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Enrollment
| What differences exist for beneficiaries if enrolling in a Medicare Advantage (MA) plan versus staying in Original Medicare? |
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Medicare has a fairly comprehensive set of covered benefits. It also offers a number of service delivery options. Beneficiaries have the option to receive services through the Original Medicare program (Medicare Parts A and B, also called “Traditional Medicare”) or through a variety of privately sponsored Medicare Advantage (MA) plans. Regardless of the choice they make between these options, beneficiaries have coverage for the Part A benefits that include inpatient hospital, skilled nursing facility, home health, and hospice care services. They also have coverage for Medicare Part B’s benefits that include physician, outpatient hospital, home health, ambulance, and preventive services, along with medical equipment, supplies, and many other services and items. The Medicare Advantage program (formerly called Medicare + Choice) is another name for Medicare Part C. Congress enacted Part C in 1998 and through it set up several different systems for delivering Medicare-covered benefits and services through private contractors. These contractors, called “health plan sponsors” or “Medicare Advantage Organizations” (MAOs), offer Health Maintenance Organizations (HMOs), Preferred Provider Organizations (PPOs), Private-Fee-for-Service (PFFS) plans, and other plan types, to Medicare beneficiaries. These private plans must cover the same services and benefits that are available through the Original Medicare program. For a guide on understanding the various MA plans, read HAP’s Making Informed Decisions booklet.
| If a beneficiary enrolls in a Medicare Advantage (MA) plan without drug coverage (MA-only), is that beneficiary automatically disenrolled from his stand-alone PDP plan? |
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Generally, beneficiaries are not permitted to be enrolled in an MA-only plan as well as a stand-alone PDP plan. Two types of MA plans are exempt from this rule: Private Fee-for-Service (PFFS) plans and Medicare Medical Savings Account (MSA) plans. Thus, if a beneficiary opts for a PFFS MA-only or an MSA plan during an appropriate enrollment period (SEPs included), the individual will remain enrolled in his stand-alone PDP. However, for beneficiaries who opt for another type of MA plan (e.g., HMO, PPO, SNP) during an appropriate enrollment period (SEPs included), enrollment into MA-only plans will automatically disenroll them from their stand-alone PDP plans.
| How do Private Fee-for-Service (PFFS) plans deliver benefits to Medicare beneficiaries? |
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Like Original Medicare, PFFS plans pay providers on a fee-for-service basis. This means that enrollees go to a doctor or hospital to receive services, the provider submits a claim to the PFFS plan, and the plan pays for the care. The plan pays the provider at a rate set by the plan. Like Original Medicare, PFFS members can access any provider who is willing to accept the plan's payments. Like other Medicare Advantage (MA) plans, PFFS plans must cover all Part A and Part B services, and may set their own deductible and coinsurance charges. Like other MA plans, they may offer covered services in addition to those in Original Medicare. However, PFFS plans are not managed care plans like HMOs. For the most part, they do not maintain provider networks. Note, however, that beginning in 2011 the Medicare Improvement for Patients and Provider Act (MIPPA) of 2008 requires certain PFFS plans to have provider networks. Read HAP’s May 2009 eNewsletter for more information on this upcoming change. For more information on PFFS plans, visit the Types of Plans section of HAP’s Medicare Advantage SHIP Resource Guide.
| If a beneficiary declined Part B coverage (for whatever reason) and later chooses to enroll in Part B during the General Enrollment Period, what are his Medicare Advantage (MA) enrollment options? |
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The Part B General Enrollment Period is from January 1 to March 31 of each year. This GEP has a coordinating SEP that allows a beneficiary to enroll in Part D between April 1 and June 30 with coverage effective July 1. Since someone who declined Part B coverage was not then eligible to enroll in a Medicare Advantage (MA) plan, this SEP coincides with the beneficiary's Initial Coverage Election Period (ICEP) or the period when a newly MA-eligible beneficiary may enroll in an MA plan. Because this SEP and ICEP coincide, a beneficiary is permitted to enroll in an MA-PD plan from April 1 to June 30 with coverage effective on July 1. Read Chapter 2, section 30.2 of Medicare Advantage Enrollment and Disenrollment found in CMS’s Medicare Managed Care Manual for more information that addresses enrollment options for those newly eligible for MA.
