Yes. If you use a
Special Enrollment Period (SEP) to change Medicare plans during the year, you will find that both the total retail value of your drug purchases (gross covered drug costs*) and the total value of
your out-of-pocket spending (TrOOP) transfer to your new Medicare Part D
drug plan.
So, if you change Medicare plans mid-year, the money you spent in your initial deductible (total out-of-pocket spending or TrOOP) in your first Part D plan, transfers with you to your new Medicare Part D plan.
*Gross covered drug costs (GCDC) amount to the retail value of the formulary medications you purchase or "the total cost of drugs (including dispensing fee and sales tax) regardless of payer" and include "certain dispensing fees, but not including administrative costs." The beneficiary’s accumulated gross covered drug costs determine" whether the "beneficiary is in the Deductible or the Initial Coverage Phase".
As noted by the Centers for Medicare and Medicaid Services (CMS)...
Depending on the structure of your new Medicare drug plan as compared to your old plan, you may not be in the same phase of coverage when you change plans during the year.
Does your new Medicare plan have an initial deductible or deductible that excludes certain low-cost Tier-1 or Tier-2 drugs? Your new drug plan phase will be determined based on the retail value of your medication purchases and your transferred TrOOP.
Important: Moving from a $0 deductible plan to a drug plan with a standard deductible.
If your Medicare Part D plan had a $0 initial deductible and you use a Special Enrollment Period to change plans to another Medicare drug plan that has a $590 deductible, you may now be in the deductible phase of your new plan (you can read more about how your deductible is affected by previous drug purchases below).
How does this work? If you use a Special Enrollment Period to move from a Medicare Part D plan with a $0 deductible to a drug plan with an initial deductible, both what you have paid for your drugs and what your plan has paid for your drugs should count toward your new plan's initial deductible (but only your actual TrOOP from your first drug plan will transfer to your TrOOP in your new second plan).
An older (2012) Tip Sheet from the Centers for Medicare and Medicaid Services (CMS) noted:
According to this older CMS policy, the $600 retail drug value of your previous formulary drug purchases would transfer to your new plan and you would have satisfied your new $590 deductible. However, your actual out-of-pocket costs (TrOOP) would remain at $200 and you now would be in your new Medicare Part D plan's Initial Coverage phase.
Disclaimer: Unfortunately, the source of this information and quoted text: (Tip Sheet 11223 "Understanding True Out-of-Pocket Costs (TrOOP)" (Revised November 2012) ), is now offline and no longer available. (02/21/2016)
So, if you change Medicare plans mid-year, the money you spent in your initial deductible (total out-of-pocket spending or TrOOP) in your first Part D plan, transfers with you to your new Medicare Part D plan.
*Gross covered drug costs (GCDC) amount to the retail value of the formulary medications you purchase or "the total cost of drugs (including dispensing fee and sales tax) regardless of payer" and include "certain dispensing fees, but not including administrative costs." The beneficiary’s accumulated gross covered drug costs determine" whether the "beneficiary is in the Deductible or the Initial Coverage Phase".
As noted by the Centers for Medicare and Medicaid Services (CMS)...
"Drug plans keep track of their enrollees’ TrOOP [total out-f-pocket drug] costs. When a person switches plans during the year, his or her TrOOP balance transfers to the new Medicare drug plan. Medicare has established processes for transferring the TrOOP balance. This transfer begins when someone dis-enrolls and then joins a new plan, and repeats periodically after that to provide updates on late claims. If there’s a discrepancy, a person may need to give a copy of his or her most recent EOB [monthly Explanation of Benefits letter] to the new plan to show the current TrOOP balance."Note: Although you may have a new Medicare plan - you may not be in the same phase of coverage as before.
Depending on the structure of your new Medicare drug plan as compared to your old plan, you may not be in the same phase of coverage when you change plans during the year.
Does your new Medicare plan have an initial deductible or deductible that excludes certain low-cost Tier-1 or Tier-2 drugs? Your new drug plan phase will be determined based on the retail value of your medication purchases and your transferred TrOOP.
