The purpose of this bulletin is to remind carriers offering Medicare supplement and/or Medicare Advantage plans of their duties, and the coverage options available to Medicare beneficiaries impacted by Medicare Advantage annual non-renewals, under both federal law and Texas regulations.
In order to facilitate the transition for Texans who are losing their Medicare Advantage coverage, carriers must ensure that Texans having this coverage involuntarily terminated have access to the proper information regarding coverage options. There are a number of coverage options for these Texans due to guaranteed issue, open enrollment, and trial period provisions that apply to Medicare supplement policies and Medicare Advantage coverage available from remaining plans. These options may require time-critical decisions. For example, some enrollees may have additional coverage options if they disenroll from their Medicare Advantage plan prior to the December 31, 2010, termination date.
In compliance with federal law and Centers for Medicare & Medicaid Services (CMS) guidance, all Medicare Advantage carriers terminating coverage should provide their enrollees with a letter outlining their individual options. It is extremely important that all Medicare supplement and Medicare Advantage carriers educate their agents and administrative staff of the law's requirements to ensure full compliance. Additionally, it is essential that all carriers prepare to handle anticipated increases in inquiries and/or applications. To assist in your efforts, we have summarized the coverage options available and the corresponding duties of carriers engaged in either the Medicare supplement or the Medicare Advantage business in Texas.
An electronic copy of the CMS Medicare Managed Care Manual for Medicare Advantage Enrollment and Disenrollment is available online at the following location:
http://www.cms.gov/MedicareMangCareEligEnrol/Downloads/FINALMAEnrollmentandDisenrollmentGuidanceUpdateforCY2011.pdf
DUTIES OF CARRIERS:
I. Carriers continuing Medicare Advantage plans - provide sufficient, informed staff to assist individuals contacting you regarding coverage options, costs and benefits for 2011, and/or the application process for enrollment.
II. Carriers discontinuing Medicare Advantage plans - provide access to quality health care services and care coordination assistance through December 31, 2010. Provide, as required by the CMS, written notice to enrollees that their coverage is terminating, which outlines their available coverage options, including information for persons with End-Stage Renal Disease (ESRD) and those who qualify for Extra Help or get help from the Medicaid program. Provide sufficient, informed staff to assist individuals contacting you requesting clarification regarding the letter, the termination process, and coverage options. As many Medicare Advantage carriers offer various Medicare Advantage products, these carriers should be mindful of compliance with new marketing rules regarding inappropriate marketing to members that might be interpreted as steering them to their other plans. Additionally, carriers need to respond to requests from members for copies of the non-renewing letter, verification of creditable coverage, and/or verification of membership in a non-renewing or terminating plan.
III. Carriers offering Medicare supplement plans - provide sufficient, informed staff to assist individuals contacting you regarding applications, coverage options, and premium costs for 2011, and/or the application process for enrollment.
IV. Carriers continuing/discontinuing Medicare Advantage plans or offering Medicare supplement coverage - may direct an individual needing more information to understand their Medicare options for 2011 to TDI's Consumer Protection Division at 800-252-3439 or direct them to the TDI website at www.tdi.state.tx.us. You may also refer an individual to the Texas State Health Insurance Assistance Program, known as Health Information, Counseling and Advocacy Program (HICAP), at 800-252-9240. In Texas, HICAP benefit counselors are familiar with the termination process.
SUMMARY OF COVERAGE OPTIONS AVAILABLE:
I. Coverage under another Medicare Advantage plan - Enrollees wishing to remain in Medicare Advantage may enroll in another Medicare Advantage plan if they reside within the plan's service area. A carrier that offers Medicare Advantage coverage must make its coverage available to enrollees otherwise eligible whose coverage is being terminated by another Medicare Advantage plan if the affected enrollee resides within its service area. The exception to this requirement is if the Medicare Advantage carrier has other eligibility requirements that would otherwise exclude an individual from enrolling in the Medicare Advantage plan, such as a Special Needs Plan.
