What Agents and Brokers Need to Know for Open Enrollment Planning
What is AEP?
The general lingo, rules of compliance, and sheer volume of acronyms associated with healthcare insurance can be overwhelming for those new to the industry. But the two you will want to familiarize yourself with ASAP are AEP and OEP.
AEP — which stands for the interchangeable terms “Annual Enrollment Period” or “Annual Election Period” — pertains to Medicare’s open enrollment period. This annual event runs from Oct. 15 to Dec. 7., and during this window, Medicare beneficiaries can make changes to their plan for the following year.
What is OEP?
OEP is an acronym of a different color because, depending on the context, “Open Enrollment Period” can refer to multiple annual election periods. For instance, OEP can pertain to the annual open enrollment period for Medicare that runs from Jan. 1 to March 31. During this window, Medicare Advantage participants can update their coverage elections.
OEP can also refer to the open enrollment window for Affordable Care Act (ACA) Marketplace plans, and runs from Nov. 1 to Dec. 15 (with some states extending past Dec. 15). As with AEP, changes made during this period take effect on Jan. 1 of the upcoming year. Side note: This OEP window is the only one that applies to the under-65 set.
Getting organized before open enrollment season begins is key to setting yourself up for success and for serving your customers, no matter where they are in their healthcare journey or what their coverage needs might be.
Medicare vs. Medicare Advantage Plans
By definition, traditional Medicare is a national health insurance program available to anyone who is at least 65 years old, as well as Social Security Disability recipients.
Medicare coverage isn’t substantially different from private insurance plans. It pays a portion of healthcare costs and enrollees are required to pay coinsurance — typically 20% of the Medicare-approved amount after deductibles are met.
Part A of Medicare covers inpatient care in hospitals and skilled nursing facilities, as well as hospice and home health care services.
Part B covers “medically necessary” and preventative healthcare services. The majority of original Medicare beneficiaries have both Part A and Part B coverage.
Medicare Advantage was established in 1997 as a means of giving Medicare beneficiaries additional coverage options such as dental, vision, hearing, and prescription drug plans. Some plans include additional wellness benefits, like gym memberships, transportation coverage for doctor visits, and adult daycare services. In some cases, benefits can also be customized to treat specific conditions.
Most Medicare Advantage plans have Medicare provider networks but are governed by varying rules and degrees of restriction depending on the plan. Out-of-pocket costs usually include a co-pay, and can vary based on factors that include network requirements and benefits packages. However, with Medicare Advantage, costs are fixed with yearly limits.
While traditional Medicare still dominates the market, Medicare Advantage plans continue to gain popularity with consumers. Since its launch in the 90s, Medicare Advantage enrollees have steadily risen to 26 million people (enrollment increased 10% just since last year) and currently constitutes about 42% of all Medicare beneficiaries.
The Congressional Budget Office (CBO) projects that number will grow to 47% by 2029.
OEP for ACA Marketplace Plans
Open Enrollment Period 2022 most frequently refers to the window during which agents can peddle ACA Marketplace plans to both under and over-65 clients.
This year, the COVID-19 crisis compelled a Special Enrollment Period (SEP) under the Biden administration’s American Rescue America Plan that only recently ended for most states and which continues in others. Subsidies and reduced pricing as well as consumer need helped drive the SEP and resulted in the enrollment of more than 2.5 million uninsured Americans.
That said, according to the Centers for Disease Control and Prevention (CDC), nearly 10% of the U.S. population remains uninsured, making the open enrollment period that begins on Nov. 1 a prime opportunity to enroll new clients.
During this window, prospects with pre-existing conditions can purchase approved ACA plans and those already enrolled can make changes to existing plans. Coverage for both groups take effect on Jan. 1, 2022.
What Changes Can Clients Make During Fall AEP?
As an agent, your clients rely on you to help them make Medicare coverage decisions that best suit their needs. That means understanding what changes they’re allowed to make to health and drug plans during the AEP window, and how those changes can impact coverage and cost.
For instance, during AEP in the fall, clients can:
- Choose a new Medicare Advantage plan
- Enroll in a new or standalone Medicare Part D prescription drug plan
- Switch from Medicare Advantage to an original Medicare plan
- Purchase a Medigap plan (Note: this is contingent on where the client lives and unnecessary if the client has Medicare Advantage)
- Cancel Part D coverage
Make sure clients understand that new coverage and changes to existing Medicare plans must be signed, sealed, and delivered by Dec. 7 and will not take effect until Jan. 1 2022.
If you’re not sure what plans or changes you should recommend to prospects and existing clients, consider investing in a software solution like Quotit. Not only will Quotit allow you to quickly compare hundreds of plans from multiple carriers, but also easily generate proposals and enroll clients.
Changes Available During Medicare Advantage Open Enrollment Period
Two of the most compelling perks for Medicare Advantage clients is that they can enroll even with pre-existing conditions and costs for certain services are capped at original Medicare-approved amounts— including chemotherapy and dialysis.
Another bonus is the Medicare Advantage Open Enrollment Period that kicks off on Jan. 1 of each year offers beneficiaries a second chance to make changes to their plans.
Changes allowed during this window include:
- Switching to another Medicare Advantage plan
- Changing prescription drug plans
- Switching to a new plan with a different carrier
- Dropping Medicare Advantage and returning to a traditional Medicare plan
Enrollment Marketing Guidelines
Just as your Medicare and Medicare Advantage clients are governed by federal rules and guidelines, so are you, at least in terms of how you handle enrollment marketing. Adhering to these set-in-stone directives in your open enrollment planning will help ensure a profitable, friction-free AEP season.
The Medicare Communications and Marketing Guidelines (MCMG) lay out in excruciating detail precisely what you can and cannot do when marketing Medicare to prospects. It’s a good idea to familiarize yourself with the guidelines and check at least once a quarter for updates.
Remember, the Centers for Medicare & Medicaid Services (CMS) strictly prohibits marketing of the next plan year prior to Oct. 1. That includes discussing coming changes to plan options, rates, and benefits packages on the phone, by email, in person, and during sales and marketing events.
Once Oct. 1 rolls around, all sales and marketing events must be registered with all carriers. Additionally, you’re required to adhere to the Permission to Contact rule, which dictates that Medicare prospects must initiate contact and must also specify how they wish to be contacted, whether by email, phone call, or even direct mail. Cold calling and canvassing door-to-door is prohibited under MCMG, and emails must include an opt-out option.
A word of caution: If you’re thinking of skirting the MCMG rules, even just a little bit, be aware the CMS undertakes “marketing surveillance” every AEP season and they use “secret shoppers” to catch you in the act.
The safest route to steering completely clear of any snags or allowing a verboten client communication slip through the cracks is to invest in a quality CRM like Quotit to help you stay on track and out of hot water.
A robust turnkey solution, Quotit’s automated marketing workflows help make keeping up with appointments, follow-ups, and renewals a snap during AEP and OEP. Additionally, our end-to-end CRM also includes a robust marketplace to purchase qualified leads, and offers a leads management system to help you remain in tune with ongoing client conversations, outstanding proposals, and upcoming opportunities as the season unfolds.