| What is the definition of a service area? Would beneficiaries have a SEP if they moved between counties in the same state? |
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The definition of a “service area” is different for MA and Part D plans. Section 40 of Chapter 5 of the Prescription Drug Plan (PDP) Manual defines the term as, “Prescription drug plan regions are areas in which a contracting PDP sponsor must provide access to covered Part D drugs. The service area for a PDP […] consists of one or more PDP regions. A PDP sponsor may offer a PDP in more than one region – including in all PDP regions – so long as coverage is provided in all those regions in their entirety.” Section 60.1 of Chapter 4 of the Medicare Managed Care Manual defines it as, "A service area is a geographical area approved by CMS within which an MA eligible individual may enroll in a particular MA plan offered by an MA organization. A local MA plan’s service area does not need to be contiguous. A regional PPO’s service area must be the entire MA region." Based on these definitions it is much more likely that MA plans will vary from county to county than such a variation among Part D plans (since those plans must be uniform throughout an entire PDP Region). For a beneficiary who moves from one county to another within a state, it is possible that the MA plans in one county have different plan numbers than the MA plans in another county. Even if a plan has the same name, it might have two different plan numbers, making it, in effect, two separate plans. SHIPs can use Medicare’s Health Options Compare Web site to look at plan numbers for the two counties and to check the plan ID numbers. In the PDP Enrollment Guidance, beneficiaries who have new MA or Part D plan options as a result of a move will have a SEP to change plans. Section 20.3.1 of CMS’s PDP Enrollment Guidance outlines the four opportunities for Special Enrollment Periods (SEPs) associated with a move. The first of these is for beneficiaries who move out of the service area of their plan. The second and third pertain to beneficiaries who were living out of the country and those who were incarcerated. The fourth, however, gives a SEP to, "individuals who will have new Medicare health or Part D plans available to them as result of a permanent move." In theory, a move that results in new MA plan options (or different plan IDs) fulfills this requirement, even if the beneficiary moves from Part D plan to Part D plan.
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Medical Savings Accounts
| When may beneficiaries enroll into or disenroll out of a Medicare Medical Savings Account (MSA) plan? |
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Enrollees may enroll in an MSA only during their Initial Enrollment Period (IEP) or during the yearly Annual Enrollment Period (AEP). The Open Enrollment Period (OEP), which runs from January 1 to March 31 each year, does not allow for enrollees to disenroll from or enroll into an MSA plan. See HAP’s Guide to Open Enrollment Period pictorial chart for more information on which changes are allowed during the OEP. Additionally, an MSA enrollee may disenroll from an MSA during a SEP or during the AEP. For more on MSA enrollment rules, see Chapter 2, section 30.7 of the Medicare Advantage Enrollment and Disenrollment in CMS’s Medicare Managed Care Manual.
| What happens to the deposit if an enrollee passes away in the middle of the plan year? |
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If an enrollee passes away during the plan year, deposit money may need to be returned. For example if an enrollee receives a $1200 deposit in January and then passes away in March, his estate will be assessed a prorated amount for each month he is no longer enrolled in the plan. Since end-of-life costs are typically high, it is very likely the deposit will be spent by this point. In this example, the estate would be charged $900 (for the remaining 9 months of the calendar year that he was no longer enrolled in the plan). For more information on, see page 222 of the 2009 MA Plan Call Letter.
| How often do plans make a deposit into an MSA? |
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All MSA plans offered in 2009 make a one-time yearly deposit into the savings account on January 1 of the plan year. This information may be found on CMS’s MSA Fact Sheet.