II. Coverage under a Medicare supplement plan - Alternatively, enrollees may return to "original" Medicare, in which case they may also purchase a Medicare supplement policy under rules related to Guaranteed Issue - Involuntary Termination. The time period for guaranteed issue begins from the date an individual receives notice of a termination from their plan and ends 63 days after Medicare Advantage coverage ended. Enrollees who wish to purchase a Medicare supplement policy have various options available depending on certain criteria. The various options are outlined below:
A. Enrollees who are 65 years of age or older and enrolled in Medicare Part B whose coverage in Medicare Advantage is being involuntarily discontinued as of December 31, 2010, have the right to guaranteed issuance of a Medicare supplement Plan A, B, C, F (including F with a high deductible), K, or L offered by any carrier issuing Medicare supplement plans in Texas. Individuals may apply for coverage anytime between the date they receive the termination letter from the Medicare Advantage carrier and the 63rd day after coverage under the Medicare Advantage plan ends.
B. Enrollees who are under 65 years of age whose coverage in Medicare Advantage is being involuntarily discontinued as of December 31, 2010, have the right to guaranteed issuance of Medicare supplement Plan A from any carrier issuing Medicare supplement coverage in Texas. Individuals may apply for coverage anytime between the date they receive the official termination letter from the Medicare Advantage carrier and the 63rd day after coverage under the Medicare Advantage Plan ends.
C. Enrollees in their open enrollment to Medicare (i.e., those who have been on Medicare Part B for less than six months) have additional rights as explained below. Medicare Advantage carriers are required by CMS to advise eligible enrollees of their special rights and timelines in their final notification letter.
1. Open enrollment for individuals age 65 or older - An individual age 65 or older who is within the six-month open enrollment period may purchase any Medicare supplement plan offered in Texas, so long as the individual applies for coverage within the six-month open enrollment period. An individual who wants to purchase Medicare supplement coverage before the end of the year must disenroll from the Medicare Advantage plan prior to Medicare supplement coverage becoming effective.
2. Open enrollment for individuals under age 65 - An individual under age 65 who is within the six-month open enrollment period (beginning when the individual under age 65 first enrolls in Medicare Part B) may purchase Plan A.
D. Enrollees in their initial or extended trial period whose Medicare Advantage coverage will be terminating have certain rights if they disenroll from the Medicare Advantage plan before the December 31, 2010, termination date. These rights are explained in paragraphs 1 - 3 below. Should these enrollees fail to disenroll and otherwise exercise these additional rights, they remain eligible for the coverage options described above.
1. Trial period for an individual who left a Medicare supplement plan to enroll in a Medicare Advantage plan for the first time - This individual can purchase, on a guaranteed issue basis, the same Medicare supplement plan that the individual had prior to enrolling in the Medicare Advantage, if the carrier is still offering the Medicare supplement plan and if the individual: (a) left the Medicare supplement plan to enroll in the Medicare Advantage plan; (b) was never enrolled in another Medicare Advantage plan, Medicare Select or PACE program; (c) disenrolled within one year of initial enrollment in the alternative plan (Medicare Advantage plan, Medicare Select plan or PACE) program; and (d) reapplied for the Medicare supplement plan he/she previously had no later than 63 days after the effective date of disenrollment from the Medicare Advantage plan. If the carrier is no longer offering the same Medicare supplement plan or the individual does not disenroll before the end of the year, the individual may purchase Medicare supplement Plan A, B, C, F (including F with a high deductible), K, or L offered by any carrier issuing Medicare supplement coverage in Texas.
2. Trial period for an individual age 65 or older who enrolled in a Medicare Advantage plan upon first becoming eligible for Medicare Part B - This individual (who may no longer be in the six-month open enrollment period) may purchase, on a guaranteed issue basis, any Medicare supplement plan offered in Texas if the individual: (a) enrolled in the Medicare Advantage plan upon first becoming eligible for Medicare; (b) disenrolls within one year of initial enrollment in the Medicare Advantage plan; and (c) applies for the Medicare supplement plan no later than 63 days after the effective date of disenrollment from the Medicare Advantage plan.
