PRINTER FRIENDLY
 

According to the Centers for Medicare & Medicaid Services (CMS), approximately seven percent of beneficiaries enrolled in Medicare Advantage plans (amounting to 1.5% of all Medicare beneficiaries) will need to choose a new health plan or rejoin original Medicare in 2010 because their current private Medicare plan has not renewed its contract with CMS.  CMS has stated that many of the affected beneficiaries are enrolled in private fee-for-service plans (PFFS) that previously announced their business decisions not to continue offering a Medicare product.[1]

Beneficiaries who are enrolled in a Medicare Advantage (MA) plan that includes prescription drug coverage (MA-PD) and who return to original Medicare must choose a stand-alone Medicare prescription drug plan (PDP) if they want Medicare drug coverage starting in January 2010. 

Medicare Advantage issues and RESPONSIBILITIES

Notification rights:  CMS is charged with providing Medicare beneficiaries with the information they need to make informed choices about how they receive their Medicare benefits.  This includes general information to remind beneficiaries that a Medicare Advantage plan may choose not to renew its contract with Medicare as well as information about the effect that a contract nonrenewal or service area reduction may have on individuals enrolled in a non-renewing plan.[2]

The obligation to provide direct and specific information about the nonrenewal to plan enrollees falls on the MA organization that sponsors a plan whose contract it does not intend to renew.  The MA organization must provide plan enrollees with a notice, approved by CMS, 90 days before the end of the calendar year.  The notice must include "a written description of alternatives available for obtaining Medicare services within the service area, including alternative MA plans, Medigap options, and original Medicare…"[3]  The MA organization must also provide notice to the general public within the same time frame, generally through publication in a newspaper in the community it will no longer serve.

Because the regulations concerning notice to plan enrollees were developed before enactment of Medicare Part D, they do not specifically require non-renewing plans to include information in their notice to enrollees about prescription drug coverage.  As a result, beneficiaries may not receive sufficient explanation of the need to enroll in a PDP by December 31, 2009, in order to ensure continuous drug coverage.  Most beneficiaries who return to original Medicare and who do not choose a drug plan will find themselves without prescription drug coverage in the New Year.

Continuation of coverage responsibilities: In some circumstances non-renewing MA organizations may have continuing obligations towards the provision of coverage for enrollees in their non-renewing plan.  Non-renewing plans are responsible for Part A hospital costs for beneficiaries who are hospitalized on December 31 (last day of contract year) through the date of discharge.  Part B costs, however, become the responsibility of original Medicare or any new plan in which a beneficiary enrolls.  Plans also do not retain financial liability for beneficiaries who are in a Part A-covered skilled nursing facility (SNF) stay on the last day of their contract.  Original Medicare or a new MA plan chosen by the beneficiary must pay for the continued SNF coverage.  Note that SNF days covered while the beneficiary was in the MA plan count towards the 100 days of a Medicare covered stay. [4]

Pending Appeals: MA organizations are "obligated to process any appeals for services which would have been provided or paid for while Medicare beneficiaries were enrolled in the plan."[5]  This means that, regardless of when the decision at any level of review is reached, those decisions in favor of the Medicare beneficiary for such services are the obligation of the former MA organization.[6]

ENROLLEE RIGHTS TO A SPECIAL ELECTION

Beneficiaries enrolled in plans whose sponsors are not renewing their contract or are reducing their service area remain covered by their existing plan through the end of the current contract year, December 31, 2010.  They can choose a new MA plan during the up-coming Annual Coordinated Election Period (ACEP) which runs from November 15 through December 31.  If they do nothing they will return to original Medicare.  Coverage under the new MA plan or under original Medicare will begin on January 1, 2009.

Enrollees in these plans also are entitled to a Special Election Period (SEP)[7]  that allows them to choose another MA plan, including an MA-PD, or to return to Original Medicare at times other than the ACEP. The SEP began on October 1, 2009 and will end on January 31, 2010.  Enrollees who elect a SEP can choose an effective date of November 1, December, 1, or January 1.  Only those who exercise their SEP rights in January can choose an effective date of February 1. For people who choose a new MA plan, the effective date cannot be earlier than the date that the new plan receives their application.

