Medicare Supplement Enrollment Rules

Posted by radadmin
March 1, 2016

Another Medicare Part D annual open enrollment season, when changes can be made to prescription drug plans, has now come and gone. Unless certain life events occur, changes to drug plans must now wait till the next open enrollment later this year (October 15 – December 7).

Often misunderstood is when changes to Medicare Supplements can be made. Unlike Medicare Part D and Medicare Advantage plans when there is a specific time of the year for consumers to make a change, Medicare Supplements have different rules. Although Medicare Supplements must adhere to strict Medicare guidelines, Medicare Supplements are not part of Medicare; they are private insurance policies.

If you are a current Medicare Supplement policyholder over age 65, you can apply at any time during the year for a Medicare Supplement plan from any carrier offering them. Your application may be subject to Medicare underwriting and a plan change could be denied based on health but, even so, you won’t lose the plan you currently have.

There is an exception known as the “Birthday Rule”. This rule gives policyholders the opportunity to change their Medicare Supplement with no medical underwriting when applying during their birthday month with coverage beginning first of the next month. This annual rule allows the policyholder to change to a plan of equal or lesser value — on a guaranteed basis.

So, even if you have serious medical conditions, you still have an opportunity once a year to “shop” the Medicare Supplement market and potentially lower premiums without being denied coverage.

Let us know if you want to look into a change. We’re more than happy to “shop” the market for you at any time. And we are always available to answer your questions.

Please note: Policyholders with older generation Medicare Supplements may not have the same “Birthday Rule” opportunities. We can look into this for you as well.

A Closer Look: Income-Related Monthly Adjustment Amount (IRMAA)

If you have a higher income, you will likely pay more for Medicare Part B and Part D Prescription Drug Coverage.  The increase is called the Income-Related Monthly Adjustment Amount (IRMAA) and is the government’s tool for raising more funds for the Medicare Program. This is how it works.

Medicare Part B covers expenses such as doctor visits, lab, x-ray, surgeons, therapies and more. Most  of the premium for Part B is covered by the government (from Medicare taxes and the general fund). It is supplemented with a premium paid by Medicare beneficiaries. The standard base Part B premium for 2016 is $121.80, which most beneficiaries pay. Higher income seniors, however, pay a higher amount by law.

Medicare Part D covers prescription medications. Qualified Part D plans are sold by private companies with premiums that vary greatly. Higher income seniors pay a Medicare Part D plan premium plus an additional IRMAA premium amount. Note: The Medicare Part D Prescription Drug program is optional and thus no IRMAA is assessed if you are not enrolled in a plan.

Social Security, the agency responsible for Medicare enrollment, makes the initial IRMAA determination using data from the Internal Revenue Service (IRS). The income used to make their determination is based on the modified adjusted gross income (or MAGI), which comes from the most recent tax filing provided by the IRS. This filing is generally from two years prior. For example, for someone turning 65 in 2016, Social Security would likely use the income earned in 2014 from the 2015 tax return. MAGI is based on total adjusted gross income with the certain deductions added back (such as IRA contributions, foreign income, and student loan interest or tuition).

If you file a joint tax return and your MAGI is greater than $170,000, you’ll pay higher premiums for your Part B and Medicare Part D prescription drug coverage. If you file your taxes using a different status, and your MAGI is greater than $85,000, you’ll also pay higher premiums. Annually adjusted income charts are used to determine these premiums. Social Security will adjust your IRMAA amounts annually as they review data from the next year’s MAGI in the IRMAA progression.

For 2016 IRMAA premiums see the following income charts.

2016 Medicare Part B Premium Amounts for Persons with Higher Income Levels

2016 Medicare Part D Premium Amounts for Persons with Higher Income Levels

If during the determination and notification process you disagree with the decision about your IRMAA, you will be given information and instructions on how to appeal. Reconsideration is possible if the income amount received from the IRS was incorrect or if there was a change in income due to a life event (such as marriage, divorce, severe income loss). For more information about appeals and how to submit one, visit this Medicare resource page: Appealing a higher Part B or Part D premium (IRMAA)

For more information about IRMAA or information pertaining to your specific circumstance, or to obtain appeal forms and further instructions, contact Social Security at 1-800-772-1213, or visit your local Social Security office.

The Question Column: New Medicare Cards

Q: Are new Medicare cards being issued without Social Security numbers?

A: Yes. New Medicare beneficiaries are often surprised to find their card includes their Social Security number. Medicare uses Social Security numbers as the primary means of identifying beneficiaries.

In an effort to protect seniors from identity theft, the Department of Health and Human Services (HHS) is issuing new Medicare cards that will no longer display Social Security numbers.  President Obama recently signed a bill giving Medicare officials up to four years to start issuing cards with new identifiers to new Medicare beneficiaries and four more years to reissue cards held by existing beneficiaries.

The Medicare Website provides useful information on how to prevent, spot, and report fraud.