Do Medicare Advantage Plans Automatically Renew?
Understand if your Medicare Advantage plan automatically renews each year. Learn about the annual process, key changes, and your enrollment options.
Medicare Advantage plans, also known as Medicare Part C, offer an alternative to Original Medicare (Parts A and B). These plans are provided by private insurance companies that are approved by Medicare, and they must cover all the benefits of Original Medicare. Many plans also include additional benefits like prescription drug coverage, dental, vision, and hearing services. A common question among beneficiaries is whether these plans automatically renew each year.
Automatic Renewal of Medicare Advantage Plans
Medicare Advantage plans generally renew automatically each year if the plan remains available in the beneficiary’s service area. If satisfied, no action is required to maintain coverage. This helps prevent gaps in health insurance coverage for beneficiaries. This automatic renewal depends on the plan’s availability and continued premium payments. Before renewal, beneficiaries receive an Annual Notice of Change (ANOC) detailing the upcoming year’s plan modifications.
Annual Review and Notification Process
Each fall, Medicare Advantage plans send an Annual Notice of Change (ANOC) to members by September 30th. The ANOC outlines modifications to the plan’s benefits, costs, and terms effective January 1st. This includes changes to monthly premiums, deductibles, copayments, out-of-pocket maximums, prescription drug formulary, and provider/pharmacy networks. Reviewing this document helps beneficiaries assess if their renewed plan meets their needs. The Annual Enrollment Period (AEP), from October 15th to December 7th, begins after beneficiaries receive their ANOC, allowing time to make changes.
Plan Changes and Discontinuations
While Medicare Advantage plans auto-renew, their terms can change significantly each year. These changes, including higher premiums, different deductibles, altered services, or adjusted provider networks, are communicated through the Annual Notice of Change (ANOC). Beneficiaries should review these details to ensure the plan aligns with their healthcare needs and budget.
In some cases, a Medicare Advantage plan might be discontinued and no longer offered in a particular service area. This can happen if the private insurance company decides to stop offering the plan or if Medicare terminates its contract with the insurer. When a plan is discontinued, beneficiaries receive a separate notification outlining their options.
If a plan is discontinued, beneficiaries are typically granted a Special Enrollment Period (SEP) to choose a new Medicare Advantage plan or to revert to Original Medicare, potentially adding a Part D prescription drug plan and/or a Medigap policy.
Beneficiary Actions During Enrollment Periods
Receiving the Annual Notice of Change (ANOC) in September prompts beneficiaries to review their current Medicare Advantage plan. This document helps individuals understand all changes their plan will undergo for the upcoming year, even if it automatically renews. After reviewing the ANOC, beneficiaries have specific opportunities to make changes to their coverage.
The primary period for making changes is the Annual Enrollment Period (AEP), from October 15th to December 7th annually. During this time, beneficiaries have several options.
They can allow their current plan to automatically renew with its updated terms, switch to a different Medicare Advantage plan, or switch back to Original Medicare. Switching to Original Medicare may involve enrolling in a standalone Part D prescription drug plan and considering a Medigap supplemental policy.
Another opportunity for those already in a Medicare Advantage plan is the Medicare Advantage Open Enrollment Period (MA OEP), running from January 1st to March 31st. During the MA OEP, individuals can make a single change, such as switching to a different Medicare Advantage plan or returning to Original Medicare. It is advisable for beneficiaries to compare available plans each year, considering their health needs, budget, and preferences for providers and prescription drug coverage.