Old Way with MedicareTraditional Medicare does not cover everything so there are Medicare Supplements the many different insurance companies sell. When you have Traditional Medicare, you must have a Medicare Prescription Plan or you have to pay a Late Enrollment Penalty based on how many months you were eligible for Medicare and did not have a qualified prescription drug plan.
New Way with MedicareIn 1997 Medicare Plus plans were established and they changed to Medicare Advantage in 2003. They were designed to remove the government from the administration of the benefits of Medicare as the needs of individuals are different based on the care available in their location. Therefore individual companies are allowed to offer HMO and PPO Medicare Advantage Plans that are registered with each state's department of insurance. Plans may differ from one part of the state from another.
At a minimum, Medicare Advantage Plans must provide the standard benefits of traditional Medicare. Most plans include prescription drug coverage, so there is no need for a separate prescription drug plan. In fact, Medicare Supplement Plans are not compatible with Medicare Advantage and if you switch to a Medicare Advantage Plan, you must end all Medicare Supplement Plans with the exception to prescription drug plans in case your new Medicare Advantage Plan does not include prescription drug coverage.
Enrollment in Medicare AdvantageTo be eligible for a Medicare Advantage Plan you must have Medicare Part A and Part B.
- Initial Enrollment Period (IEP) - You may enroll 2 months before Medicare Part B begins, the month it begins and 2 months after. These are the same rules as Medicare Supplement Plans.
- Annual Enrollment Period (AEP) - October 15th through December 7th every year for everyone with Medicare Part A and Part B. During this time, you may elect to take a Medicare Advantage Plan including those who have never elected a plan before.
- Open Enrollment Period (OEP) - Those with a Medicare Advantage Plan may change to another Medicare Advantage Plan from January 1 to 31.
- Special Election Period (SEP) - There are a variety of reasons you may qualify for a SEP including moving, switching to a 5 star plan, and others including if you have Medicare and Medicaid.