Medicare - Part D Flashcards
Assuming one does not have creditable drug coverage, when must participants enroll in Medicare Part D?
What exception exists for the normal enrollment period.
Within 63 days of enrolling in Part B at age 65 or older.
One can avoid enrolling in Part D as long as they have “creditable” drug coverage through private insurance. This insurance could be either group coverage available through active employment, or retiree coverage provided by a former employer.
How does one know they have “creditable” private drug coverage (for purposes of avoiding late enrollment penalties for Part D)?
How is creditable defined?
Each year in October, health insurance companies must send out a letter to policy holders explaining whether their coverage is creditable. Policy holders can check at any time by calling their insurance company or employer benefits department. Creditable coverage is coverage that is at least as extensive as that offered by Part D.
How is the penalty for late enrollment in Medicare Part D calculated?
Is the penalty permanent?
Example Problem - What the monthly and annual penalty be for a Part D policy costing $30 per month if enrollment was 7 months late?
The monthly penalty is equal to 1% of the monthly premium of the coverage you choose for each month that you were required to be in Part D but were not.
Yes, it’s permanent.
Penalty = $30 x .01 x 7 = $2.10 per month.
Once enrolled, when are you allowed to change your Part D coverage to another plan?
Why would you change Part D plans?
During the annual Open Enrollment Period, which runs from October 15th to December 7th (Pearl Harbor Day) each year.
Part D should be shopped each year because prices and formularies change on a regular basis. By carefully shopping policies, participants can sometimes save money or get broader coverage or both.
A person actively works until age 67, maintaining creditable employer health insurance coverage. Their birthday and retirement date are September 1st. What is the latest they can enroll in Part without incurring permanent penalties?
It depends on when they enroll in Part B, and whether they maintain creditable retiree health insurance from their past employer. The rules state that you have 63 days past the time you enroll in Part B (assuming you are at least 65). If the retiree drops their employer health insurance on their retirement date, and immediately starts Part B, then they would have until November 2nd to enroll in Part D. If the retiree were to delay enrolling in Part B for the full eight month allowable period, and then enrolled in Part B, then they would have 63 days after that to obtain Part D. Note that during the eight month period, the person would hopefully maintain some type of insurance, either retiree coverage or private coverage through COBRA so that they are not uncovered during this time.
When do most people enroll in Medicare Part D?
At age 65, at the same time they enroll in Part’s A and B and Medigap, and/or sign up for Advantage.
How is “creditable coverage” defined by the CMS?
Under §423.56(a) of the final regulation, coverage is creditable if the actuarial value of the coverage equals or exceeds the actuarial value of standard prescription drug coverage under Medicare Part D, as demonstrated through the use of generally accepted actuarial principles and in accordance with CMS actuarial guidelines. In general, the actuarial equivalence test measures whether the expected amount of paid claims under the entity’s prescription drug coverage is at least as much as the expected amount of paid claims under the standard Part D benefit.
T or F
To enroll in Part D, you first be enrolled in Medicare Part B.
True. You then have 63 days to enroll in Part D.
