The agency that runs Medicare is phasing out a rescue effort aimed at consumers who signed up for Affordable Care Act (ACA) public exchange plans when they should have signed up for Medicare Part B physician and outpatient services coverage.
The Centers for Medicaid and Services (CMS) says it will cut off eligibility for the fix for ACA exchange plan users with Medicare Part B problems June 30, 2020.
The fix can help Medicare plan clients who were using ACA exchange plans in place of Medicare Part B coverage, then sign up for Medicare Part B coverage late.
When those clients sign up for Medicare Part B coverage, CMS will waive the Medicare Part B late enrollment penalty.
Medicare Basics
The Medicare Part A hospitalization plan pays enrollees’ hospital bills.
Most people who have lived and paid taxes in the United States for many years have paid enough into the system that they qualify to enroll in Medicare Part A coverage without paying any additional premiums.
The Medicare Part B program, which covers physicians’ bills, outpatient services and some other health care costs, is a voluntary insurance program. Most consumers have to pay a monthly premium to get Part B coverage.
The standard Medicare Part B premium for 2019 is $135.50 per month, or $1,626 per year.
Consumers who age into Medicare Part A hospitalization coverage, then sign up of for Medicare Part B coverage late, may have to pay a Medicare Part B late enrollment penalty. For consumers who don’t qualify for exceptions, the late enrollment penalty adds 10% of the standard premium amount to a consumer’s annual Medicare Part B bill.
If, for example, Jane Doe put off signing up for Medicare Part B coverage for two years, had no special exemptions, and fit in the income guidelines for paying the standard premium, she would pay 20% more than the standard 2019 premium for 2019 Medicare Part B coverage, or $1,951.20 per year.
The Double Dipper Problem
Starting in 2014, the ACA public exchange system gave people a way to use federal premium tax credit subsidies to buy standardized health plans, from commercial health insurers, through a web-based health insurance supermarket.
Congress and regulators in Washington have created many rules designed to keep people from combining ACA exchange plan coverage with other types of coverage. One reason was to save ACA premium tax credit money, and another was to keep ACA exchange plan coverage from crowding out other types of coverage.
People with Medicare Part A coverage, including people who get Medicare coverage through Medicare Advantage plans, can buy coverage through an ACA exchange program, such as HealthCare.gov or Covered California, but they can’t use an ACA premium tax credit to pay for the coverage.
Some people with Medicare Part A coverage have used ACA premium tax credits to pay their ACA exchange plan bills.
The CMS fix can help Medicare-ACA exchange plan double dippers with Medicare Part B late enrollment penalties once they sign up for Medicare Part B coverage.
The Internal Revenue Service may ask double dippers who used ACA tax credits to pay for their exchange plan coverage to pay back the tax credits. The CMS fix won’t help double dippers with IRS tax credit repayment bills.
Why CMS Has Offered the Fix
CMS believes that many of the double dippers didn’t understand what signing up for Medicare Part B late would do to their Medicare Part B premiums.
The End of the Fix
CMS note that it will still help people who double dipped before June 30, 2020, even if they ask for help after that.
But the agency says it’s now phasing out the fix and giving consumers more information about the effects of delayed enrollment in Medicare Part B.
The Medicare Rights Center, a nonprofit advocacy group based in New York, said in a statement about the CMS announcement that CMS could have cut off access to the fix earlier.
About 80 state and national organizations had asked CMS to extend the elibility period for the fix, the center said.
Efforts to improve consumer education about the effects of a Medicare Part B enrollment delay should also help, the center said.
Implications for Agents
The center may have set an example for how Medicare agents can use the CMS announcement to reach out to consumers.
The center sent out a helpful announcement explaining what CMS did.
At the end of the announcement, the center included a “call to action” suggesting that consumers call its own toll-free number or state organizations for more information.
The center also gave the toll-free numbers for the State Health Insurance Program locator service and for the Social Security Administration, the agency responsible for answering Medicare Part B enrollment questions.
Resources
A link to information about how to help Medicare Part A enrollees who end up in exchange plans is available here.
Information about the Medicare Part B late enrollment penalty is available here.