Medicare Part D plans are sold by private insurance companies. These plans are approved annually by Medicare for sales to consumers. The plans run on a calendar year, annual basis. Part D is consistently the most complex, confusing part of Medicare for most people who are Medicare-eligible. One of the most challenging and confusing aspects of Part D is understanding the enrollment restrictions and guidelines that apply to Part D.
The most important one of these to understand is the fact that you cannot sign up for, change, or disenroll from a plan whenever you want. You must be in a valid enrollment period in order to do so. Below, we’ve elaborated on these enrollment periods as a reference point for those looking to enroll in, disenroll from, or change Part D plans.
Initial Coverage Election Period (ICEP): The ICEP occurs when you are first eligible for Medicare. Your ICEP starts three months before you are eligible for both Medicare Part A and Part B. It ends three months after the month during which you are first eligible. Including the month that you actually turn 65, it spans 7 months. In an example, if you turn 65 in June, your ICEP would start March 1 and run through September 30. You could enroll in a plan prior to June 1 to start June 1. If you enroll in a plan after June 1, the plan would start on the first day of the following month.
Annual Election Period (AEP): The annual election period is the time period that you “hear” about most often. This is the time period that occurs at the end of each calendar year, during which everyone who already has a Medicare Part D plan can enroll in, disenroll from, or change the Medicare Part D coverage. For 2012, this period will run from October 15 to December 7. During AEP, you can, and should, evaluate your current plan to make sure it is the most advantageous choice for the upcoming year. The plans run by the calendar year, so once the AEP ends, you are “locked in” to the plan for the upcoming year. So, it is important to understand this period and take advantage of it. NOTE: This period does not apply to Medigap plans. See: When Can you Change Medigap Plans
Special Election Period (SEP): SEP periods vary greatly. There are many different individual SEPs, during which you can enroll in or make changes to your Part D coverage. Here are a few of the most common SEPs: losing employer coverage, moving to a new state, moving out of your plan’s service area, being institutionalized, and your current plan terminating service in your area. There are, of course, many more SEPs, but these are the ones that are most frequently used. SEPs can occur during the year, not necessarily only at the end of the year. When you in an SEP, you generally have only one “election” – one change to pick another plan or sign up for a plan.
Overall, it is very important to understand the election periods that pertain to Medicare Part D, in large part because there are some penalties associated with not signing up for a plan when you are eligible. Also, if you try to change plans outside of a valid enrollment period, you will not be able to do so. So it is important to make any changes during the correct time period to avoid getting “locked in” to a plan that you don’t want or that doesn’t serve your interest.
If you have any questions about this or want to discuss Medicare Part D enrollment in more detail, please contact us on our website or at 877.506.3378.