What is Creditable Coverage for Medicare?
November 12, 2019 | Debby Jesser
What is Creditable Coverage for Medicare?
When talking about Creditable Coverage for Medicare it is usually referring to Prescription Drug coverage. What is meant by creditable coverage is that your previous coverage before starting a Medicare Advantage or Part D plan is expected to pay on average as much as the standard Medicare prescription drug coverage.
Why Creditable Coverage is Important?
If you are joining Medicare after turning 65, months or years after you would need credit for prior insurance coverage. If you had similar creditable coverage in the recent past, you will be able to get credit for that coverage and won’t be penalized. You typically show previous coverage in your application for Medicare. With creditable insurance you pay the normal premium for Part D ( instead of the premium plus a late enrollment penalty).
What is a Notice of Creditable Coverage?
You will often receive a notice of creditable coverage each year if you have drug coverage from an employer/union or other group health plan. The notice of creditable coverage is sent out every September and it is sent by employer/union plans. If you get this notice, it’s important to keep it (you may need it if you decide to join a Medicare drug plan in the future). If it states that the plan is not creditable please give us a call.
How is Creditable Coverage Enforced?
Creditable coverage is enforced by the Medicare Modernization Act (MMA). The Medicare Modernization Act (MMA) requires entities (whose policies include prescription drug coverage) to notify Medicare eligible policyholders whether their prescription drug coverage is creditable.
Do you have additional questions about creditable coverage? Join us at one of our Free Medicare workshops to get your Medicare related questions answered!
References:
https://www.verywellhealth.com/what-is-creditable-coverage-1738705
https://www.cms.gov/Medicare/Prescription-Drug-Coverage/CreditableCoverage/index.html
