Understanding Medicare Annual and Open Enrollment Periods

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The Medicare terms Annual Enrollment Period (AEP) and Open Enrollment Period (OEP) are often used interchangeably, but they don’t always mean the same thing. The AEP and OEP are annual fixed windows during which individuals can enroll in Medicare or revise their existing Medicare plans.

Insurance companies that provide Medicare Advantage Plans (Part C) and Medicare Part D plans make annual changes to their offerings. The changes may affect the cost of your insurance plan, your coverage, and your choice of in-network health care providers and drug stores, among other features.

These updates are communicated a few weeks prior to the start of the enrollment periods via an Annual Notice of Change (ANoC) that is mailed to your home. The ANoC features all the changes that will affect your plan for the coming year.

As a beneficiary, you’re required to carefully review the changes and decide whether the plan will continue to meet your coverage needs. If you’re not satisfied with the changes, you can choose to drop the plan, switch it to a more suitable alternative, or purchase extra coverage.

It is important to be aware of these two annual enrollment periods. If you miss them, you won’t be able to sign up or make changes to your plan until the following year, unless you experience an event that qualifies you for special enrollment.

Qualifying life events for special enrollment are exceptional circumstances that allow you to sign up for Medicare outside of the open enrollment periods. They include losing your Medicare coverage involuntarily, getting married, moving out of your current plan’s service area, and having or adopting a baby.

In this write-up, we’ll highlight the differences between these two critical Medicare enrollment periods and help you understand when you can sign up, change, or drop a Medicare plan. Read on for everything you need to know about the Medicare AEP and OEP.

The Difference Between the Medicare Annual Enrollment Period and Open Enrollment Period

As mentioned, the AEP and OEP don’t always refer to the same time frame. Even so, depending on the context, OEP can be used to mean AEP. There are distinct differences between the AEP and OEP, from the dates to the number of changes you can make to your health insurance plan.

What Is the Open Enrollment Period (or General Enrollment Period)?

The OEP or General Enrollment Period is a fixed time span that runs from January 1 to March 31 every year. During this time, you can enroll in a Medicare plan, make changes to your current Medicare Advantage Plan, or switch to an Original Medicare Plan.

Unlike the AEP, only those enrolled in a Medicare Advantage Plan can make changes during this window.

Changes made to your Medicare Advantage Plan during this period go into effect on the first day of the following month, regardless of whether the changes were made on the first or last day of the enrollment period.

During the OEP, beneficiaries have the opportunity to make only one change to their Medicare Advantage Plan and can’t make any other changes until the next enrollment period the following year.

Therefore, you should be cautious when making a change to your plan during the OEP because the change will remain in effect for an entire year, and you will have no opportunity to make adjustments until the next enrollment period.

What changes can I make during the Open Enrollment Period?

During the OEP, you can switch to a different Medicare Advantage Plan. Listed below are the Medicare Advantage Plans offered by private insurance companies:

Health Maintenance Organizations (HMOs). They have their own network of doctors, hospitals, and health care providers who accept a specified level of payment for the services they provide.
Preferred Provider Organizations (PPOs). Just like HMOs, they have their own network of health care providers who offer discounted rates to plan members.
Other offerings include Private Fee-For-Service (PFFS) plans, Special Needs Plans (SNPs), and Medical Savings Accounts (MSAs).

You can also drop your Medicare Advantage Plan and revert to an Original Medicare Plan during the OEP. If you determine that next year’s Medicare Advantage Plan will be costly while offering less coverage, you can cancel your Advantage Plan and return to an Original Medicare Plan if it offers better benefits.

Lastly, if you dropped your Medicare Advantage Plan and joined Original Medicare, you can add stand-alone Part D coverage for that period to help cover or lower the cost of prescription drugs.

What Is the Annual Enrollment Period?

The AEP, also called the Medicare Annual Election, is a fall Medicare enrollment window that runs from October 15 to December 7 each year.

