, though group rates may vary between geographic areas. If you apply for a plan outside of an open, annual or special enrollment period, the insurer is allowed to use the regular underwriting process, which may result in a denial of your application.