Medicare plans and Medicare providers are constantly changing. Often these changes don’t result in adjustments to your existing coverage, so they may not require any additional action on your part. But, some changes are much more significant and can greatly impact the scope or cost of your coverage. One significant change is when you receive a Medicare Advantage Plan Reassignment Notice.
Receiving this letter means that your current Medicare Advantage (MA or Part C) plan is leaving the Medicare program. This can feel especially daunting if you’re also enrolled in Extra Help to assist with your Medicare drug coverage.
Fortunately, Medicare won’t leave you in the lurch. If you qualify for Extra Help and your Medicare Advantage plan is leaving the Medicare program, Medicare will send you a Medicare Advantage Plan Reassignment Notice, also known as a “blue notice”, well in advance.
The Medicare reassignment notice is sent to inform you that you will automatically be enrolled in a standalone Medicare Prescription Drug Plan (Medicare Part D) if you don’t join a new Medicare Advantage plan on your own by the end of December. This means that, even if you do nothing, you’ll still have drug coverage starting on Jan. 1. It won’t necessarily cover the same drugs, so you should research what prescriptions are essential before accepting your assigned plan. You’ll also have a special right to buy a Medigap policy.
It’s also important to note that your newly assigned coverage is different from an all-inclusive Medicare Advantage plan. Rather, you will have Original Medicare, and Medicare will enroll you in a separate prescription drug plan to ensure you maintain your prescription drug coverage.
These changes may not give you all the same coverage and benefits you had with your previous Medicare Advantage plan. It’s highly recommended that you review all options available to you so you can join the plan that suits your healthcare needs best.
Who Receives The MA Plan Reassignment Notice?
You’ll receive a Medicare Advantage Plan Reassignment Notice if you are both: 1) enrolled in the Extra Help program, and 2) the plan you’re currently enrolled in is leaving Medicare. Here’s what it will look like:
What is Medicare Extra Help?
Extra Help is a federal program that helps pay for out-of-pocket costs related to a Medicare prescription drug coverage plan. It is also known as the Part D Low-Income Subsidy (LIS) and it is estimated to be worth about $4,900 per year.
Applicants can qualify if their income and assets fall under certain limits. Assets include savings, investments, and real estate (other than your home). (For a more exhaustive list, read this guide from the Social Security Administration). Rates for 2020 have not been released yet. But in 2019, eligible individuals may earn no more than $18,735 annually and own no more than $14,390 in assets; for couples, it is $25,365 for income and $28,720 for assets.
To find out if you qualify for Extra Help, you will need to file an Application for Extra Help with Medicare Prescription Drug Plan Costs through the Social Security Administration. They’ll need to know the value of your income, savings, investments, and real estate (other than your home). If you are married and living together, you’ll also need to provide information about you and your spouse.
What Should You Do if You Get A Blue Notice?
Medicare Advantage Plan Reassignment Notices go out from late October to early November. The notice is three pages on blue paper (hence the name “blue notice”). It includes a list of plans for your region that have premiums at or below the low-income premium subsidy amount.
So what action should you take?
- Keep your notice. It has important information on it that you may want to refer to as you explore your options.
- Compare your new plan with the other plans available and consider the three options available to you:
- If you do nothing, you’ll revert from Medicare Advantage (Part C) to Original Medicare (Parts A and B). Medicare will enroll you in a Medicare Part D drug plan that will give you similar, but not identical, drug coverage. Make sure you compare it to your current drug formulary.
- You can join choose to remain with Original Medicare for your healthcare services and enroll in a Medicare Part D drug plan of your choosing, with a special right to get a Medigap policy.
- You can join another Medicare Advantage plan (including a plan that offers drug coverage), or a Medicare Supplement add-on plan.
If you find a plan that you prefer, you can change plans before December 31. If you choose to do this, you will automatically be disenrolled from the plan Medicare selected for you.
Plan Reassignment is An Opportunity to Get Medigap
Since your current plan is leaving Medicare, you have a guaranteed right to buy a Medicare Supplement (Medigap) policy at the lowest possible rate. This does an excellent job of paying for healthcare costs that Original Medicare doesn’t cover, and it gives you a choice of any Medicare doctor. However, it does not include drug coverage, which you would need to find separately.
If this is something you’d like to consider, be sure to act quickly. This option is only available to you for 63 days before and after your current plan coverage ends.
When Do You Need to Finalize Your Changes?
New coverage won’t go into effect until January 1st. This means that your current plan and coverage will be good through the end of the year.
If you decide you’d like to make changes to the plan that Medicare selected for you, you must make them no later than December 31. For your own sake, it’s highly recommended that you act by early December so you have time to select the plan that best fits your needs.
