Health Insurance Guys: Yet another deadline?
Health Insurance Guys

Health Insurance Guys: Yet another deadline?

Tom Schrette and Alan Cash

Tom Schrette and Alan Cash

Dear Tom and Alan:

I understand the deadline to change my drug plan was last week, Pearl Harbor Day, Dec. 7.

I guess I can wait until next year! What about all the people who lost everything in the fires? Anything for them?


Tom: Yes, the Center for Medicare and Medicare Services (CMS) has declared a Special Enrollment Period (SEP) for those impacted by either the fires or by the hurricanes earlier.

In October, CMS announced an SEP for those who had gone through hurricanes Harvey, Maria, or Jose.

In the past few weeks we’ve been receiving emails from different insurers extending the Annual Enrollment Period (AEP) to Dec. 31 for the affected zip codes in Napa and Sonoma.

Al: Apart from these unusual SEPs, there are some very common exceptions to the strict Oct. 15 to Dec. 7 guidelines.

I recently had a customer from Oregon who moved here and had to change his AARP drug plan.

Even though he went from one plan to another within AARP, he had moved out of one service area into a different service area.

Since he moved to Napa in December, he has this month and the next two months to exercise his SEP and stay covered.

Of course, you have the same option if you’ve been living outside the country and move back.

Tom: Another very common SEP is losing group coverage. Again, you have two full months after the month your coverage ends.

Once in a while we run into lost coverage where the drug component is considered non-creditable.

Going all the way back to 2006, drug plans had to meet the minimum requirements of the Standard Medicare drug plan in order to be creditable.

The Medicare Modernization Act (MMA) put insurers on notice that they had to disclose each year whether or not the plan was creditable.

According to, your SEP “…lasts 2 full months after the month you lose your creditable coverage or you’re notified that your current coverage is no longer creditable, whichever is later.”

Al: Some other SEPs: COBRA runs out; Medicare terminates the plan’s contract; getting out of jail (always my favorite); losing Medicaid; moving into or out of a skilled nursing facility.

The original MMA bill establishing Medicare Part D was passed all the way back to 2003.

It went into effect January 2006 and the standard benefit plan had a $250 deductible and a “doughnut hole,” which began at $2,250 and ended at $5,100.

Since the hole will go away in 2020, according to my latest AARP magazine, it surprised me to look back and read that it was supposed to increase every year.

The projected doughnut hole for 2015 was intended to be from $4,290 to $9,711!

Instead, for 2018, the gap is from $3,750 to $5,000.

The latest wrinkle is that if an individual earns more than $133,500, he/she will pay more for Part D.

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