Every year, the way that Extra Help and Medicaid interact changes. This year is no exception.
If you receive Extra Help, the federal program under which you can receive premium and copay relief, there are special, not widely-known factors that come into play.
- The Part B and Part D Late Enrollment Penalties are waived.
- You are not bound by the Annual Election Period, which runs from October 15 – December 7. You have the regulated right to a Special Enrollment Period (SEP) which allows you to change your Part D or Medicare Advantage plan (including those that include prescription drug benefits), at any time during the year.
Many people are aware that Medicare Advantage premiums, deductibles, and copays change. That is the nature of all Medicare Advantage and Part D plans. They are annual contracts, that run from January 1 through December 31st.
What many people do not know is that when a person qualifies for either Medicaid or Extra Help, then the premium of the Medicare Advantage plan can be lower than the published premium. The reason for this is that the allocated funds, resulting from Extra Help, are allocated to the premium of the Medicare Advantage plan. The net result of this is that the actual premium due by the Medicare Advantage policyholder can be lower than the published premium.
The remaining question is then: are the funds from Extra Help allocated in the same manner towards every Medicare Advantage Prescription Drug or Part D plan? The answer to this is no. Let’s take an example.
- Medicare Advantage Prescription Drug plan #1: $50 monthly premium (remember, Part A and Part B enrollment are required).
- Medicare Advantage Prescription Drug plan #2: $65 monthly premium
- Medicare Advantage Prescription Drug plan #1 with Extra Help: $40.
- Medicare Advantage Prescription Drug plan #2 with Extra Help: $35.
The same comparison can occur in standalone prescription plans (Part D).
How does this happen?
This happens because Medicare Advantage (and Part D) plan carriers are adjusting the plans every year, and as mentioned earlier, Medicare Advantage and Part D plans are annual contracts. That also implies that the carriers are re-allocating the Extra Help funds towards the premiums in a different manner every year. Voila, the combination of these factors results in the simple example provided.
Does This Matter?
It can matter a great deal, depending on your location and the healthcare providers that you want to use. If you look at the example above, it is notable that the network and the carrier were both unnamed. It can be the case that Medicare Advantage Prescription Drug Plan #1 is an HMO-POS, and Medicare Advantage Prescription Drug Plan #2 is a PPO. Since that can be the case, and if it matters to you that you would prefer a PPO, because your doctor or hospital only accepts the PPO, then it can be entirely possible that you would prefer Medicare Advantage Prescription Drug plan #2, and it may also have a lower premium.
The bottom line is that when you consider that Medicare Advantage Drug Plans (MAPD) and Part D plans change annually, and if you also receive Extra Help (also known as Limited Income Subsidy, LIS), then the manner in which the Extra Help funds may make a very large difference when deciding which Medicare Advantage (or Part D) plan is best for you.