CDIS Blog
While you are not required to join Medicare Part B, signing up at the wrong time may end up costing you money. If you don’t join when you are first eligible, you may have to pay a late enrollment penalty, which is added to your monthly premium for as long as you have Part B coverage. For each full 12-month period that you go without Part B coverage, your premium may go up 10 percent. Understanding how the penalty works is important, and the key to avoiding paying more for benefits.
How Does the Penalty Work?
When you first become eligible for Medicare, you are automatically enrolled in Medicare Part A (hospital coverage) and Part B (Medical insurance). If you choose to opt out of coverage for Part B, you can. However, the clock starts ticking on penalties for late enrollment the month after your 7-month Initial Enrollment Period (IEP) ends. In other words, if your birthday is in June, then your IEP extends from March through September. Your deadline to enroll in Part B expires at the end of September.
However, even if your IEP expires, you will not be charged a penalty until a full 12 months have passed after your IEP ends. For example, let’s say your IEP expired at the end of March and you did not sign up for Part B. If you decide to join during General Enrollment the following January, you will not be charged a penalty as only 10 months passed after your IEP ended, not the full 12 required for the penalty. But, once your IEP ends, you can only join Part B during General Enrollment, January 1-March 31 each year. Your coverage will start on July 1st.
Joining after Initial Enrollment Ends
If you miss your first chance to join Part B (during your Initial Enrollment Period) but would still like to join, you must enroll during General Enrollment (January 1 through March 31). Remember, the Part B penalty doesn’t affect you until a full 12 months have passed after your IEP ends. That means you can miss your IEP, and still sign up without penalty during the General Enrollment. While you will not be charged a penalty until a full 12 months has passed, missing each March 31 deadline means another full 12 months and another 10 percent late penalty. For example, if you go without Part B coverage for 3 years (without having other acceptable coverage) and decide to sign up, you may incur a 30 percent penalty—10 percent for each full 12 months you could have had coverage but didn’t sign up.
Delay Signing Up Without Paying a Penalty
Not everyone decides to enroll in Part B coverage when they are first eligible. There are cases when it is okay to wait until after you turn 65. If you are still working, and covered through an employer’s group health insurance or your spouse is still working and you are covered under their employer’s group health insurance, you can wait.
The good news is when you retire (or your spouse retires) you will have a full 8 months to sign up for Part B without paying a penalty. However, if you do not sign up during this Special Enrollment Period (SEP), then the penalty clock begins from the original date you lost coverage, not the date your SEP ended. Understanding the Medicare Part B penalty can be complicated. Unless you have other coverage through an employer or a spouse, the easiest way to avoid penalties is to sign up for coverage when you are first eligible, during your Initial Enrollment period. If you miss your first opportunity to join, you may have to wait until the General Enrollment period to enroll.
References:
https://www.medicare.gov/your-medicare-costs/part-b-costs/penalty/part-b-late-enrollment-penalty.htm
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CDIS Blog
If you’ve heard a few commercials on television and you’re wondering whether or not you need to review your Medicare Advantage plan for changes, you’re not alone. Many seniors don’t realize that Part C benefits may change from year to year or that they have the opportunity to review changes before the annual Open Enrollment begins. Securing the right coverage to fit your needs and budget is important. Here is some information on what to expect and how to navigate annual changes in Medicare Advantage benefits.
What Kinds of Changes Can You Expect?
As a member of Medicare Advantage, each fall, you should receive a Plan Annual Notice of Change (ANOC). This document includes important information about any changes to your plan that will take effect the following January. This is your opportunity to review your plan to decide if it will still meet your needs the following year. Expect to see changes to your monthly premium, deductibles, prescription drug coverage and cost, provider networks, and copayments. Your maximum out-of-pocket limit may be reduced, your drug plan’s formulary or list of covered medications may increase or decrease or your current plan may be merged into another Medicare Advantage plan.
How to Review Changes to Your Medicare Advantage Plan
Changes to your current plan may not affect you or your benefits at all. However, even small changes can have a significant impact on how you receive your benefits, how much you pay out-of-pocket, and even where you can go to receive services. For instance, your plan’s drug formulary may cover fewer medications next year. If you take a specific drug, it’s a good idea to review your notice of change carefully to ensure the medications you rely on are still available. Are they in a different tier? Can you still use the same pharmacy? Look for changes in how much you will need to pay to continue receiving the prescriptions you use regularly. It’s also important to review changes that may affect where you go to receive services. Is your doctor still in the network? How about the hospital you use?
There’s Plenty of Time to Review Your Plan’s Coverage
The good news is, that Medicare plans must send an Annual Notice of Change no later than September 30—a couple of weeks before the start of Open Enrollment. If you don’t receive it, contact your plan. Details on how to request the notice can be found on the back of your membership card. If you decide to keep your Medicare Advantage plan, you don’t need to do anything at all and you will automatically be re-enrolled in your current plan for another year.
References:
Annual Notice of Change: https://www.medicare.gov/forms-help-and-resources/mail-about-medicare/plan-annual-notice-of-change.html
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CDIS Blog
Medicare prescription drug coverage ensures you get the medications you need to stay healthy and strong. But whether you receive benefits through a standalone Part D plan or Medicare Advantage, understanding drug coverage can be complicated. With formularies and tiers, there’s much to know. To help you make sense of prescription drug coverage, here’s a quick summary of a formulary and how it works.
