Understanding Medicare Part D Guidelines

In 2006 President George W. Bush implemented the Medicare Part D program in order to assist individuals in obtaining prescription drug coverage. However, anyone who has joined Medicare Part D or knows someone who has, understands how convoluted and confusing the program can be, especially for the elderly.

I currently work for Medicare Part D and everyday I come across new applications that are either missing information or are incorrectly filled out. Too many times I have had to deny applicants who didn't qualify for the program. Time and time again I am told by prospective members that they were unaware of the stipulations set by Medicare that make them ineligible for the program. Unfortunately too many people think that if they're 65 they automatically qualify for the program and that's just not true.

Here I will explain many of the common errors applicants make when applying for Medicare Part D as well as some of the Medicare guidelines, in the hopes that prospective members and their loved ones will better understand the application process. My hope is that by reading this article you will know how and when to apply so that your application gets accepted and you won't have to worry about being denied.

The Three Main Enrollment Periods

Medicare Part D has various enrollment periods, but the three main periods are: The AEP (Annual Enrollment Period), the SEP (Special Election Period), and the IEP (Initial Enrollment period).

The AEP: This enrollment period begins November 15 and ends December 31 of every year. Anyone who qualifies for Medicare Part D can do anything they want at this time. They can drop a plan, add a plan, or change plans.

The SEP: If you apply outside of the AEP timeframe, you need to have what Medicare refers to as a "special election" or a "special reason" to apply. Some of these reasons include losing employer coverage, involuntarily losing your current prescription drug coverage, moving to a new residence, being considered low income by Social Security, or moving into or out of a long-term care facility or rehabilitation center.

Keep in mind that some of these SEP's have their own individual guidelines. The two big ones have to do with losing your current coverage.

You have only two months from the time you lose your employer or other drug coverage to apply for Part D. If you apply two months and one day after losing coverage, your application will be denied.

It doesn't matter if you gave up your employer coverage or if you lost it for any other reason. You can apply for Medicare Part D regardless of how or why you lost your employer coverage. However, if you have current prescription coverage completely separate from your employer, you can not voluntarily give it up and pick up Medicare Part D. You have to have lost the coverage involuntarily.

If your SEP is that you lost some sort of coverage, you also have the ability to choose your effective date. You can choose either the 1st of the month following your enrollment request or you can choose a date two months beyond that. For example, if you are losing coverage on August 31, you can choose an effective date of Sept. 1, Oct. 1 or Nov. 1.

The IEP: This period surrounds the seven months you become eligible for Medicare Part D. You have three months before, the month of, and three months after you become eligible for Part D to apply for coverage.

Example: you become eligible for Part D on April 1, 2010. Your timeframe to enroll into the program would be January through July 2010; January, February, and March are the three months before your eligibility date, then you have April (the month of) and then May, June, and July which are the three months after your eligibility date.

It's also important to note that with the IEP you can not choose your effective date. Your effective date will either be the month following your request to enroll or, if you enroll sometime during the first three months before your eligibility date, your effective date will be the month you become eligible.

Example: If you are eligible for Part D as of April 1, 2010 and you apply in January, April1 will be your effective date, but if you apply in April, May 1 will be your start date.

There is also something known as a 2nd IEP which surrounds your 65th birthday.

Let's say that you are 30 years old and are eligible for Medicare Part D because you have a disability. Your first IEP is the seven months surrounding your eligibility date as previously explained. When you turn 65 you will receive a 2nd IEP and again, your enrollment period will be the three months before, the month of, and three months after your 65th birthday.

The Biggest Mistakes Prospective Members Make

Incorrect address: Even if you receive your mail at a P.O. Box, do not write it down in the "Permanent Residence Address" area. Too many members do this. Medicare requires us to have a permanent residence on file unless you're homeless or in a shelter. If you put a P.O. Box where it says "Permanent Residence Address" then the person working on your enrollment will have to make an outbound call to try to reach you in order to obtain a permanent address. If you aren't reached, they are required to send you an RFI (Request for Information letter) which means your application will not be able to be processed until you respond to that letter. Save everyone, including yourself, the extra time and be sure to include a permanent residence address on your application so it can be processed as quickly as possible. There is also a mailing address section where you can include your P.O. Box.

Paying a broker/agent to assist them: I would say about 90 percent of all applications that have a broker or agent attached to them are just plain wrong. I'm not sure if agents/brokers are trained in Medicare guidelines, but whether it's listing an un-qualifying SEP, putting a P.O. Box in the permanent address section or forgetting to have the member sign the application, agents/brokers seem to make a lot of mistakes and then those of us processing the applications have to put the it on hold while trying to obtain the correct information. You're better off finding a friend or family member who can help you fill out the application. And it's free.

Not having a valid SEP: A lot of this has to do with members not realizing that there are various election periods or not realizing what the guidelines are. Sometimes members will try to apply six months after losing coverage while others think that just needing prescription drug coverage is a qualifying SEP (it's not). To see a listing of the various SEP's please utilize this Medicare Part D Blog entry.

Thinking they're new: Too many times prospective members will list themselves as being "new" when they're not. In the Medicare Part D world, being new has to do with when you become eligible for Part D. You may be new to Part A or B but that has nothing to do with being new to Part D. If you have never had Part D before and are just becoming eligible then you can say you're new.

Thinking they have to have both A & B: You don't need both to have Part D. You only need to have Part A or Part B. You can have both, but it's not necessary.

Not listing a POA: If you are assisting someone with their application or filling it out for them, please be aware that if you are not on file as POA (Power of Attorney), you will not be able to speak for them when a Medicare representative calls to obtain missing information. It doesn't matter if you're a spouse or parent either. The only time you will be able to speak for the prospective member is if they get on the phone and give the representative verbal authorization to speak to you. This is a safety and security precaution. Just think of what it would be like if someone could call your credit card company or bank and make changes without your knowledge or consent.

While there are varying mistakes members make when applying for Medicare Part D, these are some of the biggies. Hopefully now you will better understand what goes into the application process and what Medicare is looking for, and it's my hope that you will now be able to apply for the program with less confusion than before.