AEP Explained: What to Expect During the Annual Enrollment Period

The Annual Enrollment Period (AEP) is an important time each year for individuals with Medicare-related coverage to review their current plan and consider whether changes may be appropriate for the year ahead.

AEP takes place annually from October 15 through December 7, with changes generally taking effect January 1 of the following year.

While the enrollment period occurs at the same time each year, plan costs, benefits, provider networks, prescription coverage, and other details can change from one year to the next. Taking time to review these changes can help individuals better understand what their healthcare coverage will look like in the upcoming year.

What Can You Do During AEP?

During AEP, eligible individuals can generally make certain changes to their Medicare Advantage and prescription drug coverage.

Depending on their circumstances, individuals may:

• Enroll in a Medicare Advantage plan.

• Switch from one Medicare Advantage plan to another.

• Switch from Original Medicare to a Medicare Advantage plan.

• Return to Original Medicare from a Medicare Advantage plan.

• Enroll in or change a Medicare prescription drug plan.

Changes made during AEP generally become effective January 1, provided the enrollment request is made by December 7.

AEP is different from other enrollment periods, including the Initial Enrollment Period, Medicare Advantage Open Enrollment Period, and Special Enrollment Periods. Each has different rules regarding eligibility and the types of changes that can be made.

What Should You Review?

AEP is about more than simply comparing monthly premiums. A plan that appears inexpensive may have different deductibles, copayments, provider networks, or prescription costs that should also be considered.

Premiums and Out-of-Pocket Costs

Review the upcoming year's premium and compare it with the current year.

Also consider deductibles, copayments, coinsurance, and other potential out-of-pocket expenses. Looking at the overall cost structure can provide a more complete picture than focusing on the premium alone.

Prescription Coverage

Prescription drug coverage can change from year to year. Plans may change their formularies, which are the lists of covered prescription drugs. A medication may also move to a different cost-sharing tier or have different coverage requirements. Individuals who take regular prescriptions should verify that their medications remain covered and understand how their costs may change.

Doctors and Healthcare Providers

Provider networks can change as well. If keeping a particular doctor, specialist, hospital, or other healthcare provider is important, it is worth checking whether they participate in the plan for the upcoming year. Provider participation can change, so current plan information should be used when reviewing network status.

Pharmacies

Pharmacy networks and preferred pharmacy arrangements can also affect prescription costs. Reviewing which pharmacies participate in a plan—and whether certain pharmacies offer different cost-sharing—can be an important part of evaluating prescription coverage.

Additional Benefits

Some Medicare Advantage plans may include additional benefits such as dental, vision, hearing, fitness, transportation, or other supplemental benefits. These benefits can vary by plan and may change from year to year. It is important to review the specific terms, eligibility requirements, and limitations.

Review Your Annual Notice of Change

Individuals enrolled in Medicare Advantage or a Medicare prescription drug plan generally receive an Annual Notice of Change (ANOC) before AEP. This document explains changes to the plan for the upcoming year and may include information about premiums, deductibles, cost-sharing, benefits, coverage rules, and other plan details. The ANOC, along with other official plan documents such as the Evidence of Coverage, can provide important information when reviewing existing coverage.

Common AEP Mistakes

A few common assumptions can make the annual review more difficult.

Assuming your plan will stay the same: Plan costs, benefits, networks, and prescription coverage can change each year.

Looking only at the premium: A low or $0 premium does not necessarily mean lower overall healthcare costs.

Not checking prescriptions: Changes to formularies and cost-sharing can affect the amount paid for medications.

Not checking providers: A doctor or specialist who participated in a plan previously may not participate in the upcoming year.

Waiting until the deadline: AEP ends December 7, so waiting until the last minute can make it more difficult to carefully review available information.

AEP Is an Opportunity to Review, Not Necessarily Change

An annual review does not automatically mean that a different plan is needed. For some individuals, their current coverage may continue to meet their needs. For others, changes in healthcare needs, prescriptions, providers, costs, or available plans may make reviewing other options worthwhile.

The goal is to understand what is changing and determine whether existing coverage continues to fit the individual's circumstances. By reviewing plan documents, costs, prescription coverage, provider networks, and benefits before the end of AEP, individuals can enter the new year with a clearer understanding of their healthcare coverage.

Disclaimer

This material is provided for general educational purposes only and is not intended to provide specific insurance, healthcare, legal, or financial advice. Plan availability, benefits, costs, coverage, premiums, provider networks, prescription formularies, and eligibility requirements vary by plan, individual circumstances, and geographic area. Information is subject to change and should be verified using current official plan materials and applicable Medicare resources.

Sound Retirement Solutions Inc is not affiliated with Medicare.