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Ashford Insurance

Understanding Your Medicare Annual Notice of Change (ANOC)

Sarah Fuhrmann

Sarah Fuhrmann

Sarah Fuhrmann is an agent of Ashford Insurance an independent health insurance agency specializing in Texas Medicare insurance.

Every September, your Medicare plan sends a letter in the mail called the Annual Notice of Change (ANOC). Your Plan ANOC lets you know how your current Part D drug plan or Medicare Advantage (MA) plan will change for the following year.

Understanding Your Medicare Annual Notice of Change (ANOC)

The Annual Notice of Change (ANOC) is arguably the most important mailing you’ll receive from your Medicare plan each year, and you should definitely read it.

Medicare drug plans and MA plans can make changes to your coverage, including raising the premium, increasing your deductible or copays, adjusting what drugs are in your formulary, and more.

The fact is that almost every plan makes some changes for the new year, so the costs and benefits in place on December 31 may well be dramatically different on January 1. Here are changes that may or may not occur:

  • The plan may not be there next year. Plans sometimes withdraw from certain service areas or don’t renew their contracts with Medicare. Some occasionally go out of business or are terminated by Medicare.
  • The insurance company that sponsors the plan may not offer this particular plan next year.
  • The plan may alter its benefit design next year. For example, it may cease or start offering extra coverage in the doughnut hole.
  • The plan may change its charges for premiums, deductibles, and co-pays or switch drugs to different tiers so the co-pays change.
  • The plan may alter its formulary(the list of drugs it covers) by dropping some drugs or adding others.
  • The plan may change the restrictions it places on some drugs (prior authorizations, quantity limits, or step therapy) by lifting them from some meds and imposing them on others.

How do you know whether any of these changes will affect you? In the case of the first possibility — that your plan won’t exist next year — the plan (or maybe Medicare) will notify you in good time. In that case, you have to enroll in another plan to continue coverage. For other changes, the plan must send you details in an ANOC.

Even if you liked your Medicare plan this year doesn’t mean you’ll like it next year.

Here’s what you need to know about reading your ANOC, what you can do about plan changes, and how to ensure you have great Medicare coverage for the following year.

The ANOC letter, or your Annual Notice of Change, is a letter your Medicare plan will send each September. The ANOC explains any changes in coverage, costs, or network that will take effect on January 1st of the following year.

The ANOC letter is only for Medicare Part D drug plans and Medicare Advantage plans.

Note: Medicare Supplements, also called Medigap plans, are not included in the ANOC because the government standardizes the included benefits, which means Medigap benefits don’t change each year.

Important ANOC Timing

The plan must ensure that you get your ANOC no later than September 30 so that you can compare its cost and benefit details for next year with those of other plans. These details are posted on Medicare’s plan finder website from October 1 onward, in preparation for the open enrollment period. If you haven’t received your ANOC by the first week of October, call your plan and ask for it.

You are allowed to make changes to your Part D plan or Medicare Advantage plan during the fall enrollment period, which lasts from October 15-December 7. Those changes go into effect on January 1st of the following year.

ANOC Timing

Understanding this timing is critical because here’s what often happens – we get a call from a frustrated individual in January. They explain that their medication used to cost $4 at the pharmacy, and now it costs $25!  At that point, it’s too late to make any plan changes.

You cannot switch Medicare Part D drug plans until the fall enrollment period (October 15-December 7).  

In summary, pay attention to your ANOC and make sure you understand how your plan will be changing next year. If you don’t like the changes, it’s time to switch plans, and you need to do it between October 15th and December 7th.  

What Should I Do with My ANOC Letter?

Sometime in September, you’ll receive your ANOC. It may come on recycled paper and look like junk mail, but do not throw it away or discard it!  

It will come from your Medicare plan. For example, if your Part D drug coverage is from UnitedHealthcare®, it will come from UnitedHealthcare®. If your Medicare Advantage plan is with another carrier, it will come from that carrier.

Read through your ANOC and ensure you understand all the changes. If you don’t, call us immediately – we can help you understand how your plan will be changing for the following year.

ANOC Example

Example of what you might see on your Annual Notice of Changes (ANOC) letter, which arrives sometime in September from your Part D or Medicare Advantage plan (if you have one).

Here is another breakdown of potential changes you could experience:

  • Premium increase
  • Deductible increase
  • Copay increase
  • Coinsurance increase
  • Network changes – your pharmacy or doctor is no longer in your network or is no longer a preferred provider
  • Formulary changes – your medications are no longer covered or are in a different tier than before, meaning they’ll cost more at the pharmacy
  • Changes to prior authorizations – you now must get special approval to fill certain medications
  • Changes to referrals and managed care – you now need referrals from your primary care physician (PCP) to see specialists, or your plan may ask you to try cheaper treatment plans first, even if your doctor doesn’t recommend them

It’s common for drug plans to be dropped or revised, which can lead to automatic enrollment in a different drug plan from the same company. Last year, this happened to many clients, and they were moved from a $20 premium plan to a $55 premium plan.