Medigap rights of enrollees who are losing MA coverage

Medigap insurance works in tandem with original Medicare by filling in the gaps or supplementing original Medicare. The open enrollment period for the standardized Medigap policies (identified as plans A – L) is the six (6) months that begin on the first day of the first month after a beneficiary has both (a) attained age 65 and (b) become entitled to Medicare Part B benefits.[8]

Medigap policies are not designed to work with Medicare Advantage plans; they do not pay for any of the out-of-pocket costs associated with these plans. A beneficiary who is enrolled in a non-renewing MA plan and who is returning to original Medicare has a "guaranteed issue right" to purchase a Medicare policy, however.  Such an enrollee has a 123 day span of time to purchase a Medigap policy.  This time period consists of 60 calendar days before the date the beneficiary's coverage will end and 63 days after the coverage ends.  Beneficiaries who are enrolled in a terminating plan and who choose another MA plan may have the same guaranteed issue rights if they decide to leave the new plan within 12 months.  Beneficiaries who are considering returning to original Medicare and purchasing a Medigap policy are advised to begin reviewing policies as soon as possible to ensure enrollment and coverage by January 1.

Some enrollees in non-renewing plans may have additional guaranteed issue rights that could prove helpful.  There is a separate guaranteed issue right for a Medicare beneficiary who dropped a Medigap policy upon enrolling for the first time in an MA plan within the past 12 months.  These beneficiaries are also guaranteed issuance of the same Medigap policy from the same insurance company that was dropped, assuming the policy is still being offered for sale.  Another SEP is available to individuals who enrolled in an MA plan when they first became eligible for Medicare, and who disenroll within 12 months.  In both situations the SEP is continued for another 12 months if they enroll in another MA plan.  Individuals who are eligible for these SEPS because they enrolled in a non-renewing Medigap plan during the past year may want to consider utilizing these SEPS because of added protections they provide with regard to Part D.

MEDICARE PRESCRIPTION DRUG COVERAGE ISSUES

Beneficiaries who take no action upon learning that the MA plan in which they are enrolled is terminating its contract will continue to have Medicare benefits in 2010. They will automatically be returned to original Medicare.  As stated earlier, most beneficiaries who are in a terminating MA-PD will not have prescription drug coverage unless they affirmatively choose a PDP during the Annual Coordinated Enrollment Period, November 15-December 31. 

The prescription drug plan (PDP) manual does not specifically create a prescription drug plan SEP for individuals who are enrolled in a non-renewing MA plan with prescription drug coverage (MA-PD) and who return to Original Medicare.  It creates a SEP similar to the MA non-renewing SEP for enrollees in PDPs that are not renewing their contract.[9]  It also creates SEPs for people who return to Original Medicare within the first year of their enrollment in an MA plan, either as a new Medicare beneficiary or because they gave up their Medigap policy.[10]  CMS stated on a phone call with advocates that it will allow beneficiaries who discover in January 2010 that they are without drug coverage to enroll in a PDP during January.  Coverage will only be prospective, however, meaning that these beneficiaries will be without drug coverage during the month of January.

Individuals who are eligible for the Part D low-income subsidy (LIS) have somewhat more protection.  Full benefit dual eligible beneficiaries (individuals with both Medicare and full Medicaid) will be automatically enrolled in a PDP if they have not enrolled in another MA-PD or chosen a PDP themselves. Other beneficiaries who are eligible for the low-income subsidy may be subject to facilitated enrollment, where CMS enrolls them in a PDP that is eligible for the subsidy.  All LIS eligible beneficiaries have a SEP that allows them to enroll in a PDP at any time.[11]

CONCLUSION

Despite rules that are intended to protect enrollees in private Medicare plans that are not renewing their contracts for 2010, beneficiaries still bear the burden of ensuring that they have complete health care coverage.  Those who do not choose another MA plan will have original Medicare, Parts A and B, to provide for most of their health care needs.  However, they will not have prescription drug coverage unless they take affirmative action to choose a PDP.  They also may want a Medigap policy to assist with Medicare's cost sharing.  Beneficiaries are advised to contact their State Health Insurance Assistance Program (SHIP) for assistance in making these choices.[12]

For more information, contact attorney Vicki Gottlich (vgottlich @ medicareadvocacy.org) in the Center for Medicare Advocacy's Washington, DC office at (202) 293-5760.