I have a question for you agents who sell MA plans. A friend of mine has been in an MA plan for many years. He never opted for the Part D coverage that was available with his MA Plan (Part C). He never secured any creditable coverage such as the VA Prescription Plan. His MA coverage is being involuntarily terminated as 12/31/09. He is being offered more expensive MA programs from the same carrier. I advised him that although his current coverage is being involuntarily terminated, if he secures new MA coverage with Part D he will have to pay a penalty that lasts into perpetuity. Someone else advised him that he will not be penalized inasmuch as his current plan is an involuntary termination. I believe that no penalty would apply only if his current MA plan included Part D coverage. Am I correct?
Re: Medicare Part D Late Enrollment PenaltyGo to Top
You are correct. He will have a penalty. If he's been on Medicare since before 6/2006 then he'll have 42% if he aged in later than that it's 1% per month.
And 1% penalty for 2010 = .32 cents. So the max right now is 42 x .32 = $13.44/mo added to his plan.
Re: Medicare Part D Late Enrollment PenaltyGo to Top
Originally Posted by G.Gordon
You are correct. He will have a penalty. If he's been on Medicare since before 6/2006 then he'll have 42% if he aged in later than that it's 1% per month.
And 1% penalty for 2010 = .32 cents. So the max right now is 42 x .32 = $13.44/mo added to his plan.
I understand how the penalty works but just for shoots and giggles, how does it work if a client has not had pdp or mapd but then signs up for a zero premium plan which is an mapd? How is the penalty calculated there or does he skirt around it? Or is the penalty based on the national average and even though he is paying zero premium he still needs to pay the penalty based on the national average and it deducted from social security? Gets kind of klugey. I am guessing the second scenario but I defer to someone who knows.
------------------------------------ The Bolsheviks are dining in the capital.
Re: Medicare Part D Late Enrollment PenaltyGo to Top
Originally Posted by G.Gordon
You are correct. He will have a penalty. If he's been on Medicare since before 6/2006 then he'll have 42% if he aged in later than that it's 1% per month.
And 1% penalty for 2010 = .32 cents. So the max right now is 42 x .32 = $13.44/mo added to his plan.
Thank you for the reply. Thanks too for the computation of the penalty.
Re: Medicare Part D Late Enrollment PenaltyGo to Top
The National average varies each year.
Lets assume someone never had creditable coverage, and , as of Jan 1 2010, they decide to enroll in either a Part D , or, MAPD. $12.20 would be added monthly to whatever plan they purchase.
The Part D base beneficiary premium for 2006 was $32.20x.06=$1.93
The Part D base beneficiary premium for 2007 was $27.35x.12=$3.28
The Part D base beneficiary premium for 2008 was $27.93x.12=$3.35 The Part D base beneficiary premium for 2009 was $30.36x.12=$3.64
Re: Medicare Part D Late Enrollment PenaltyGo to Top
Originally Posted by Winter
I understand how the penalty works but just for shoots and giggles, how does it work if a client has not had pdp or mapd but then signs up for a zero premium plan which is an mapd? How is the penalty calculated there or does he skirt around it? Or is the penalty based on the national average and even though he is paying zero premium he still needs to pay the penalty based on the national average and it deducted from social security? Gets kind of klugey. I am guessing the second scenario but I defer to someone who knows.
The penalty is the same. They will charge only the penalty if he is in a $0 premium plan.
Re: Medicare Part D Late Enrollment PenaltyGo to Top
SOMEONE SAID- "I advised him that although his current coverage is being involuntarily terminated, if he secures new MA coverage with Part D he will have to pay a penalty that lasts into perpetuity"
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I would advise him to get a medicare supplement. I would level with the guy and be honest and tell him the MA plans are going down the tubes and he might as well just get a supp now rather then put it off a year or two. I would ask him if the idea of switching MA's every other year sounds like his idea of fun because thats what hes looking at. I would tell him to save himself alot of hassle and trouble and just get a medicare supplement and if hes been doing fine without a drug plan so far then dont even worry about getting a drug plan. I would tell him that at the rate these medicare drug plans are rapidly getting worse and worse every year that they could well be semi worthless in a few years anyway except for catastrophic circumstances so who cares about the stupid late penalty anyway. I would tell him should he wake up down the road and find himself using 10,000 dollars worth of drugs he can sign up for a drug plan then since there is no medical underwriting. That advice is golden DID I SAY THAT YET!
