Open enrollment allows you to review your plan and other options to see which Medicare plan works for you.

Medicare open enrollment runs from Oct. 15 to Dec. 7 each year. Changes made during open enrollment begin on Jan. 1 of the following year. There's also a second, more limited open enrollment that starts in January. 

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Though seniors can switch plans annually, a 2019 Kaiser Family Foundation study found that only 8% of Medicare Advantage plan members and 10% of Medicare Part D plan members voluntarily switch plans for the coming year. 

That can be a mistake. Medicare Advantage and Part D plans can change each year and you may find a new plan that works better for your specific situation. 

Now, let's walk through what's new this year for Medicare, Medicare open enrollment options and what you need to know.

Medicare open enrollment options

Medicare open enrollment runs from Oct. 15 to Dec. 7.

During the Medicare open enrollment period, you can:

  • Do nothing and keep your current Medicare medical and drug coverage.
  • Switch to a Medicare Advantage plan from Original Medicare.
  • Switch to Original Medicare from a Medicare Advantage plan.
  • Change Medicare Advantage plans.
  • Change Part D prescription drug plans, sign up for a drug plan if you don't have one now or drop drug coverage.

There is a second, more limited open enrollment from Jan. 1 to March 31. During that time, you can only:

  • Switch Medicare Advantage plans.
  • Move from a Medicare Advantage plan to Original Medicare. 

Medicare's open enrollment is different from the Affordable Care Act marketplaces, which are also called the exchanges. Open enrollment for those plans usually starts on Nov. 1 and stretches to at least Dec. 15.

Some seniors mistakenly think they can enroll in a Medicare plan through the ACA health insurance marketplaces. However, you can't buy a Medicare Advantage plan on the exchanges. 

Key Takeaways

  • US citizens are eligible to enroll in Medicare at age 65, and have up to three months after their birth month to complete enrollment
  • Once enrolled in Medicare, it is possible to make changes to your plan during the open enrollment period, annually between mid-October and early December
  • Breadth of services and supplemental benefits is a main factor for those enrolling in Medicare and Medicare Advantage
  • Medicare Advantage plans often require individuals to use health care providers within specified networks, but may provide benefits beyond those with traditional Medicare

Medicare enrollment when you turn 65

When you turn 65, you have until three months after your birth month to enroll in a plan.

If you have an ACA marketplace, workplace or individual health insurance policy, you can keep it until your Medicare coverage begins. Once your Medicare starts, you can cancel your marketplace or private health insurance policy without penalty. Suppose you're continuing to work and receive group health insurance from your employer. In that case, you may be able to delay signing up for Medicare Part B (without penalties) until your employment terminates.

Part A, which covers inpatient care, is usually premium-free. So, you may want to enroll in Part A and keep your other coverage that covers outpatient and physician office visit care.

Discuss with your employer your healthcare coverage, if this situation applies.

Choosing a Medicare plan

It's a good idea to review your coverage annually and see if your plan is meeting your healthcare needs.

You should receive an "Annual Notice of Change" from your plans before open enrollment begins. Review the information to understand Medicare coverage and costs for next year.

Among the questions to ask:

  • Does the prescription drug plan cover your medications? What are the coverage rules for drugs? 
  • Are your doctors and hospital in the health plan's network? Do you need to get referrals to see specialists?
  • How much will you pay in premiums and out-of-pocket health care costs, such as deductibles, copayments and coinsurance?
  • What is the plan's quality rating?
  • Will you have coverage when you're out of state or the country?
  • Do you have access to other coverage, such as group health through a current or former employer? How will Medicare work with that insurance?