During this fixed window, beneficiaries can enroll, drop, or change their Medicare plan coverage for the following year. Two weeks before the AEP begins, health insurance providers mail an ANoC to beneficiaries. You can use these two weeks to examine the changes to your plan and consider your next move.

The ANoC presents the changes to your plan’s coverage benefits and costs and provides a list of in-network health care providers and specialists. Unlike the OEP, beneficiaries can make multiple changes to their plan. The most recent adjustments will be incorporated into next year’s plan.

Changes made during the AEP will take effect on January 1 of the following year. You can make adjustments to your Medicare Advantage, Medigap, and Part D plans, unlike the OEP, where you can only make changes to your Medicare Advantage Plan.

What changes can I make during the Annual Enrollment Period?

One of the major differences between the AEP and OEP is the type and number of changes you can make to your plan. As previously explained, you can only make one change to your Medicare Advantage Plan during the OEP.

However, the AEP allows you to make multiple adjustments to an array of Medicare plans whenever you feel that the insurers’ changes will affect your health coverage in some way. During the AEP, you can

switch from an Original Medicare Plan (Parts A and B) to a Medicare Advantage Plan. Dissatisfied beneficiaries can switch from Original Medicare to Medicare Advantage and vice versa without any penalties.
switch from one Medicare Advantage Plan to another. You can switch between HMOs, PPOs, PFFS plans, SNPs, and MSAs during the AEP.
switch from a Medicare Advantage Plan without prescription drug coverage to one that includes prescription drugs and vice versa.
switch from one prescription drug to another based on your current needs.
drop your current provider’s plan and enroll in a different plan with a new provider.

Special Enrollment Periods

Special Enrollment Periods (SEPs) are exceptional periods outside the fixed yearly enrollment windows where you can join, switch, or drop your Medicare plan. You must experience certain qualifying life events in order to be eligible to sign up or make changes to your Medicare plan during the SEP.

Depending on the qualifying life event, the SEP can begin 60 days before or after the event. However, you can enroll in the Children’s Health Insurance Program (CHIP) at any time during the year.

Examples of qualifying life events include

moving to a location outside your current plan’s approved service area.
involuntarily losing your health care coverage. For example, if you lose your employer’s health plan, you can enroll in a new plan during the SEP; you don’t have to wait a whole year to enroll.
getting married or divorced. You’ll qualify to change your plan to reflect your new marital status.
no longer being covered by someone else’s health plan—for example, when you age out of your parents’ plan.
your provider ceasing to operate in your area.
a change in immigration status.
becoming eligible for low income subsidy assistance.

Which Is Better—the Annual or Open Enrollment Period?

Both the AEP and OEP are critical time frames to remember. However, the AEP offers more adjustment options and flexibility than the OEP.

For example, during the OEP, you can only make a single change to your Medicare Advantage Plan, and you can’t make any adjustments to the Medicare Part D plan. During the AEP, on the other hand, you can make as many changes as you need to your prescription drug coverage.

To compare the Medicare AEP and OEP, the AEP allows you to make multiple changes to your Medicare Advantage and Part D plans, while the OEP allows you to make only one change per year to your Medicare Advantage Plan.

It is clear that you can do a lot more during the AEP.

Can I Enroll in Medicare Outside of the Annual Election Period?

Yes, it is possible to enroll in Medicare outside of the Annual Election Period. First-time subscribers and individuals who meet certain criteria don’t have to wait to sign up for Medicare: they can enroll during the Initial Enrollment Period (IEP) and the SEP, respectively.

Initial Enrollment Period

The IEP is a 7-month period for individuals who are just turning 65. The IEP begins three months prior to the 65thbirthday and ends three months after the birthday month in which the individual first becomes eligible for Medicare.

Special Enrollment Period

SEPs are a time outside the yearly enrollment periods where individuals who have experienced qualifying life events can enroll or make changes to their Medicare plans.