It’s also common for a drug formulary to change, meaning a drug that costs you $5 this year could cost you $25 next year.

It’s critical to read through your ANOC and have a firm understanding of how you will be affected by your plan’s changes.  

Even if you liked your plan this year, it doesn’t mean you’ll like it next year!

What Should I Do After Reading My ANOC Letter?

After reading through your ANOC and seeing how your plan will change for the following year, it’s always a good idea to run a new plan comparison. You can start running comparisons for next year’s plans on October 1st, and you can actually enroll in a new plan beginning October 15th.

Even if your plan isn’t changing, or you’re OK with the changes, you should shop the market and ensure you still have the best plan for you.

You can shop the market on Medicare.gov. However, next year’s plans won’t be visible until October 1st, and you can’t begin any enrollments until October 15th.

New carriers and plans are released every year, and competition is a good thing! There may be a plan in your area with a lower premium or richer benefits, and you should take full advantage of that.

You can run a Medicare Part D or Medicare Advantage comparison on Medicare.gov by yourself, or you can reach out to us here at Ashford Insurance for help.

We run plan comparisons daily and can help you understand many essential details that will affect your out-of-pocket costs next year.

What to do now

  1. Ask: Which changes apply to you

Check the changes to our benefits and costs to see if they affect you.

  • It’s important to review your coverage now to make sure it will meet your needs next year.
  • Do the changes affect the services you use?
  • Look for information about benefit and cost changes for our plan.

Check the changes in the booklet to our prescription drug coverage to see if they affect you.

  • Will your drugs be covered?
  • Are your drugs in a different tier, with different cost-sharing?
  • Do any of your drugs have new restrictions, such as needing approval from us before you fill your prescription?
  • Can you keep using the same pharmacies? Are there changes to the cost of using this pharmacy?
  • Review the 2022 Drug List and look for information about changes to our drug coverage.

Your drug costs may have risen since last year. Talk to your doctor about lower-cost alternatives that may be available for you; this may save you in annual out-of-pocket costs throughout the year. To get additional information on drug prices visit go.medicare.gov/drugprices, and click the “dashboards” link in the middle of the second Note toward the bottom of the page. These dashboards highlight which manufacturers have been increasing their prices and also show other year-to-year drug price information. Keep in mind that your plan benefits will determine exactly how much your own drug costs may change.

Check to see if your doctors and other providers will be in our network next year.

  • Are your doctors, including specialists you see regularly, in our network?
  • What about the hospitals or other providers you use?
  • Look for information about our Provider Directory.

Think about your overall health care costs.

  • How much will you spend out-of-pocket for the services and prescription drugs you use regularly?
  • How much will you spend on your premium and deductibles?
  • How do your total plan costs compare to other Medicare coverage options?

Think about whether you are happy with our plan.

  1. Compare: Learn about other plan choices

Check coverage and costs of plans in your area.

  • Use the personalized search feature on the Medicare Plan Finder at the medicare.gov website.
  • Review the list in the back of your Medicare & You 2022 handbook.
  • Look to learn more about your choices.

Once you narrow your choice to a preferred plan, confirm your costs and coverage on the plan’s website.

  1. Choose: Decide whether you want to change your plan
  • If you don’t join another plan by December 7, 2021, you will be enrolled in your current plan.
  • To change to a different plan that may better meet your needs, you can switch plans between October 15 and December 7.
  1. Enroll: To change plans, join a plan between October 15 and December 7, 2021
  • If you don’t join another plan by December 7, 2021, you will be in your current plan.
  • If you join another plan by December 7, 2021, your new coverage will start on January 1, 2022. You will be automatically disenrolled from your current plan.

Conclusion

Medicare plans change, and you should ensure you’re always in the most competitive plan for your needs and budget. Our licensed agents at Ashford Insurance can make it simple by showing you a free plan comparison.

Ensure you’re happy with your Medicare plan for next year by giving us a call at 817-952-3153. You can change your drug plan or Medicare Advantage plan from October 15-December 7, so don’t delay!

 

 

Header Photo by Anna Shvets from Pexels

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Sarah Fuhrmann

Sarah Fuhrmann

Sarah Fuhrmann has been helping Medicare eligibles in Texas with their Medicare Insurance since 2018.