What's most important when comparing plans? Insure.com recently surveyed 505 people with Medicare about that question. Here's what those with Original Medicare and Medicare Advantage chose as most important:

Original Medicare

  • Breadth of services, including supplemental benefits -- 23%
  • Low deductibles and out-of-pocket costs -- 22%
  • Low premiums -- 16%
  • No referral requirement -- 11%
  • Provider network -- 8%

Medicare Advantage

  • Breadth of services, including supplemental benefits -- 28%
  • Low deductibles and out-of-pocket costs -- 26%
  • Provider network -- 16%
  • Low premiums -- 10%
  • No referral requirement -- 8%

The results are similar, but you'll see slight differences, such as Original Medicare beneficiaries are more interested in lower premiums than Medicare Advantage beneficiaries. Meanwhile, Medicare Advantage members want a breadth of services and lower out-of-pocket costs. 

What’s new in Medicare in 2021

The federal government has made a handful of changes in Medicare for 2021.

Original Medicare premium increases

People with Original Medicare can expect to see Part B premiums and deductibles increase. How much more you'll pay hasn't been decided yet, though. Medicare trustees earlier in 2020 agreed to increase the Part B premium for most Medicare beneficiaries from $144.30 to $148.50 for 2021. 

Also, Part B premiums are higher for people with incomes above $87,000 for individuals and above $174,000 for married joint filers. In 2020, individuals with income over $87,000 paid between $202 and $491 monthly, depending on income. 

Medicare Advantage changes in 2021

Private insurers offer Medicare Advantage plans. The program has grown in membership and companies offering plans over the years. 

CMS said about 42% of Medicare members (26.9 million people) will likely enroll in a Medicare Advantage plan in 2021. 

People in Medicare Advantage will more choices and lower premiums in 2021. The Centers for Medicare and Medicaid Services (CMS) estimated there will be more than 4,800 Medicare Advantage plans in 2021. 

The average Medicare Advantage plan options for people will be 47 plans per county in 2021 -- an increase from 39 plans in 2020. People living in rural areas usually have fewer Medicare Advantage plan options, but CMS said there will be 2,900 plan options for rural counties in 2021. 

Americans will also see lower costs. CMS estimates that:

  • The average monthly Medicare Advantage premium will decrease to $21 in 2021. Premiums have fallen from $23.63 in 2020 and $26.87 in 2019. 
  • The out-of-pocket maximum is $7,550 in 2021 -- an increase from $6,700 in 2020. The out-of-pocket max is the most you'll spend for health care services before the health plan pays for all of the care. 

Here are other changes coming to Medicare Advantage in 2021, including new supplemental benefits:

  • Medicare beneficiaries with end stage renal disease will be eligible to enroll in a Medicare Advantage plan. Previously, people with that disease could only enroll in Original Medicare. 
  • More than 94% of Medicare Advantage plans (covering 20.7 million people) will offer telehealth benefits. That's an increase from about 58% in 2020. 
  • Fifty-three Medicare Advantage plans will offer increased access to palliative care and integrated hospital care through a new insurance design program. 
  • About 730 plans will provide new supplemental benefits, including adult day health services, caregiver support services, in-home support services, therapeutic massage and home-based palliative care. 
  • About 500 plans will offer lower copays and supplemental benefits, such as meals and transportation, for enrollees with certain conditions, including congestive heart failure and diabetes. 
  • About 920 Medicare Advantage plans will provide non-primarily health-related benefits to help people with chronic conditions manage their diseases. These benefits include home cleaning services, meal home delivery and transportation for non-medical reasons, such as grocery shopping. 
  • More than 400 plans will take part in a model with supplemental benefits, including healthy food and meals, transportation and reduced cost-sharing. 

Medicare Part D changes in 2021

People with Original Medicare can enroll in a Part D prescription drug benefit plan. Here are changes in the program in 2021:

  • The Part D Senior Savings Model allows Medicare beneficiaries to lower insulin costs to $35 a month. CMS said people with those plans may save on average $446 per year on out-of-pocket insulin costs. There are more than 1,600 Part D and Medicare Advantage plans that will provide the lower-cost insulin program.  
  • Part D plans' monthly Explanation of Benefits will include information on drug price increases and lower-cost therapeutic alternatives. CMS implemented this change as a way to better inform beneficiaries about drug costs and possible lower-cost options. 
 

