AEP vs. OEP: Understanding the Differences for Medicare - Policy Engineer (2024)

Medicare is a federal health insurance program for people aged 65 or older and some younger individuals with specific disabilities. Two important enrollment periods are the Annual Enrollment Period (AEP) and the Open Enrollment Period (OEP). In this blog, we’ll explore their key differences to help you make informed decisions about your coverage.

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Annual Enrollment Period (AEP):

1. Dates: The Annual Enrollment Period, often called the Medicare Annual Election Period, occurs annually from October 15th to December 7th. This is the time when most Medicare beneficiaries can make changes to their Medicare coverage for the upcoming year.

2. Changes Allowed: During AEP, you can make a range of changes to your Medicare coverage, including:

   • Switch from Original Medicare (Part A and Part B) to a Medicare Advantage plan (Part C).
   • Switch from a Medicare Advantage plan back to Original Medicare.
   • Change from one Medicare Advantage plan to another.
   • Enroll in or switch Medicare Part D prescription drug plans.

3. Coverage Effective Date: Changes made during AEP take effect on January 1st of the following year. It is crucial to make decisions and submit any necessary paperwork during this period to ensure your coverage is in place when the new year begins.

4. In 2024, individuals can contribute to an HSA if they have not yet enrolled in Medicare and have an HSA-eligible health insurance policy with a deductible of at least $1,600 for individual coverage or $3,200 for family coverage. This eligibility remains the same regardless of whether they obtain their insurance through an employer or independently.

   See Also

   Car Insurance Rates by State (September 2024)What is open enrollment?Open Enrollment Guide 2024 | eHealthMedicare Open Enrollment | CMS

   For 2024, the maximum contribution limits are set at $4,150 for individual coverage and $8,300 for family coverage. Additionally, those aged 55 or older can make an extra catch-up contribution of up to $1,000 to boost their HSA savings.

Open Enrollment Period (OEP):

1. Dates: The Medicare Open Enrollment Period occurs annually from January 1st to March 31st. It allows beneficiaries who are already enrolled in a Medicare Advantage plan to make certain changes to their coverage.
2. Changes Allowed: During OEP, beneficiaries can:
   • Switch from one Medicare Advantage plan to another.
   • Return to Original Medicare and add a standalone Medicare Part D prescription drug plan.
3. Coverage Effective Date: Changes made during OEP generally take effect on the first day of the month following the month you make the change. For example, if you make a change in February, your new coverage will typically start on March 1st.

Key Differences:

Now that we’ve outlined the basics of both AEP and OEP let’s delve into the primary differences between these two Medicare enrollment periods:

1. 1. Scope of Changes: AEP offers more flexibility, allowing beneficiaries to make a broader range of changes, including switching between Original Medicare and Medicare Advantage. OEP is more focused, primarily enabling changes within the Medicare Advantage landscape.

   2. Timing: AEP occurs in the fall, while OEP occurs in the early months of the year. This timing is crucial for planning as changes made during AEP become effective on January 1st, whereas OEP changes typically take effect later.

   3. Eligibility: All Medicare beneficiaries can participate in AEP, whereas OEP is specifically for individuals already enrolled in a Medicare Advantage plan. If you have Original Medicare with a standalone Part D plan, AEP is more relevant to you.

   4. Frequency: AEP happens yearly like clockwork, providing an annual opportunity to reevaluate your Medicare coverage. OEP is less known and utilized, as it only applies to a subset of beneficiaries.

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Review your Medicare Plan at least once a year.

1. Changing Healthcare Needs: Your health can change from year to year. New medical conditions may arise, and your existing conditions may require different treatments or medications. By reviewing your coverage annually, you can ensure that your plan still meets your healthcare needs.

2. Coverage Changes: Medicare Advantage and Part D prescription drug plans can change their benefits, premiums, copayments, and formularies (the list of covered drugs) each year. What was covered one year may not be covered the next, or the cost-sharing for your medications may change. Reviewing your plan helps you stay informed about these changes.

