Most people understand the benefits of signing up for Medicare. Yet once they've signed up, a lot of retirees don't realize that they have the option to make changes to their Medicare coverage each and every year. The regular Medicare open enrollment period for 2018 coverage has already passed, having started in mid-October and ended in early December.
For those who are on Medicare Advantage, there's a potential second bite at the apple. A more limited set of options is still available for another month. If you're not happy with your current coverage, you have some options -- but you need to act quickly, because after Feb. 14, you'll lose your final chance to make this change for 2018.
How to go back to original Medicare
The current opportunity for Medicare Advantage participants is called the Medicare Advantage Disenrollment Period. Starting on Jan. 1, those who are part of a Medicare Advantage plan have the ability to leave their plan and switch back to traditional Medicare. If you do so, then you'll get your hospital coverage under Medicare Part A and your medical coverage under Medicare Part B, giving up your private insurer-provided healthcare coverage under Medicare Advantage.
Many Medicare Advantage participants also get prescription drug coverage as an integrated offering within their plans. Therefore, Medicare also allows you to enroll in a Part D prescription drug plan if you disenroll from Medicare Advantage, so that you'll be able to replace your old drug coverage with a substitute.
Why the Medicare Advantage Disenrollment Period isn't as good as open enrollment
The problem with the Medicare Advantage Disenrollment Period is that there's not very much that you can do. Open enrollment lets you make all sorts of moves, such as moving from traditional Medicare to Medicare Advantage, switching between Part D drug plans, or making a change from one Medicare Advantage private insurer to another.
With the disenrollment period, the only thing you can do is what the name says: disenroll from Medicare Advantage and go back to original Medicare. You can't go in the reverse direction, nor can you switch to a different Medicare Advantage plan provider. You also can't make a switch between drug plans.
Moreover, some plans aren't eligible for the disenrollment period. Those who have special Medicare Advantage plans known as a Medicare Medical Savings Account plan, you're not allowed to shift out of those plans back to original Medicare at this time. Again, only the regular open enrollment between mid-October and early December gives you that level of flexibility.
What else you need to know
If you decide to disenroll from Medicare Advantage, the change takes effect as of the first day of the month after you make the move. That gives you a limited time to make changes to become effective as of Feb. 1, and those who put off a move until closer to the Feb. 14 deadline will have to wait until March 1 for their original Medicare coverage to become effective. Changes to prescription drug coverage also go into effect as of the first day of the following month.
Also, the way that original Medicare, Medicare Advantage, and supplemental Medigap policies interact can be tricky. Ordinarily, if you sign up for traditional Medicare when you first become eligible, you're guaranteed the right to sign up for a Medigap policy. However, those who use the disenrollment period to go back to original Medicare don't necessarily have the same guarantee. There's a lot at stake, including coverage for unpaid coinsurance, copays, and other expenses that traditional Medicare doesn't cover. You'll therefore need to be careful not to create a gap in coverage that you can't fill later on.
If you find that Medicare Advantage isn't meeting your needs and would prefer what traditional Medicare gives you, then the Medicare Advantage Disenrollment Period can be a great time to make a move. But if you're interested, don't let the clock run out on this limited-time opportunity.