A Medicare plan that worked well this year can look very different on January 1.
That is why the Medicare Annual Notice of Change (ANOC) deserves more than a quick glance before you put it in a drawer. The notice explains important changes to your Medicare Advantage or Medicare Part D plan that will take effect in the coming year.
Those changes could include a higher premium, a different deductible, increased copays, a medication being removed from the plan’s formulary, or a doctor or hospital leaving the network.
Plans generally send their Annual Notice of Change by September 30. That gives you time to review your coverage before Medicare’s Annual Enrollment Period, October 15 through December 7. During this period, you can make changes to Medicare Advantage and Part D coverage, with changes generally taking effect January 1.
What Is the Medicare Annual Notice of Change?
The Medicare Annual Notice of Change, often called the ANOC, is a yearly notice explaining how your Medicare Advantage or Part D plan will change for the following year.
It typically explains changes to:
- Monthly premiums
- Deductibles
- Copayments and coinsurance
- Prescription drug coverage
- Provider and pharmacy networks
- Covered services and benefits
- Service areas
- Prior authorization and other coverage rules
- Annual out-of-pocket costs
The key is to compare the changes with how you actually use healthcare.
If you’re not sure how Medicare Advantage compares with Original Medicare and Medigap, our guide to Medicare Advantage vs. Medigap can help explain the basic differences.
A benefit that sounds impressive in a plan brochure may matter less to you than whether your doctor, hospital and prescriptions remain covered at an affordable cost.
1. Check Whether Your Medicare Costs Are Going Up
Don’t focus only on the monthly premium.
A plan with a low premium can still become more expensive if it raises your deductible, office-visit copays, prescription costs or other out-of-pocket expenses.
Look at the combination of:
Premium + deductible + copays + prescription costs + potential out-of-pocket maximum.
If you regularly see specialists, use expensive medications or receive frequent medical services, even relatively small changes can add up over a year.
You can also use Medicare’s health and drug plan comparison tools to compare available coverage in your area. Medicare plan availability and costs can vary by location.
2. Make Sure Your Doctors and Hospitals Are Still in Network
For Medicare Advantage members, this is one of the most important checks.
Look for changes involving your:
- Primary care physician
- Specialists
- Preferred hospital
- Health system
- Skilled nursing facility
- Other frequently used providers
Don’t assume that a doctor who was in-network this year will remain in-network next year.
Medicare Advantage plans can have network restrictions, and in many plans you may need to use network providers to receive covered services at the plan’s terms.
If keeping a particular doctor or hospital is important, consider confirming participation with both the health plan and the provider’s office.
3. Review Every Prescription You Take
Your prescription drug coverage can change even if your medication itself hasn’t changed.
Check whether each prescription:
- Remains on the plan’s formulary
- Moves to a different drug tier
- Has a higher copayment
- Requires prior authorization
- Has quantity limits
- Requires step therapy
- Has pharmacy restrictions
Medicare calls a plan’s list of covered prescription drugs its formulary, and plans can differ in the drugs they cover and the rules that apply.
Pay particular attention if you take brand-name drugs, specialty medications, insulin or several prescriptions each month.
Also check your pharmacy. Medicare notes that preferred in-network pharmacies may offer lower out-of-pocket costs than other pharmacies in the plan’s network.
4. Look Closely at Dental, Vision and Other Extra Benefits
Medicare Advantage plans often compete by offering additional benefits such as dental, vision, hearing, fitness programs or over-the-counter allowances.
But these benefits can change from year to year.
Don’t simply ask:
“Does my plan still offer dental coverage?”
Ask:
“How much does it cover, what services are included, and what will I have to pay?”
This is particularly important because Original Medicare generally doesn’t cover many routine dental and vision services, while Medicare Advantage plans may offer additional benefits.
If you’re specifically wondering does Medicare cover dental care, review both Original Medicare’s rules and the specific benefits offered by your Medicare Advantage plan.
5. Watch for Changes to Prior Authorization and Referrals
Prior authorization can determine whether certain medical services, tests, procedures, therapies or equipment are covered.
Your ANOC may identify changes to these requirements.
This can be especially important if you regularly receive specialized or ongoing care.
A plan can appear affordable while becoming more restrictive in how certain services are accessed.
6. Compare Your Plan With Other Medicare Options
An ANOC does not automatically mean you should switch plans.
If your doctors, medications, healthcare needs and costs still fit the plan, staying where you are may make sense.
But the ANOC should prompt you to compare, rather than automatically renew.
During Medicare’s Annual Enrollment Period, October 15 through December 7, eligible beneficiaries can review and make changes to Medicare Advantage and Part D coverage. Changes made during this period generally take effect January 1.
When comparing plans, use your actual ZIP code, medications, preferred pharmacies and doctors. Plans are location-specific, so a plan that looks attractive in one area may not be available—or may not be the best value—in another.
7. Don’t Wait Until December 7
The biggest mistake is treating the ANOC as routine paperwork and waiting until the final days of enrollment.
Give yourself time to:
- Read the ANOC.
- Highlight changes that affect you.
- Check your doctors and hospitals.
- Review every prescription.
- Compare your expected costs.
- Investigate alternative plans if necessary.
- Make your decision before the enrollment deadline.
Starting in September gives you much more time to resolve questions.
What If Your Medicare Advantage Plan Is Changing?
If your Medicare Advantage plan is being discontinued or your plan is making significant changes, don’t ignore the notice.
You may have options to choose another Medicare Advantage plan or return to Original Medicare, depending on your circumstances and applicable enrollment rules.
Medicare also has Special Enrollment Periods for certain situations, including some significant changes involving your plan or circumstances.
If you are considering a change, compare the total cost and coverage, not just the monthly premium.
That means looking at doctors, hospitals, prescription drugs, pharmacies, deductibles, copays and maximum out-of-pocket exposure.
What About Original Medicare and Medigap?
If you have Original Medicare with a standalone Part D prescription drug plan, you should receive an Annual Notice of Change from your Part D plan.
Medicare Part D covers many outpatient prescription drugs, and Medicare recommends checking your plan’s drug list, or formulary, to see which medications are covered.
Medigap works differently. Medigap policies are standardized by plan type, so their covered benefits generally don’t change from year to year in the same way Medicare Advantage benefits can. However, premiums can change.
If you’re trying to understand the difference between the two approaches, read our guide to Medicare Advantage vs. Medigap.
The Bottom Line
Your Medicare Annual Notice of Change is more than an informational letter. It is an early warning about how your healthcare coverage could change next year.
Before renewing your plan, ask four simple questions:
Are my doctors still covered?
Are my medications still covered at a reasonable cost?
Will my healthcare costs increase?
Are the benefits still worth what I’m paying?
If the answers are yes, staying with your current plan may be perfectly reasonable.
If not, Medicare’s Open Enrollment period gives you an opportunity to look at other options before the new plan year begins.
Don’t just renew the plan you have. Renew it because you’ve checked that it still works for you.
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