Re: Medicare Part D Late Enrollment PenaltyGo to Top
Once the tardy senior applies for MAPD in 2010 and the penalty is calculated does it stay the same each year and is just added to the Part D premium or is it recalculated each year? I would assume it stays locked in.
BTW which calculation of the penalty, $12.20 or $13.44, correct?
Re: Medicare Part D Late Enrollment PenaltyGo to Top
Originally Posted by Winter
I understand how the penalty works but just for shoots and giggles, how does it work if a client has not had pdp or mapd but then signs up for a zero premium plan which is an mapd? How is the penalty calculated there or does he skirt around it? Or is the penalty based on the national average and even though he is paying zero premium he still needs to pay the penalty based on the national average and it deducted from social security? Gets kind of klugey. I am guessing the second scenario but I defer to someone who knows.
His penalty is the same as someon buying a PDP for the first time if no credible coverage was in place. The panalty attaches to the PDP regardless of if its attached to a MA or not.
DS4,
You are incorrect. The penalty for 2010 is off the national standard prem. of $31.98 so I rounded up to .32 cents.
Yoda,
Per usual. Your response in imature, inaccurate, and was based on misinformed shallow opinions rather than the particular details that might effect one client over another. If this client lives smack dab in the middle of a metro area he is in very small risk of his MA market collapsing. If he's been on a MA for years and years he might be well versed in the changes of his local MA market. While the drug plans are changing they aren't exactly useless. So you would advise a senior to wait till they are on $10k worth of drugs cause they can buy one anytime? REALLY?!!! Would you bother telling them about AEP? Do you know what AEP is? That advise is golden alright... cause it's piss.
Do you ever think farther than your fingers when posting?
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Originally Posted by arnguy
Once the tardy senior applies for MAPD in 2010 and the penalty is calculated does it stay the same each year and is just added to the Part D premium or is it recalculated each year? I would assume it stays locked in.
BTW which calculation of the penalty, $12.20 or $13.44, correct?
The $13.44 is correct. 32 cents by 42 months. Simple.
The penalty increases each year. Page 67, Medicare and You 2010.
Last edited by G.Gordon : 10-29-2009 at 07:53 PM.
Reason: Posts merged
Re: Medicare Part D Late Enrollment PenaltyGo to Top
Originally Posted by G.Gordon
DS4,
You are incorrect. The penalty for 2010 is off the national standard prem. of $31.98 so I rounded up to .32 cents.
I beg to differ.
The National Average differs each year. If you do not have creditable coverage during any of these years, the 1% penalty is based on the National Average during that specific year.
You do not use the current National Average and applying it to prior years.
Re: Medicare Part D Late Enrollment PenaltyGo to Top
GORDON SAID- "While the drug plans are changing they aren't exactly useless. So you would advise a senior to wait till they are on $10k worth of drugs cause they can buy one anytime? REALLY?!!! Would you bother telling them about AEP? Do you know what AEP is? That advise is golden alright... cause it's piss."
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Im saying the drug plans never looked better then they did the first year they came out and never looked worse then they do now. We dont need a crystal ball to see where these drug plans are going. They will look worse next year and even worse the year after that Eventually the wheels are going to come off those drug plans just like they are now coming off the MA plans. Im sorry if it breaks you kids hearts that you wont be able to give away those MA"s no more for a living and will have to go back to being real insurance agents and selling insurance. I hope all you MA lovers are still around in this business a couple of years from now when they finally put the fork in Medicare advantage plans so I can tell you all I told you so and you can tell me how stupid I am. And then you can waste your time and your clients time going out and selling them supps like you should of in the first place while I am out finding new customers as I collect my medicare supplement renewals Sorry!
Re: Medicare Part D Late Enrollment PenaltyGo to Top
Hey.. Yoda of Moronis. I have one MA on the books. That represents < .01% of my senior business. You're an assumptive ass.
So where did you earn your actuarial degree? Do you know what an actuary is? Do you understand actuarial science?
Google it... mkay?
So you "know" beyond a shaddow of a doubt that the current trend is what will continue down the road? What information leads you to that "assumption"? Past trends? Well isn't that ignorant of what changes in regulation or model law might be in the works?
