Medicare enrollment typically begins at age 65, or under the age of 65 if an individual qualifies because of certain permanent disabilities. Many eligible individuals are surprised to learn that they only have a limited amount of time each year to make major changes to their Medicare coverage.

This period of time is known as Medicare’s Annual Enrollment Period (AEP). It occurs between October 15 and December 7 each year. After the Annual Enrollment Period ends, most Medicare recipients will need to wait until the next period to make changes to a plan unless they participate in the Medicare Advantage Open Enrollment Period or qualify for a Special Enrollment Period due to certain life events.

What Can Be Changed During the Annual Enrollment Period?
Each year, Medicare insurance recipients are given a chance to evaluate their coverage options. This is often important as medical needs change with time. If someone has Original Medicare, they can switch to a Medicare Advantage plan during this period, potentially easing the financial burden of healthcare costs. Likewise, AEP allows Medicare recipients to either opt into Part D coverage or make changes to existing Part D coverage. If a Medicare recipient did not sign up for Part D coverage initially and chooses to make the switch during open enrollment, a penalty may apply.

Why Does the Annual Enrollment Period Occur for a Limited Time?
Although waiting for open enrollment can be frustrating for some, the reason behind it actually makes a lot of financial sense and allows Medicare to continue operating. Like any other type of government program, Medicare relies on budgeting in order to provide coverage to eligible recipients. As a result, the program’s administration needs to know ahead of time how many people will be enrolled in which parts of Medicare in order to anticipate costs and ensure that funding will be available to cover expenses. If recipients could simply change coverage whenever they wanted, Medicare would have a harder time providing the funds required to meet recipient needs, and the program could potentially become insolvent.

Restrictions May Apply
Medicare recipients also need to know that there are some restrictions in place during AEP. Medigap plans do not qualify for changes during this period as they are typically guaranteed issue for your initial six months after you turn 65 and are enrolled in Part B. After that Initial Enrollment Period has ended, you may be subject to medical underwriting and be charged more or refused coverage based on pre-existing conditions.

Compare Your Options
Because the Annual Enrollment Period is limited, it would be wise to review your current coverage each fall and determine if your coverage continues to meet your needs. If your healthcare needs have changed, you can consider and compare other plans available in your area.

Related articles:

How the Medicare Part D Late Enrollment Penalty May Affect My Coverage(Opens in a new browser tab)

Do Medigap Plans Cover Pre-Existing Conditions? (Opens in a new browser tab)