Medicare Prescription Drug Coverage For Dummies
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Yes, if you fail to pay your Medicare premiums, you risk losing coverage, but that can't happen instantly without warning. The following discussion details how much wiggle room you're given if you miss any payments and how you can catch up depending on whether the problem has arisen in traditional Medicare or in a Part D or Medicare Advantage plan.

When you're in traditional Medicare

If you're billed for Part B premiums, either monthly or quarterly, and you miss one or more payments, here's what happens:

  1. The original billing notice is the regular one that requests payment by a specified due date — the 25th of the month. The grace period for paying this bill is three months, ending on the last day of the third month after the month in which the bill was sent. (For example, if a bill is due on January 25, the grace period ends on April 30.)

  2. If you don't pay the first bill, you're sent a letter marked "Second Notice," warning that you're in delinquency.

  3. If you don't pay after the Second Notice, you're sent a Delinquent Notice about one month before the end of the grace period. This document provides the specific date when your Part B coverage will end if the overdue premiums aren't paid by the due date (the end of the grace period). This is your termination notice.

    If you get into this situation, you should contact Social Security at 800-772-1213 (or TTY 800-325-0778). If you can pay off all the premiums owed within 30 days of the termination notice, your Part B coverage will continue. Or, if you have good reason for getting behind, you may be able to set up a repayment plan.

  4. If you still don't pay, you'll receive a letter from Social Security informing you of the termination of Part B coverage. It will be sent about 30 days after the end of the grace period — in other words, about four months after you received the first unpaid bill.

If you pay Part B premiums directly on a monthly basis, the termination process is the same as if you pay quarterly — that is, the grace period for nonpayment is still 90 days. However, if payment is received within 30 days after termination, your coverage may be reinstated. Also, you can pay off the full amount owed at any time during that four-month period and prevent the termination process.

When you're enrolled in a Medicare drug or health plan

If you stop paying or get behind with the monthly premiums required by your Part D or Medicare Advantage plan, what happens next depends on your plan's policy. Under Medicare rules, the plan can choose to do any of the following:

  • Allow your coverage to continue (in other words, do nothing)

  • Disenroll you after giving you a grace period and notice

  • Send you a letter inviting you to contact the plan if you're having difficulty paying the premium

Your plan can't stop coverage without warning. It must first send proper notice of its intent to disenroll you and inform you of its grace period. The grace period may be one, two, or three months long, depending on the plan, and it begins on the first day of the month for which a premium has gone unpaid. (For example, if a premium is due in January, the grace period begins on February 1.) Plans also have two options on how to deal with disenrollment after a grace period ends:

  • Single grace periods: If one or more overdue premiums haven't been paid in full during the grace period, the plan can terminate coverage at the end of that period.

  • Rollover grace periods: These arrangements are more flexible options a plan can choose to provide. If more than one premium is owed but you pay off one premium during the grace period, this grace period stops and the plan sends notice of a new grace period. This process continues until either you pay off all the owed premiums in full or you fail to make any payment during a grace period, at which time the plan can disenroll you.

Here are two situations in which you can't be disenrolled from your plan for not paying premiums, regardless of its policy:

  • If you've asked for premiums to be paid out of your Social Security benefit payments: The plan must work with Medicare to investigate why Social Security hasn't deducted the premiums or, if it has, why the plan hasn't received them. Whatever the reason, the plan can't disenroll you while you're considered to be in a state of premium withhold — that is, your premiums are being taken out of your Social Security check or you've asked for them to be deducted automatically in this way.

  • If your full premium is paid by a State Pharmacy Assistance Program or another sponsor: The plan must work with the SPAP or the sponsor (such as an employer or union that pays the plan's premiums for you) to receive the premiums.

If these two circumstances don't apply to you but you still think you've been dropped from your plan unfairly or by mistake, call Medicare at 800-633-4227 (or TTY 877-486-2048) and say you want to challenge the disenrollment. Medicare will investigate the situation. You should also call the plan and say that you want to remain enrolled. The plan must then tell you in writing that you should continue to use its services while your case is being investigated. If Medicare approves your challenge, your enrollment will be reinstated and backdated to the time you were dropped so that your coverage is unbroken. If you had to pay out of pocket for any services in the meantime, the plan must reimburse you.

The consequences of disenrollment

What happens if you're dropped from coverage? Can you get it back again? Yes, you can, but only at certain times. Here are the rules, depending on who cut you loose:

  • Disenrolled from Part A and/or Part B: You can reenroll only during the general enrollment period, which runs from January 1 to March 31 each year. Coverage doesn't begin until July 1. You may also get hit with permanent late penalties.

  • Dropped from a Part D drug plan: You can sign up for Part D coverage again only during the open enrollment period, which runs from October 15 to December 7 each year. So you may go several months without coverage and incur a late penalty when you sign up again. Your current plan has the right to take legal action to recover the premiums you haven't paid and/or the right not to reenroll you until you've paid the money you owe.

  • Cut from a Medicare Advantage plan: Keep in mind that even if you're tossed out of your plan, you're still automatically covered for medical services under traditional Medicare — provided that you've kept up your regular Part B premiums. But you lose drug coverage if your MA plan included Part D services. You can enroll in a different MA plan — and pick up drug coverage again — only during open enrollment (October 15 to December 7), unless you qualify for a special enrollment period. Your current plan is entitled to take legal action to recover your unpaid premiums and can deny reinstatement in the same plan until you've repaid them.

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