Original Medicare vs. Medicare Advantage

Medicare beneficiaries can choose between Original Medicare or Medicare Advantage. Here's what you need to know about the two programs and their differences:

Original Medicare

The federal government runs Original Medicare, which includes Part A and Part B. Part A covers hospital care; Part B covers doctor visits, outpatient care, lab work, X-rays and preventive services.Medicare

You likely won't pay a premium for Part A coverage if you and your spouse paid Medicare taxes while working. You do have to pay a deductible, however, before hospital coverage kicks in.

You pay a monthly premium for Part B, as well as a deductible and coinsurance.

Original Medicare lets you see any doctor or go to any hospital that accepts Medicare.

You can add a prescription drug plan -- Part D -- to your Parts A and B plans. Part D private insurers sell drug plans, which are approved by Medicare. You pay a monthly premium for a drug plan. Part D plans aren't available in Medicare Advantage, but many of those plans have their own prescription drug plans.

In addition, you can buy a supplemental plan, called Medigap, to help cover some of your out-of-pocket costs. Private companies sell Medigap plans, which are standardized by letters A through N in most states.

Medigap plans are not insurance. Instead, they help you pay for healthcare costs.

Medicare Advantage

Private companies approved by Medicare sell Medicare Advantage plans. These plans usually operate like health maintenance organizations or preferred provider organizations found in employer-sponsored health insurance. 

You must use doctors or hospitals in the plan's network, or you pay more out of pocket for care. Most plans cover prescription drugs and offer dental, fitness, vision and hearing benefits.

Medicare Advantage plans often offer supplemental benefits that go beyond traditional medical care. Those benefits are one way Medicare Advantage differs from Original Medicare. When comparing plans, make sure to understand the specific supplemental benefits in a Medicare Advantage plan. They differ. 

You can use the Medicare Plan Finder when comparing Medicare Advantage plans. The tool lets you compare Original Medicare, Medicare Advantage and Part D prescription drug plans. Medicare enrollees can choose between Medicare and Medicare Advantage. They can also see about pairing a Part D plan with original Medicare. Part D is not available to people with Medicare Advantage since Part C plans often have prescription drug coverage. With that tool, you can also explore your options for Medigap.

You cannot buy a Medigap plan if you have Medicare Advantage.

How much does Medicare cost?

Medicare costs vary by type of plan. Here's a run down on averages? 

Part A - Nearly all Medicare beneficiaries don't pay a monthly premium for Part A. However, if you're not eligible for premium-free coverage, you'll pay $437 for Part A. The deductible is $1,484 for each benefit period. (A benefit period begins the day you're admitted as an inpatient in a hospital or skilled nursing facility (SNF). The benefit period ends when you have not received any inpatient hospital or SNF for 60 days in a row.) 

Part B - The standard Part B premium is $148.50. People who make more than $87,000 for individuals or $174,000 for joint filers pay more for premiums. The annual deductible for 2021 is $1203. Once you meet that deductible, you usually pay 20% of your Part B healthcare costs. 

Part C - The average monthly Medicare Advantage premium is $21 for 2021. Deductibles vary by plan, so you want to make sure you understand the out-of-pocket costs when comparing plans. Many Medicare Advantage plans offer zero premiums but make sure to read the fine print to see about those plans' out-of-pocket costs when you need care. The out-of-pocket maximum for Medicare Advantage plans is $7,550 in 2021 -- an increase from $6,700 in 2020.

Part D (drug plan) - Most Medicare drug plans charge a monthly fee that varies by plan. The average monthly basic Part D premium for 2021 is $30.50, which is similar to 2020. It's also less than the $32.50 in 2019 and $33.59 in 2018. Deductibles vary, but no Medicare drug plan may have a deductible more than $445 in 2021, an increase from $435 in 2020 and $415 in 2019. 

Where to get help

Visit Medicare.gov to get information about plans in your area or call 1-800-MEDICARE. You can also get help by contacting your State Health Insurance Assistance Program. The "Medicare & You" booklet is available for download on the Medicare website.