Re: Medicare Part D Late Enrollment PenaltyGo to Top
Originally Posted by DS4
I beg to differ.
The National Average differs each year. If you do not have creditable coverage during any of these years, the 1% penalty is based on the National Average during that specific year.
You do not use the current National Average and applying it to prior years.
Where do you get that info? I believe that G. Gordon is correct as that is how I was taught. However, if you have something to support the way you are figuring, I would like to see it.
Re: Medicare Part D Late Enrollment PenaltyGo to Top
Originally Posted by DS4
I beg to differ.
The National Average differs each year. If you do not have creditable coverage during any of these years, the 1% penalty is based on the National Average during that specific year.
You do not use the current National Average and applying it to prior years.
Sorry, but I'm right. I have clients that have penalties that reflect all months without coverage mulitplied by the current National Average for the standard premium. So if someone hasn't had coverage and enrolls for 1/1/2010 they carry 42 months by .32 or $13.44.
I have real life examples and have seen it apply. That trumps assumption. Plus... read page 67 and that makes it pretty clear with what I've experienced.
Re: Medicare Part D Late Enrollment PenaltyGo to Top
G. Gordon,
You are correct!
I found a CMS memo,
"Calculation, Billing, and Collection of the LEP
The LEP is assessed as 1% of the national base beneficiary premium for the coverage year times the total number of uncovered months, regardless of the year(s) in which those months occurred. The national base beneficiary premium is not the Part D plan sponsor’s premium, but is a national amount that is a function of the national average bid for the year in which the beneficiary is enrolled in a Part D plan sponsor. Therefore, even if there is no change in the number of uncovered months, the LEP may change each year because it is recalculated using the total number of uncovered months and the national base beneficiary premium for that particular year.
Due to systems constraints, the LEP is rounded to the nearest ten cents"
I will now retire for the evening and eat my crow in peace.
Re: Medicare Part D Late Enrollment PenaltyGo to Top
GORDON SAID- "Hey.. Yoda of Moronis. I have one MA on the books. That represents < .01% of my senior business. You're an assumptive ass."
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I sincerely apologize to you for implying in any way that you are dealing in WMD"s er I mean MA's. I even apologize for taking so long to apologize. To falsely accuse someone of selling those S.O.B.s er I mean those MA's is a horrible thing to do.
Re: Medicare Part D Late Enrollment PenaltyGo to Top
Originally Posted by DS4
G. Gordon,
You are correct!
I found a CMS memo,
"Calculation, Billing, and Collection of the LEP
The LEP is assessed as 1% of the national base beneficiary premium for the coverage year times the total number of uncovered months, regardless of the year(s) in which those months occurred. The national base beneficiary premium is not the Part D plan sponsor’s premium, but is a national amount that is a function of the national average bid for the year in which the beneficiary is enrolled in a Part D plan sponsor. Therefore, even if there is no change in the number of uncovered months, the LEP may change each year because it is recalculated using the total number of uncovered months and the national base beneficiary premium for that particular year.
Due to systems constraints, the LEP is rounded to the nearest ten cents"
I will now retire for the evening and eat my crow in peace.
You beat me to it, but I'm glad this was posted. BTW, it is good for an agent to make an estimate, but only Medicare makes the calculation. For MAPD plans, it is then given to the carrier to collect.
As far as future planning is concerned, if the beneficiary never applies for a PDP, he won't have anything to pay. That is possible, but unlikely. The older we get, the more likely we'll need drugs. In this day and age, some of us are only alive due to chemistry. The idea of him going back to Original Medicare (and, of course a Sup) is one scenario to avoid an LEP. The other is to qualify for LIS when his income drops close to FPL, or gets Medicaid.
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To be truly independent, an agent should not be dependent on a government bureaucrat for contracts or commissions.
Re: Medicare Part D Late Enrollment PenaltyGo to Top
Yoda, you are making quite a leap of faith to state that my friend should go to a Med Supp instead of an MA. In the Philadelphia meropolitan area the MA is a huge seller---even with increased premiums. Med Supps have been extremely hard to sell in urban areas because of the extra benefits MAs offer. That may change in the future, but for now he will stay with a MA. He is eligible for VA medical coverage and I am trying to persuade him to apply inasmuch as it is creditable coverage without any penalty. Also, there is no doughnut hole with VA prescription coverage.
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