- August 4, 2020
Did you know you’ll spend more money on medications than on anything else in your health care? That’s right, medications are the biggest expense in healthcare. This means being on the right drug plan (and staying on the right drug plan from year to year) is very critical to your health coverage.
That’s why today, we’re diving into the topic of switching drug plans during the Annual Enrollment Period (AEP). We’ll show you who qualifies to switch drug plans during the AEP and teach you how to make that switch. Let’s get started.
Is Your Rx Plan Included?
When you enroll in Medicare, you can either choose to get a Supplemental plan or an Advantage plan. If you go with an Advantage plan, the prescription drug plan will be included as part of the package.
If you chose to stay in original Medicare and get a Supplemental plan, you will have to purchase a separate drug plan. It is not included.
So whether you have a separate or embedded drug plan, if you want to switch to a different drug plan, you can do so during the Annual Enrollment Period (AEP). Here’s how it works.
Review the ANOC
The AEP lasts from October 15th through December 7th. Every year right before the AEP starts, your drug plan insurance company will send you an Annual Notice of Change (ANOC). The ANOC outlines all the changes they’re making to your plan in the coming year. Keep in mind, they can make any changes to your plan they want, from formulary size to monthly premiums. So while you may have liked your plan this year, it may not be a good fit in the coming year.
The problem is, many people don’t look through their ANOC carefully (or at all). So when the changes go into effect January 1, they’re shocked. Unfortunately, since they didn’t see those changes in time and fail to take advantage of the AEP, they can’t switch to a new plan until the next calendar year.
Here’s what you should look out for when going through your drug plan’s ANOC:
- Will the monthly premiums change? If so, by how much? Slight raises are normal, but some plans raise their rates drastically. You don’t want that.
- Is the formulary going to change? They might add or drop medications that you’re taking, so read this section carefully and make sure your drugs are still covered on the plan.
- Are they making tier changes to your medications? Each medication is assigned a tier level from one to five. The lower the tier, the lower the copays you have to pay at the pharmacy. If your medication has been a tier two but is now being bumped to tier four, you can expect to pay hundreds of dollars more each month in copays.
If you carefully look through the ANOC but don’t see any changes you’re unhappy with, you can choose to stay on your current plan. If you decide to stay on your plan, no other action is required, you will automatically be renewed for the coming year.
However, if you’re unhappy with the changes and no longer feel like the plan is a good fit, you can switch to a new plan from October 15th through December 7th.
Switching Drug Plans During the Annual Enrollment Period
About two or weeks before the AEP, you’ll receive an Annual Notice of Change. Carefully look through the ANOC to determine if you want to switch to a new drug plan. If you do want to switch, you can make the switch during the Annual Enrollment Period. Go to Medicareschool.com/AEP and follow the steps outlined above to find a new drug plan that works for you.
We understand how difficult making the right Medicare decisions can be. To take the next step, watch our full course here, or schedule a free one-on-one call with a certified Medicare School Guide who can answer your questions, compare plans options, and even help you enroll. Click here to get started.