Each year, millions of Americans enroll in Medicare plans. In fact, according to CMS, there were over 61 million people enrolled in Medicare in 2019 alone. While much of this enrollment activity happens during the general Annual Enrollment Period (AEP) in the fall, for thousands of patients, enrolling in a new plan happens when they first become eligible for Medicare.
By some estimates, 10,000 people become eligible for Medicare daily. This means they enter an enrollment window outside of the AEP during which they can choose a plan that works for them. For many, understanding the intricacies of Medicare and plan selection can be a challenge. According to a 2020 GoHealth survey, 57% of Americans nearing Medicare eligibility said they were overwhelmed by the idea of finding the right plan and 47% noted they don’t know where to start.
Pharmacists, as the most accessible healthcare providers, have an opportunity to provide guidance to these newly eligible patients by comparing plans and helping them make sense of what’s required. The pharmacy also benefits by tapping into opportunities to reduce DIR fees, provide high quality care, and increase patient loyalty all year round. As you focus on patients becoming eligible for Medicare, here are a few things they should be aware of before enrolling in any plans.
1. Enrollment Periods
Like most insurances, Medicare has a limited number of opportunities for each individual to enroll or switch plan coverage throughout the entire year.
- Initial Enrollment Period (IEP): For a newly eligible Medicare beneficiary, the IEP is a crucial seven-month window during which they can enroll in a Medicare plan for the first time. This period begins three months before the patient turns 65 and continues through three months after. When a patient enrolls in a plan during their IEP, their coverage begins the first day of their birth month or the month after they sign up if their birthday has passed.
- Annual Enrollment Period (AEP): Sometimes referred to as Medicare Open Enrollment, the AEP is a seven-week period for Medicare beneficiaries to either enroll in a new plan or switch their current coverage. The AEP occurs annually from October 15 to December 7. If a patient misses their IEP, this is often the only other opportunity for them to make changes to their coverage during the calendar year.
- Special Enrollment Periods (SEP): In some cases, patients may qualify for a special enrollment period outside of the AEP that allows them to make changes to their plans. Losing coverage, contract changes, or a change to their living situation are all special circumstances that would qualify for an SEP. Some other special situations include being dually eligible for Medicare and Medicaid, qualifying for Extra Help paying for prescription drug coverage through Social Security or a State Pharmaceutical Assistance Program (SPAP), or enrolling (or disenrolling) from a chronic care Special Needs Plan. In addition, if a patient isn’t on a plan with a five-star CMS rating, they have a one-time opportunity to enroll in a five-star plan in their service area between December 8 and November 30.
- Medicare Advantage Open Enrollment Period: Between January 1 and March 31 of each year, anyone enrolled in a Medicare Advantage Prescription Drug Plan (MAPD) can switch to a different MAPD or to a Part D plan with Original Medicare.
2. Parts of Medicare
For a patient new to Medicare, knowing what the different parts of Medicare are and what they cover is essential. Beneficiaries can enroll in either Original Medicare with Part D and the option to add a Medigap supplement or Medicare Advantage with Parts A, B, and D all covered under one plan.
- Parts A and B: Also known as Original Medicare, parts A and B typically include hospital and outpatient medical coverage, respectively. Part A covers hospital charges and most of the services received in a hospital, including inpatient hospital stays, care in a skilled nursing facility, hospice care, or home healthcare services. Part B, on the other hand, covers medically necessary primary care and specialist office visits and emergency medical services. It also covers certain medical supplies and preventive services such as flu shots.
- Part C: Also known as Medicare Advantage, Part C provides the benefits of Parts A and B, except hospice care. In most cases, Medicare Advantage plans also provide prescription drug coverage. Some plans include additional benefits such as dental or vision coverage, making them popular among patients. Many Part C plans also have limited doctor and hospital networks, which is an important consideration as patients choose their plans.
- Part D: Prescription Drug Plans, or Part D, cover medications prescribed by doctors. When a patient enrolls in Original Medicare, a standalone Part D plan (PDP) is usually necessary to cover the cost of prescription drugs. Part D coverage can also be part of a Medicare Advantage plan.
- Medicare Supplemental Plans: As their name implies, Medicare Supplement Insurance Plans (Medigap) provide additional coverage for a patient’s out-of-pocket costs that aren’t covered by Original Medicare. These types of plans are especially helpful for patients with chronic health conditions who may be hospitalized, see many doctors, or have frequent medical needs. That said, Medigap plans don’t cover everything: long-term care, vision or dental care, hearing aids, glasses, and private duty nursing aren’t covered by these plans.
3. Coverage Type
People who are already receiving Social Security benefits are automatically enrolled in Medicare when they turn 65. However, in some instances, patients who become eligible for Medicare may still be covered by an employer’s insurance plan. If this is the case, asking the following questions can help them make some important decisions about their coverage:
- How many employees does their current employer have? If a patient’s employer has fewer than 20 employees, Medicare coverage is considered primary and they should enroll in Parts A and B. If their employer has more than 20 employees, in most cases, Medicare coverage is considered secondary and they have the option to enroll in Parts A and/or B to coordinate coverage. They can also choose to drop the employer coverage and enroll in Medicare instead — it is a good idea for patients to check with their employer’s HR department before enrolling in any Part D or Medicare Advantage plans.
- Do they have creditable coverage? Both Medicare Parts B and D have monthly premiums so patients with creditable coverage through a current employer may prefer to defer enrolling in these plans until they are fully retired — this change in employment status would qualify for a Special Enrollment Period.
- Are they on a retiree plan? If a patient has Tricare or retiree coverage, Medicare is considered primary and they should enroll in Parts A and B. When it comes to enrolling in a Part D plan, different plans have different rules so it’s essential for the patient to check with their benefits administrator.
- Do they contribute to an HSA? If the patient has an employer plan with a deductible and wishes to continue contributing to HSA, they should not enroll in any part of Medicare to avoid a tax penalty. It is illegal to enroll in Medicare and contribute to an HSA.
For more information on employer coverage and Medicare, check out this CMS fact sheet.
4. Part D Penalty
A patient can choose to defer Part D enrollment during the IEP if they have creditable coverage for prescription drugs. This can look like a Medicare Advantage plan with prescription drug coverage or coverage through an employer or union. That said, patients who do not enroll and do not have any creditable coverage for a continuous period of 63 days or more after the IEP will be subject to a late enrollment penalty. (Dual eligible patients or those who receive Extra Help from Social Security are exempt from the penalty).
To calculate the late enrollment penalty, multiply 1% of the national base beneficiary premium by the number of full, uncovered months during which the patient didn’t have coverage. Round to the nearest $0.10. (You can also use our Part D calculator here to save time). This amount is then added to the monthly Part D premium indefinitely when they do enroll.
Helping patients make sense of their Medicare options is beneficial for both the patient and the pharmacy, and having the right tools can help. Our plan comparison platform can help you easily identify patients who are newly eligible for Medicare so you can proactively reach out to let them know you’re there to help. You can also help them compare Part D and Medicare Advantage plans in-network with your pharmacy so you can be sure they are considering all their options. To learn more about how Amplicare can help, reach out to us today.