Formularies and Tiers
Each Medicare prescription drug plan has its own formulary or list of medications that are covered. The formulary organizes both generic and brand-name drugs into different classes or tiers that are grouped by cost. Generally, drugs in lower tiers cost less than those in higher tiers. For example, a brand-name drug to treat high blood pressure may be in Tier 3, while the generic version of the same drug might be available in Tier 1. Most prescription drug plans offer 4 tiers, and some offer 5:
Tier 1: Most generic prescription drugs, lowest copayment
Tier 2: Preferred, brand-name prescription drugs, medium copayment
Tier 3: Non-preferred brand-name prescription drugs, higher copayment
Tier 4: Specialty, unique, costly prescription drugs, highest copayment
Formularies change from year to year and you must review your Medicare Annual Notice of Change (ANOC) to make sure any medications you take are still covered. However, if your plan makes changes that impact you, they are required to let you know 60 days before the change takes effect.
Saving Money Using Formularies
Medicare drug plans negotiate pricing with drug companies, securing lower prices for medications than you could get yourself. Because of this, using drugs listed in your plan’s formulary may cost you less than using drugs outside of the formulary. Also, choose the generic version of drugs whenever possible to save even more.
Generic drugs are essentially copies of brand-name drugs. How they are administered, dosage, safety, and strength are the same with both. Generic drugs use the same active ingredients as brand-name drugs and are used safely as a reliable alternative to more costly versions. The majority of prescriptions filled today use generic drugs.
When Your Drug Is Not on the Formulary
In the event a drug you need is not covered by your plan’s formulary, you may be able to get a formulary exception—a type of Medicare prescription drug coverage determination where your plan decides to cover a drug that’s not on the list. There are exceptions to tiers and formularies, but each requires a request from you or your provider as well as a supporting statement from your doctor explaining the medical reason behind the exception.
References:
Costs associated with using formularies: https://www.medicare.gov/Pubs/pdf/11136-Pharmacies-Formularies-Coverage-Rules.pdf page 2, 3
Formulary and tiers: https://www.medicare.gov/part-d/coverage/part-d-coverage.html
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CDIS Blog
If you’re getting close to 65 and starting to plan your healthcare strategy, a Medicare Advantage Plan may be the right choice. With benefits extending beyond Original Medicare, often including coverage for vision, dental, and even prescription drugs, an MA plan makes sense. Are you eligible? If you’d like to find out if you qualify, here is some information that can help.
What You Need to Join a Medicare Advantage Plan
There are only two ways to get Medicare coverage: Original Medicare (Part A and Part B) or Medicare Advantage (Part C). In most cases, you can join a Medicare Advantage plan if you meet a few eligibility requirements.
You must live in the service area of your plan
First, you must live in an area that is serviced by the plan you choose. It’s easy to find out which plans serve your local community. Medicare plan finders generally only ask you to enter a few details about your needs and location. If you live in a different state for part of the year, be sure to check to make sure the plan you’re considering covers you there as well.
You must have Medicare Part A and Part B coverage
Sometimes seniors wonder if they can purchase a Medicare Advantage plan if they’re currently only covered by Medicare Part A. The answer is no. You must have both Part A and Part B coverage to be eligible to buy a plan. Luckily, once you turn 65, you are automatically enrolled in Original Medicare. However, if you choose to opt out of Part B, you will NOT be eligible to join.
You do not have end-stage renal disease
Seniors with permanent kidney failure who require regular dialysis treatment or a kidney transplant are not eligible to join a Medicare Advantage plan.
References:
https://www.medicare.gov/sign-up-change-plans/medicare-health-plans/medicare-advantage-plans/who-can-join-medicare-advantage-plan.html
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CDIS Blog
Qualifying for Medicare coverage outside the traditional Open Enrollment Period involves using a Special Enrollment Period. Certain life events, such as moving, losing your plan, etc. may allow you to join, switch, or drop a Medicare plan. If you’d like to learn more about whether or not you qualify for Medicare Special Enrollment here’s some information that can help.
Qualifying Events
Under certain “special” conditions, you may be able to sign up for Medicare coverage outside of regular enrollment periods. Special qualifying events allow people to enroll in coverage even after the traditional Open Enrollment Period has ended. The following life events may qualify you for Special Enrollment Periods:
Loss of health care coverage
Changes in household size
Changes in residence
Becoming a U.S. citizen
Getting out of jail
Loss of health care coverage If you lose your health care coverage, either voluntarily or involuntarily, you may qualify for a Special Enrollment period. If you lose coverage provided through work or a family member, expect to in the next 60 days, or have the opportunity to enroll in private coverage offered through an employer, you may qualify. Additionally, if you are no longer eligible for Medicaid, you may qualify for a Special Enrollment Period.
Changes in household size Certain events like marriage, having a baby, going through a divorce, or death change household size, which may qualify you for Special Enrollment periods.
Changes in residence If you move to a new address that isn’t in your current plan’s service area or you have new options available to you in a new area, you may qualify for a Special Enrollment Period. In addition, if you are moving in or out of a skilled nursing facility or long-term care facility, you may qualify.
In addition to the above, becoming a U.S. citizen or getting out of jail may serve as a qualifying event for special enrollment. Of course, if Medicare terminates your plan’s contract or your contract isn’t renewed, you may qualify for a Special Enrollment Period.
5-Star Special Enrollment Period
Medicare rates individual plans for quality and performance using a star system from 1 to 5, with 5 considered “excellent”. Using customer satisfaction surveys and information from health care providers, updates are made annually giving customers reliable information about any plans they are considering.
You may switch to a 5-star Medicare Advantage plan, Medicare Cost plan, or Medicare Prescription Drug plan during the 5-Star Special Enrollment Period if a 5-star plan is available in your area. However, you may only use this Special Enrollment Period once from December 8 – November 30.
References:
https://www.medicare.gov/sign-up-change-plans/when-can-i-join-a-health-or-drug-plan/special-circumstances/join-plan-special-circumstances.html
https://www.medicare.gov/sign-up-change-plans/when-can-i-join-a-health-or-drug-plan/five-star-enrollment/5-star-enrollment-period.html
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