Some Medicare beneficiaries lost prescription drug coverage at the end of 2010 because their Medicare Advantage (MA) plan or prescription drug plan (PDP) either did not renew its contract with the Centers for Medicare & Medicaid Services (CMS) or reduced the service area it served, and they did not enroll in a new plan. These beneficiaries now have until February 28, 2011 to choose a new prescription drug plan if they have not already enrolled in a PDP or an MA plan with drug coverage (MA-PD).
Medicare rules provide a special enrollment period (SEP) for individuals who are losing their MA plan or PDP because of a contract non-renewal or service area reduction for the following year. The rules give such individuals until January 31 of the year after their coverage ends to enroll in a new plan that offers prescription drug coverage.
CMS sent letters in January to beneficiaries who were:
Disenrolled from an MA plan or a PDP plan on December 31, 2010 because of a contract non-renewal or service area reduction, and
Who had not chosen a new form of drug coverage.
The letter informs them that they now have until February 28, 2011, to choose and enroll in a new drug plan. This extended SEP does not apply to people who were affected by a plan non-renewal or service area reduction and who have already chosen new drug coverage. Copies of the letter are available at: www.medicareadvocacy.org\InfoByTopic\MedicareAdvantageAndHMOs\11_02.07.NonrenewalExtensionMemo.html.
Beneficiaries who do not enroll in a new plan by February 28 will have coverage through traditional Medicare for hospital and doctor visits and other services covered under Medicare Part A and Part B, but they will not have prescription drug coverage. They will be able to enroll in a new prescription drug plan for 2012 during the fall enrollment period; however, they will have to pay a late enrollment penalty on their Part D premium because they did not have drug coverage in 2011.
See, When a Medicare Advantage Plan Does Not Renew Its Contract (November 4, 2010 ) https://www.medicareadvocacy.org/InfoByTopic/MedicareAdvantageAndHMOs/10_11.04.NonRenewal.htm.