What is the Difference Between AEP and OEP?

“So…what IS the difference between AEP and OEP?” You might have heard this question circulating among your peers.

The big day has arrived. The cake is made, the presents wrapped and the streamers and balloons are placed just so. You’re finally 65…yay? More like, you’re 65! Yay!

This isn’t the typical response for many people as they reach this milestone age, but it does represent one important, and possibly financially beneficial moment: you are finally eligible for Medicare. But where do you start? How do you figure out what time of year is the best time to enroll in Medicare?

You’ve heard some friends talk about their AEP or their OEP, but honestly, it’s confusing! Keep reading to answer the question, “what’s the difference between AEP and OEP?” once and for all.

What is Medicare anyway?

Medicare is a health insurance plan that’s federally funded, and available for some parts of the population.

Who’s eligible?

Eligibility is not just strictly for those over a certain age. Although this is how most people think of Medicare, there are certain circumstances that make others eligible long before they are of age. Here is a basic breakdown of who can explore Medicare coverage and when:

anyone over age 65
some younger people with certain disabilities
people with permanent kidney failure or ALS

This website is a great resource if you’re looking for answers for more than just the basics. Depending on what different circumstances you are personally living with, you might need to explore the specifics of each option. Not all Medicare coverage is created equal.

Different components

Ok, you now know that if you’re over 65 or living with other specific disabilities or illnesses, Medicare might be the next right choice for you. But how do you go about figuring out which plan is the best plan? Do you stick with Original Medicare? The Medicare Advantage plan?

Below is a quick description of what’s out there because, ultimately, in order to dig into our main question, “What is the difference between AEP and OEP,” we need to have an understanding of what we are enrolling in.

Original Medicare

Includes Part A (Hospital Insurance)
Includes Part B (Medical Insurance)
Has deductibles and coinsurance payments
Does not include Part D (a prescription drug plan)
Does not include a dental or vision plan
You can go to any doctor that accepts Medicare and you plan for services as you receive them

*you can add a supplemental plan to help pay for extras

**Go Here and Here to see more info about Medicare Coverage for Dental and Vision Insurance

Medicare Advantage Plan

Medicare-approved plan offered by a partner insurance company
You must go through a licensed insurance agent to enroll
Usually offers a bundled version of Part A, Part B, and often Part D.
Sometimes offers “extra” coverage like dental and vision
Requires you to see doctors inside of the private insurance company’s network

This is a very quick Birdseye view of the difference between the Original and Advantage route. You might want to seek out more information if you’re not sure what’s right for you.

OK, I’ve been enrolled and need different options–how can I make changes?

Enrollment for any health insurance coverage is tricky at best and can be dismally difficult at worst. There are a lot of rules that sometimes revolve around the time of year or other times can revolve around employers. AEP (Medicare’s Annual Enrollment Period) and OEP (Medicare Advantage Open Enrollment) are two quite different entities with different purposes.

So then what is the difference between AEP and OEP? Let’s take a closer look at these two different types of enrollment and when it’s appropriate or necessary to use each.

Medicare Annual Enrollment Period (AEP)

The Medicare Annual Enrollment Period or the AEP refers to the time of year between October 15th and December 7th when a person who already receives Medicare benefits can make changes to their current coverage. This means you can add or drop specific portions, and add a supplemental plan if you need to bridge a gap or your needs change in any way.

Each year before this time of year rolls around–usually in September– Medicare releases all the changes that will be made to the benefits for the following year. This way you can look around, assess whether your needs have changed, and elect to make changes in the Medicare coverage you currently have.

You will see any benefit adjustments you make during this time come into play in January of the next year. Below are the changes you can make during Medicare’s AEP each year.

You can:

Discontinue an Advantage Plan to go back to Original Medicare
Choose a different Advantage Plan from the one you already have
Jump from Original Medicare to an Advantage plan
Make a change from one prescription plan to another
Cancel your prescription plan if you no longer need it
Get a prescription plan if you didn’t already have one

Something worth mentioning: sometimes the AEP can be known as the Annual Election Period or the fall enrollment period.

Medicare Open Enrollment Plan (OEP)

Not to be confused with the AEP, the Open Enrollment Period or OEP is a little different and can be a bit confusing. When people refer to the OEP, depending on what plan they have they could be talking about one of a few different things.

Like the AEP, the Medicare Advantage Open Enrollment Period is based on a time of year. The OEP refers to one time of year, between January 1 and March 31, where people already enrolled in an Advantage plan can make changes to their Advantage Plan. It’s not however, the only time of year people can enroll in a Medicare Advantage Plan.

Here are some of the things you can do during the OEP:

Change from an already existing Advantage plan to another one
Change enrollment from an Advantage plan back to Original Medicare (with or without prescriptions)

There’s a catch for the OEP that you won’t see during the AEP. During the OEP, you can only make ONE change to your benefits. Worth repeating: you can only change one thing about your Advantage Plan during the OEP, so it’s definitely something you want to think through before acting on.

If you have other things you end up wanting to change, you will have to wait until the AEP comes around again in October to make other changes. The exception is if you can qualify for a Special Enrollment Period. So think carefully about any changes you want to make during this time!