Personal Finance

There’s still time to change your Medicare Advantage Plan for 2021. How to do it

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Key Points
  • Up until March 31, you can swap your Advantage Plan for another or drop it and return to basic Medicare (Parts A and B).
  • Be sure to do your due diligence before finalizing your decision.
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If you've discovered your 2021 Medicare Advantage Plan is not a good fit for you, now is the time to do something about it.

Through the end of March, Advantage enrollees can either drop their plan and return to basic Medicare (Part A hospital coverage and Part B outpatient care) or switch to another Advantage Plan.

If the latter is your preference, there are a few things to watch for before you finalize your choice, experts say. For starters, you generally won't get another chance in 2021 to change your mind.

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"Be aware that you are now locked into that plan for the rest of the year unless you [qualify] for a special election period," said Danielle Roberts, co-founder of insurance firm Boomer Benefits.

"Considering the lock-in period, due diligence is required," Roberts said. 

Roughly 63 million individuals are enrolled in Medicare, the majority of whom are age 65 or older, according to government data. The remainder are younger with disabilities or individuals with end-stage renal disease.

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About 43% (27 million) get their benefits delivered via Advantage Plans, which are offered by private insurance companies and typically include Part D prescription drug coverage. The remainder stick with basic Medicare and may pair it with a stand-alone Part D plan and a supplemental policy (aka Medigap), both of which are also offered by private insurers.

While Medicare's fall open enrollment is for changing your coverage if you want to, some beneficiaries only discover afterward that the Advantage Plan they picked is not ideal.

"The most common reason people change is that they joined a plan during the [fall enrollment window] without realizing that one of their doctors is not in the network or one of their medications is not covered on the formulary," Roberts said.

Considering the lock-in period, due diligence is required.
Danielle Roberts
Co-founder of Boomer Benefits

Your evaluation should not stop there, however.

For 2021, the average beneficiary has access to 33 Advantage Plans, research from the Kaiser Family Foundation shows. Altogether, 3,550 such plans are available, up 13% from 2020.

Of the plans that include prescription drug coverage, more than half (54%) charge no premium, and 96% of beneficiaries have access to one of them in 2021, according to Kaiser.

Premiums are not the only aspect to consider: Generally speaking, the lower the premium, the more you'll pay in cost-sharing — i.e., copays, coinsurance and deductibles. 

Additionally, although Advantage Plans come with out-of-pocket maximums (unlike basic Medicare), those amounts can be as high as $7,550 in 2021 for in-network coverage before the plan pays 100% of covered services. The combined in- and out-of-network maximum is $11,300.

It's also important to understand the differences between a PPO and an HMO, Roberts said. HMO plans, which provide coverage only if your providers are in-network, are often cheaper. However, they also may have more requirements like needing a referral to see a specialist.

"This can sometimes slow down how quickly you can get to see a specialist, so it needs to be considered," Roberts said.

Also, depending on your specific situation, you should check the in-network coverage of medical equipment providers, diabetes-management suppliers and home health companies, Roberts said.

"If you use any of these services, it's a good idea to check with those providers to ensure that you won't lose access to them when you switch," she said.