This legislation was signed into law by President Obama on December 13, 2016 as part of the 21st Century Cures Act. The bill was passed by the House on December 1 and by the Senate on December 7.
ISSUE SUMMARY:
Before the PPACA, beneficiaries enrolled in a Medicare Advantage (MA) plan could make a one-time switch to another MA plan that better met their healthcare needs between January and March. This allowed beneficiaries to “test drive” their plans and not be locked into a coverage plan if their needs changed. However, now beneficiaries enrolled in MA plans who wish to make a plan change can only dis-enroll from their current coverage and enroll in traditional Medicare. H.R. 2581 would restore the original OEP for Medicare beneficiaries so that beneficiaries are able to have the most flexibility in choosing the bill that is right for them.
ACTION NEEDED:
Congress should restore the OEP by passing the bipartisan legislation, H.R. 2581. This bill would restore an important consumer protection for Medicare beneficiaries. Health insurance agents and brokers report that many Medicare beneficiaries who could truly benefit from the restored OEP choice are of lower-to-moderate income. Under the current law, if these individuals find they made a mistake during the AEP, then they face the unsavory choice of being stuck in a MA plan that does not suit them or returning to traditional fee-for-service Medicare without the means to afford a Medicare supplement to cover their health care needs.
BACKROUND:
Prior to the passage of the Patient Protection and Affordable Care Act (ACA), beneficiaries enrolled in a Medicare Advantage (MA) plan could switch between all Medicare Advantage options or return to traditional Medicare for 90 days after the beginning of the calendar year. Known as the open-enrollment period (OEP), this open marketplace allowed beneficiaries to find the plan most appropriate for them and their medical needs. The ACA changed the OEP to an “Annual Disenrollment Period” and limited the options of beneficiaries to simply enrolling in traditional Medicare. The result has been many seniors getting stuck in plan options that don’t best fit their needs or budgets.
When the Medicare Modernization Act included the OEP for MA plans to allow seniors to “test drive” their plans each year and make sure that formularies, doctor networks and covered plan services were still sufficient for their needs. Prior to the ACA, there were two enrollment periods for most beneficiaries (with special circumstances for some beneficiaries):
- Annual Election Period (AEP) each Fall, with enrollment changes taking effect on January 1 of the following year. During this time beneficiaries could change prescription drug plans, change MA plans, return to original Medicare, or enroll in a MA plan for the first time.
- Open Enrollment Period (OEP) from January 1 to March 31. During this period beneficiaries were allowed to make one MA plan change if needed, including enrolling in a new plan, changing plans, or disenrolling from a MA plan in favor of traditional Medicare. Beneficiaries were not allowed to enroll in Part D for the first time, drop Part D or change from one Part D stand-alone drug plan to another. Coverage was then “locked-in” until the following December 31, with some exceptions.
While many beneficiaries never needed to use the open enrollment period to make a change, many did take advantage of the option and viewed it as an important back-stop and consumer protection that has since been lost. Some of the reasons why a senior might have taken advantage of the open enrollment period include:
- The beneficiary didn’t realize that plan benefits or providers have changed until after accessing medical care for the first time in the new plan year.
- The beneficiary decided that after trying a MA plan that it wasn’t right for them or they would prefer a different MA plan.
- Due to change in health status or financial status between November and March, a beneficiary could benefit financially from a switch.
- Since the AEP for Medicare is during a busy time filled with holidays and bad weather, sometimes beneficiaries need a little more time to make a thoughtful decision.
A NAHU survey about why seniors took advantage of the OEP in the past indicate that those who exercised that right felt they needed to use their plan benefits to make sure it was really the right fit – something that isn’t possible to do during the six week annual election period. Based on the same survey, another top reason why seniors took advantage of the OEP was due to additional research conducted by a family member or friend that occurred post-AEP. The survey made it clear that oftentimes a beneficiary will enroll in a plan on their own during AEP without conducting much research. Then a friend or family member will learn about the beneficiary’s decision, look into the type of plan they are in and recommend they switch to a different plan that is more appropriate for their needs.
Even though the law still allows beneficiaries annual plan changes within the AEP, the two periods are different and both are still necessary. The AEP gives enrollees the chance to investigate all of their options while still enrolled in the previous year’s plan choice. The OEP allows beneficiaries to make a final determination about their plan selection after using health care services and experiencing plan benefits firsthand. However, since only one change can be made during the OEP, it really would allow for “fine tuning” of based on coverage needs and life changes.
TALKING POINTS:
- H.R. 2581 would restore the Medicare OEP to its original time period, giving seniors the flexibility they have had in the past to choose the right plan for them.
- Many Medicare beneficiaries may choose a plan during the AEP that fits their needs but may need to change again due to a change in health status, physician availability, or other reasons. The OEP gives them that chance to choose the appropriate coverage for their needs.
- Currently, beneficiaries must dis-enroll from their MA coverage and enroll in traditional Medicare, when another MA plan may fit their needs better. H.R. 2581 would allow seniors a one-time option to choose another plan instead of being forced into a plan that may not be appropriate for their needs.