| Can an MSA plan disenroll a member who develops ESRD? |
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No. The Medicare Advantage (MA) program does not permit disenrollment of a member due to a change in health status including those members who develop End Stage Renal Disease (ESRD) after joining an MA plan. See Chapter 2, section 20.2.2 of Medicare Advantage Enrollment and Disenrollment in CMS’s Medicare Managed Care Manual for this authority language.
| How will beneficiaries know that the Part D premium is not a “Qualified Medical Expense” when the IRS lists “insurance premiums” as a QME in IRS publication 502? |
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| Can low-income subsidy (LIS) recipients (those NOT eligible for a Medicare Savings Program) be enrolled in an MSA plan? |
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Yes. According to Chapter 2, section 20.10 of Medicare Advantage Enrollment and Disenrollment in CMS’s Medicare Managed Care Manual, individuals with other health insurance coverage or with Medicaid cannot enroll in a Medicare MSA plan. The low-income subsidy (LIS) is not a limitation listed here and, therefore, would not by itself be considered a factor in Medicare MSA eligibility.
| Is the deposit money after you leave an MSA plan still restricted to Qualified Medical Expenses purchases, or can the deposit money be used to make other non-QME purchases tax-free? |
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IRS publication 969 explains tax rules for HSAs and MSAs, including Medicare MSAs. Tax rules continue to apply to accounts established in these types of plans even after someone is no longer enrolled in the plan.
| When is the 50 percent tax penalty imposed – when the unqualified medical expense is made or during tax season? |
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The 50 percent tax penalty on non-qualified medical expenses is imposed during tax season.
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Private Fee-for-Service (PFFS) Plans
| When must Private Fee-for-Service plans meet MIPPA's network requirements? |
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Beginning in 2011, Private Fee-for-Service (PFFS) plans (specifically, non-employer/union sponsored PFFS plans) are required to have networks of providers like other managed care plans. PFFS plans operating in regions of the country where there are fewer than two other network-based Medicare Advantage (MA) plans will not have to meet this requirement. In addition, all employer/union sponsored PFFS plans must operate using a network of providers beginning in 2011. These MIPPA changes for MA and Part D have been codified into the Code of Federal Regulations and are available in the Federal Register.
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Special Needs Plans (SNPs)
| Do SNPs have the authority to discontinue the continued enrollment of beneficiaries who do not qualify as the special need for their 2010 plans? |
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Due to MIPPA, SNPs are no longer allowed to operate as "disproportionate" SNPs, meaning they must limit new enrollments only to beneficiaries who are eligible for the special need of the SNP. In the final 2010 Call Letter, CMS states "CMS will issue detailed guidance later this spring that will outline the specific rules for plan transitions for SNP enrollees from 2009 to 2010." The Call Letter also states that CMS may permit C-SNPs to passively enroll certain individuals into new plans in 2010. The final Medicare Advantage Enrollment and Disenrollment chapter of the Medicare Managed Care Manual (currently available as a draft version) should provide more details about this process.
| When an increase in a person’s income makes her ineligible for a Special Needs Plan (SNP) for dual-eligible beneficiaries (SNP-D), does she have a guaranteed right for Medigap insurance? |
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Section 12 of the National Association of Insurance Commissioner’s (NAIC) model regulation for Medigap insurance says that an individual who is no longer eligible to elect a Medicare Advantage plan "because of a change in residence or other change in circumstances specified by the Secretary of the U.S. Department of Health & Human Services (HHS)," has a guaranteed issue right for Medicare supplement insurance. Thus, because federal rules specify that beneficiaries who lose their dual eligibility status have a Special Enrollment Period (SEP) to disenroll from a Medicare Advantage plan, it appears that ineligibility for a SNP-D due to a change in income would be an "other change in circumstance specified by the Secretary…." For more information on Medigap and guaranteed issue rights, see the Medigap Insurance and Other Supplemental Insurance section of HAP's SHIP Resource Guide: Medicare Basics.
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