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IEP, AEP, OEP, SEP and Plan Switches

If there was an Olympic sport based around who has the most acronyms Medicare would probably win gold. It’s not enough that there is Parts A-B-C-D and there is Plans A-B-C-D-F-G-K-L-M-N. On top of that, we also have IEP, AEP, SEP, and OEP to also contend with. It’s like being trapped in a zombie movie, only all the zombies are letters.

Let’s try and clear it up using Cliff Notes:

1. You sign up for Medicare for the first time during your IEP.

2. You can change plans every year (if you want to) during AEP.

3. If you have special circumstances for changing your plan at any time you get an SEP.

4. As for OEP, it’s really complicated, so let’s not have a Cliff Note for that one.

The next order of business, which bears repeating from the last section: You don’t need to reenroll each year, or ever, as long as you want to keep your same plan.

The above statement, even though it uses the word “bears” does not apply to bears in the forest, but rather to people on Medicare plans who do not need to reenroll during AEP each year. Note that I cleverly used “bears” to reinforce the point that you don’t have to reenroll during AEP because so many clients are confused during Annual Enrollment Period by if they do.

Bears, by the way, are not actually eligible for Medicare for two reasons. Firstly, because they are bears. Secondly, bears only live to be 25 which is well below the age 65 when we start Medicare.

IEP (Initial Enrollment Period) 

This is the period of time when you first sign up for Medicare. It is like your debutante, rumspringa, bar or bats mitzvah: the time when you age into entering Medicare. Your IEP starts on the first of the month that’s takes place three months before you turn 65.

In the middle of the 7-month period is the month they actually turn 65. This is the month your Medicare coverage actually starts beginning on the first day of your birth month. IEP also includes the three months after you turn 65.

You can apply for your Medicare anytime during your 7 month IEP period. However, it is important to know that if you wait until after your birth month to apply then your Part B can be delayed by up to two additional months. Not knowing this twist in the Medicare start rules has left many people with a coverage gap, waiting an extra two months for their Part B to kick in.

Your IEP can also begin at a younger age if you have qualified for disability after a waiting period of 24 months. If this is your situation, once you turn 65 you get a second IEP.    

AEP (Annual Enrollment Period) 

This is often referred to as well as OEP (Open Enrollment Period) a time of year between October 15 and December 7th each year when your mailbox fills up with so many brochures for Medicare plans that on December 8th you can invite your friends over for an AEP brochure bonfire and marshmallow roast. At your bonfire you can also celebrate the end of the annoying Joe Namath Medicare TV commercials for another year. Given that Joe’s a millionaire, we wonder too, “Is Joe really that excited about getting free meal deliveries after hospital stays?”

Annual Enrolment period is when you can review your Medicare Advantage Plan or stand-alone Prescription Drug Plan to see if it is still the right choice for next year. If there is a better plan for next year then you can make a switch. It is important to note that AEP does not apply to changing from one Medigap supplement to another. You can do this at any time without the need for AEP, subject to being able to pass the medical questionnaire.

The vast majority of people are happy with their existing plans and do not make a switch. According to CMS statistics, only around 8% of people change their Medicare Advantage plan during AEP and 10% of people who are on stand-alone Prescription Drug Plan make a switch. This indicates a lot of satisfaction. Imagine if the divorce rate was only 8%.

Common reasons people might want to switch are: They generally don’t like their plan or feel they have gotten poor service; they have a doctor who has left the network; another plan is offering benefits that are more favorably; their prescriptions have changed and another plan formulates their drugs more favorable so they have fewer copays; another plan will save them money overall.

As your healthcare agent, we will keep you apprised of any changes to plans each year during AEP. We are happy, as well, to schedule a time to meet with you by phone or through email and reformulate your prescriptions or do any other research you want. Be patient though, as AEP lasts from October 15 to December 7th to give healthcare agents ample time to help all of their clients who might want to make a switch. AEP, for agents who sell Medicare plans, is like tax season is for accountants.

Changes you can make during AEP are:

1. From one Medicare Advantage plan to another. With no medical questions or underwriting.

2. From Original Medicare to a Medicare Advantage plan giving up your Medigap supplement and stand-alone Prescription Drug Plan. No medical questions or underwriting.

3. From Medicare Advantage to Original Medicare with a Medigap Supplement. This will, however, require you to pass the Medigap questionnaire and you can be turned down. If you do get approved and make the switch, AEP will also be used to join a stand-alone Prescription Drug Plan as you’ll be losing drug coverage from your Medicare Advantage plan.

Any plan change you make will take effect on January 1.

OEP-MA (Open Enrollment Period for Medicare Advantage) 

Between January 1 and March 31 each year you can make one further Medicare Advantage plan switch but only from one Medicare Advantage plan to another. Or as I call it: The-One-Last-Chance-To-Change-Your-Mind-Enrollment-Period.

The purpose of this OEP is to give you a Do-Over if you changed to a Medicare Advantage plan, tried it out but didn’t like it. If this happened then instead of being stuck for the rest of the year you can use this OEP period to switch back to your old plan or to pick an entirely different new plan. It’s kind of like being given a restaurant Open Enrollment Period to send back your meal if you tasted it and then realized you don’t like goose pate.

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