WNY Legal Services for the Elderly - Legal News -> Know the Effects of Medicare Part D Enrollment

Legal News -> Know the Effects of Medicare Part D Enrollment

In the Public Service

Know the Effects of Medicare Part D Enrollment

By Frank R Vavonese

By now you have probably all heard of the new prescription drug coverage available to Medicare and Medicaid recipients known as Medicare Part D. Medicare Part D Plans are designed to alleviate the burden of prescription drug costs for anyone with Medicare Parts A and/or B, and to replace Medicaid as the primary drug coverage provider for low income individuals. With the next Medicare Part D open enrollment period of November 15 through December 31, 2006 fast approaching, every advocate should be aware that enrollment into a Stand Alone Medicare Part D Plan can result in termination of a client’s health care coverage through a Medicare Advantage Plan.

A Medicare Advantage plan is an HMO, PPO, or Private Fee for Service plan, administered by a private insurance company and partially subsidized by Medicare. Examples of Medicare Advantage Plans available in western New York are: Independent Health’s Encompass 65, Univera’s Senior Choice, and Blue Cross’s Senior Blue. Health care coverage under such plans is available to any Medicare parts A and B recipient. Medicare beneficiaries may enroll in a Medicare Advantage Plan either with or without inclusion of Part D benefits.

A “Stand Alone Medicare Part D Plan” consists solely of prescription drug coverage. These Part D Plans are also administered through private insurance companies and partially subsidized by Medicare. Some Stand Alone Medicare Part D Plans available in western New York include: Health Net Orange, Unicare’s Medicare Rx, and Humanna’s PDP plans, to name a few.

Both Medicare Advantage Plans and Stand Alone Part D plans are subsidized through government contracts and regulations permit only one contract per beneficiary. This permits an individual to only utilize either a Medicare Advantage Plan which may but does not necessarily include Part D coverage, or a Stand Alone Part D Plan. Medicare does not permit recipients to obtain coverage from both a Stand Alone Part D Plan and a Medicare Advantage Plan (except in the rare case of a Medicare Advantage Private Fee for Service Plan that does not offer Part D coverage).

The problem usually manifests itself in the following all-too-familiar scenario: An elderly client, “Mr. Smith,” will call in a state of panic because he received a letter from his health insurer or a call from the billing department at his doctor’s office, alerting him that his health insurance provider no longer recognizes him as a beneficiary. The medical procedure he underwent last June is not going to be covered by his health insurance and he is now responsible for all costs not covered by traditional Medicare. Smith had contacted his health insurance provider and was told that that as of June 1, 2006, coverage was terminated per “his request.” He insists that he never made such a request, and in fact says that his insurer continued to accept premium checks well after he lost coverage.

The only insurance-related activity that occurred during that period was that on May 15, he enrolled in a Medicare Part D Plan. He explains that he was never really sure what Medicare Part D was or of any consequences of enrollment. After exposure to the Medicare Part D advertising barrage of late 2005 and early 2006, in a rush to meet the enrollment deadline of May 15, he enrolled in a Stand Alone Part D Plan.

In the above case, Smith had health insurance through a Medicare Advantage Plan. He heard about the new Medicare Part D benefits and chose the plan which best suited his prescription drug needs. Unfortunately for Smith and many like him, the Part D Plan which offered the best coverage relative to his prescriptions was through a Stand Alone Plan and not offered by his Medicare Advantage Plan provider. When an individual enrolls in a Stand Alone Part D Plan while also covered by a Medicare Advantage Plan, Medicare interprets this enrollment as a request to terminate the Medicare Advantage Plan contract. Consequently, health care coverage under the Medicare Advantage plan terminates and he is now automatically enrolled into traditional Medicare.