E. An individual can extend his or her initial trial period if his or her coverage was involuntary terminated within the first 12 months and the individual had: (a) enrolled in the Medicare Advantage plan upon first becoming eligible for Medicare Part B or left a Medicare supplement plan and enrolled in a Medicare Advantage, Medicare Select or PACE Program for the first time; and subsequently (b) enrolls in another Medicare Advantage plan immediately after termination. This individual will have a new 12-month period to try out the new Medicare Advantage plan. During this extended trial period, the individual will have all the same rights the individual had during the initial trial period. The maximum time the individual can be in a trial period is two years after the individual first enrolled in a Medicare Advantage plan.
TIMING OF APPLICATION FOR EFFECTIVE DATE OF MEDICARE SUPPLEMENT COVERAGE
To ensure that there is no gap in coverage for benefits, an enrollee (of any age) whose coverage under a Medicare Advantage plan is being terminated on December 31, 2010, and who elects to apply for Medicare supplement coverage, may request the replacing Medicare supplement coverage to be made effective following the date the Medicare Advantage coverage terminates or may ask for an earlier effective date if the enrollee elects to disenroll prior to December 31, 2010. While state and federal law prohibits the sale of a health insurance policy that duplicates benefits, including a Medicare supplement plan that duplicates benefits an individual has under a Medicare Advantage plan, Medicare supplement carriers can and should sell Medicare Advantage enrollees Medicare supplement plans that will take effect as soon as their Medicare Advantage coverage ends.
Accordingly, you should clarify this issue with your agents and staff and amend your procedures, if necessary. If the enrollee elects to make the replacing coverage effective prior to the termination of the Medicare Advantage coverage, the enrollee must request the Medicare Advantage carrier to disenroll the enrollee from the Medicare Advantage coverage prior to the end of a month for the disenrollment to be made effective the first of the following month (e.g., request disenrollment by November 30, 2010, for a December 1, 2010, disenrollment date). To ensure continuous coverage, the enrollee must request the Medicare supplement carrier to make the replacement coverage effective the same date the enrollee was disenrolled from the Medicare Advantage plan (e.g., if Medicare Advantage disenrollment is December 1, 2010, the replacement coverage should be made effective December 1, 2010).
Carriers should also verify that the plans being offered are correct and in accordance with June 1, 2010, required plan changes. Information regarding the June 1, 2010, required plan changes is available on the TDI website in the TDI Medicare Supplement Rate Guide and Handbook at the following location:
http://www.tdi.state.tx.us/pubs/consumer/medsup.html
"GUARANTEED ISSUE" VS. "OPEN ENROLLMENT"
In evaluating the coverage options outlined above, your staff should be aware that Medicare beneficiaries should consider not only the different enrollment rights, but also the different protections offered by guaranteed issue and open enrollment. For example, when you issue coverage to an individual under the individual's guaranteed issue rights, the following protections apply:
I. You cannot impose a waiting period or preexisting condition exclusion; and
II. You cannot discriminate in the price of the policy based on the individual's health status, claim experience, receipt of health care or an existing medical condition.
When you issue coverage to an individual under open enrollment you may apply a preexisting condition waiting period of up to six months; however, you must credit the individual's prior health coverage against the waiting period.
RANGE OF PLANS AVAILABLE TO UNDER-65 MEDICARE BENEFICIARIES
Texas regulations require Medicare supplement carriers to offer at least Plan A to individuals who qualify for Medicare before attaining age 65; therefore, all carriers offering Medicare supplement coverage in Texas are required to offer Plan A to individuals under age 65 whose coverage under the Medicare Advantage plan is being terminated.
If you have any specific questions regarding this bulletin, please contact Audrey Selden at 512-475-1760 or at Audrey.Selden@tdi.state.tx.us. For general information, please contact ChiefClerk@tdi.state.tx.us.
Mike Geeslin
Commissioner of Insurance