3. Network Changes: Medicare Advantage plans often have provider networks. Doctors and hospitals can join or leave these networks, which can affect your access to healthcare providers. It’s crucial to check if your preferred healthcare providers are still in-network.

4. Financial Considerations: Your financial situation may change from year to year. You might have different income levels, which can affect your eligibility for programs like Extra Help or Medicare Savings Programs. Additionally, you may find more cost-effective plans that better suit your budget.

5. Plan Performance: Medicare releases annual star ratings for Medicare Advantage and Part D plans, which evaluate plan quality based on various factors. Reviewing these ratings can help you choose a plan with a good track record of providing quality care and services.

6. New Plan Options: Medicare plans evolve, and new plans become available. By reviewing your coverage, you can explore new plan options that may offer better coverage, lower costs, or additional benefits that align with your needs.

7. Avoiding Penalties: If you miss certain enrollment periods or don’t sign up for specific types of coverage when you’re first eligible, you may face penalties or delayed coverage. Regularly reviewing your Medicare coverage helps you stay aware of these deadlines.

8. Preventing Surprise Expenses: Without reviewing your coverage, you may inadvertently discover that a medical service or medication you need is no longer covered or is subject to high out-of-pocket costs. This can lead to unexpected medical expenses.

9. Maximizing Benefits: Medicare offers various preventive services and wellness benefits. By reviewing your coverage, you can take advantage of these services, such as annual wellness visits, vaccinations, and screenings, to maintain your health proactively.

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Annual Enrollment Period (AEP)

1. What is the Annual Enrollment Period (AEP)?

   • AEP is the annual period from October 15th to December 7th, when Medicare beneficiaries can make changes to their Medicare coverage for the following year.

2. What changes can I make during AEP?

   • During AEP, you can switch from Original Medicare to Medicare Advantage, change from one Medicare Advantage plan to another, return to Original Medicare, or enroll in or switch Medicare Part D prescription drug plans.

3. When do changes made during AEP take effect?

   • Changes made during AEP become effective on January 1st of the following year.

4. Can I enroll in Medicare for the first time during AEP?

   • AEP is primarily for beneficiaries who are already enrolled in Medicare. If you’re new to Medicare, you generally have an Initial Enrollment Period (IEP) based on your 65th birthday.

Open Enrollment Period (OEP)

1. What is the Open Enrollment Period (OEP)?

   • OEP takes place annually from January 1st to March 31st and allows Medicare beneficiaries already enrolled in a Medicare Advantage plan to make certain changes to their coverage.

2. What changes can I make during OEP?

   • During OEP, you can switch from one Medicare Advantage plan to another or return to Original Medicare and add a standalone Medicare Part D prescription drug plan.

3. When do changes made during OEP take effect?

   • Changes made during OEP generally take effect on the first day of the month following the month you make the change. For example, changes made in February typically take effect on March 1st.

4. Can I switch from Original Medicare to a Medicare Advantage plan during OEP?

   • No, you generally cannot switch from Original Medicare to a Medicare Advantage plan during OEP. AEP is the appropriate period for such changes.

General

1. Can I make changes to my Medicare coverage outside of AEP and OEP?

   • Yes, Special Enrollment Periods (SEPs) allow for changes in certain circ*mstances, such as moving to a new area, losing other coverage, or qualifying for Medicaid.

2. What happens if I miss the AEP or OEP deadlines?

   • Missing these enrollment periods may limit your options for changing your Medicare coverage. You might have to wait until the next AEP or OEP, or you may qualify for a Special Enrollment Period (SEP).

3. Should I review my Medicare coverage every year, even if I’m satisfied with it?

   • Yes, it’s a good practice to review your coverage annually. Your healthcare needs may change, and insurance plans can also change their benefits and costs yearly.

4. Where can I get help or information about Medicare enrollment periods?

   • You can contact Medicare directly, work with a licensed insurance agent specializing in Medicare, or visit the official Medicare website (medicare.gov) for information and resources.