Many Seniors Are Unaware of Contract Termination

The most serious consequence is that the beneficiary and his or her Medicare Advantage Plan provider may not be made aware of the contract termination until weeks or months after enrollment into the Stand Alone Part D Plan. Once someone enrolls into a Stand Alone Part D Plan, a representative of that plan is required to notify the Center for Medicare and Medicaid Services (CMS). CMS then notifies the Medicare Advantage Plan Provider that the beneficiary has acquired other coverage. The Medicare Advantage Plan contract is terminated as of the date Stand Alone Part D coverage began. As in the case above, and many like it that I have dealt with, the beneficiary is notified of cancellation of medical coverage well after coverage was terminated and post-termination health care expenses which the individual believed were covered had been incurred.

In my practice, I have found that the most efficient and effective way to resolve this problem is by notifying the Medicare Advantage Plan Provider that the termination was involuntary. A few providers have simple procedures in place to reverse the coverage termination, and if necessary, to add Part D coverage to the plan. Unfortunately, the vast majority of providers do not utilize such procedures. In those cases the advocate must contact the regional CMS office at (212) 616-2222 and describe the client’s plight. CMS may be able to retroactively enroll a client back into their Medicare Advantage Plan as of the date of termination. CMS may also obtain Medicare Part D coverage for the client as available through the Medicare Advantage Plan.

Each Medicare Part D Plan differs as to the specific prescription drugs that are covered. Therefore, Part D coverage under a Medicare Advantage Plan may not be as conducive to an individual’s prescription drug needs as under a particular Stand Alone Part D Plan. The client may elect to stay with the Stand Alone Part D Plan and use traditional Medicare parts A and B for health care coverage. In this case, he would usually need to buy a Medigap policy to cover the Medicare co-pays and deductibles previously covered by the Medicare Advantage Plan. Alternatively, he can choose to add the Medicare Advantage Plan Part D coverage and address any non-covered drugs through the exceptions/appeals process offered by that plan.

It should be noted that CMS has pre-enrollment notification requirements in place for Stand Alone Part D Plans. Although designed to avert involuntary termination of health care benefits, it has been my experience that a simple warning given to seniors that “Part D enrollment may cause membership in a Medicare Advantage Plan to end” is both ineffective and misleading. Unfortunately, many beneficiaries have no idea what a Medicare Advantage Plan is, or that they receive health insurance through one.

To avoid involuntary termination of health benefits during the upcoming enrollment period, it is important to for a practitioner to make a preliminary determination of whether health care coverage is though a Medicare Advantage Plan. If that is the case, clients must be warned that if they wish to keep current health care coverage, enrollment in Part D coverage through their Medicare Advantage Plan is required.

A simple warning to seniors that Part D enrollment may cause (plan) membership to end is both ineffective and misleading.

If the client’s health care coverage is not provided by a Medicare Advantage plan, he or she may still be subject to various coverage limitations as a consequence of Stand Alone Part D enrollment. Alternatively, you may find there is no need for enrollment in a Part D Plan at all. Many private health insurance policies provide prescription drug coverage in that considered “creditable,” meaning it is as good as or better than Part D coverage. If this is the case, request a letter from the provider stating same, and a Part D Plan need not be considered. Obtaining proof of creditable coverage will assure that the client will not be assessed a premium penalty should he or she later choose to enroll in a Part D Plan. In short, it is imperative that the client be forewarned of the many and sometimes dire consequences of joining a Medicare Part D Plan before enrolling.

Since February of 2006, I have been handling Medicare Part D cases in both the public interest arena at Legal Services for the Elderly, Disabled or Disadvantaged of WNY, Inc., under a grant provided by the Erie County Department of Senior Services, and in private practice through the law firm of Pfalzgraf, Beinhauer and Menzies, LLP. As a Medicare Part D advocate, I have assisted clients in not only in resolving the above-noted problem, but in choosing Part D plans, enrolling in Medicare Savings Programs, utilizing Low Income Subsidies, enrolling in the EPIC program, handling formulary exception requests, and seemingly countless other Part D problems.

Medicare beneficiaries or their advocates may contact me at Legal Services for the Elderly, Disabled or Disadvantaged of WNY, Inc., at 835-3087 for assistance with any problems related to Medicare Part D.