Important: Moving from a $0 deductible plan to a drug plan with a standard deductible.
If your Medicare Part D plan had a $0 initial deductible and you use a Special Enrollment Period to change plans to another Medicare drug plan that has a $590 deductible, you may now be in the deductible phase of your new plan (you can read more about how your deductible is affected by previous drug purchases below).
How does this work? If you use a Special Enrollment Period to move from a Medicare Part D plan with a $0 deductible to a drug plan with an initial deductible, both what you have paid for your drugs and what your plan has paid for your drugs should count toward your new plan's initial deductible (but only your actual TrOOP from your first drug plan will transfer to your TrOOP in your new second plan).
An older (2012) Tip Sheet from the Centers for Medicare and Medicaid Services (CMS) noted:
"[f]or example, a person switches from a plan that had no [$0] deductible, and then joins a new [drug] plan that has a deductible of $275 [the standard initial deductible back in 2008]. The coinsurance or co-payments the person paid during the initial coverage period in his or her former plan and what the plan paid will all count toward the deductible in the new plan.So, assume you are enrolled in a Medicare Part D plan with a $0 deductible and so far this year you have spent $200 purchasing medications with a retail value of $600 (your plan has paid the other $400 as their share of coverage) --- and now you move to another state and use a Special Enrollment Period to join a new Medicare Part D plan with a $590 initial deductible.
However, although what the former plan paid counts toward the new plan’s deductible, those payments won’t count toward the person’s TrOOP. But, all the TrOOP costs accumulated in the former plan will transfer to the TrOOP balance the person will start accumulating in the new plan." [emphasis and formatting added]
According to this older CMS policy, the $600 retail drug value of your previous formulary drug purchases would transfer to your new plan and you would have satisfied your new $590 deductible. However, your actual out-of-pocket costs (TrOOP) would remain at $200 and you now would be in your new Medicare Part D plan's Initial Coverage phase.
Disclaimer: Unfortunately, the source of this information and quoted text: (Tip Sheet 11223 "Understanding True Out-of-Pocket Costs (TrOOP)" (Revised November 2012) ), is now offline and no longer available. (02/21/2016)
However, the Centers for Medicare and Medicaid Services has taken this same information from the 2012 Tip Sheet and moved to the Medicare Prescription Drug Benefit Manual, Chapter 14 - Coordination of Benefits, (Rev. 18, 09-17-18)
Section 50.8 – Transferring TrOOP Balance When a Beneficiary Changes Part D Sponsors (Rev. 17, Issued: 08-23-13, Effective Date: 06-07-10, Implementation Date: 01-01-11)
"Part D rules [42 CFR §423.104(d) require sponsors to track the beneficiary’s TrOOP and correctly apply these costs to the TrOOP limit in order to provide enrollees the catastrophic level of coverage at the appropriate time. The TrOOP threshold is calculated on an annual basis and must be transferred between Part D sponsors if a beneficiary disenrolls and re-enrolls at any time before the end of a coverage year or whenever a Part D plan other than the plan of record has paid. Sponsor collection, and transfer if appropriate, of the TrOOP and gross covered drug spending balances are essential for sponsors to correctly manage the Part D benefit."Appendix C – Part D Sponsor Guidance—Automated TrOOP Balance Transfer
(Rev. 17, Issued: 08-23-13, Effective Date: 06-07-10, Implementation Date: 01-01-11)
"Part D Plan Sponsor Guidance on the Financial Information Reporting (FIR) Transactions for Transferring True Out-of-Pocket Balances." This appendix shows how the Initial Deductible, once spent will be transferred to the other Medicare Part D plan - see Scenario Four on page 81. [In Scenario Four, the beneficiary is first enrolled in Plan A, has purchased $275 in formulary drugs and has a TrOOP of $275 - thus showing that the $275 standard Initial Deductible was met. The beneficiary transfers to Plan B (that also has a standard $275 Initial Deductible) and is then in the Initial Coverage Phase paying only a portion - ($50) of the drug cost since the Initial Deductible was met in Plan A.]
For more about transferring Medicare Advantage plans during the year, please see:
"If I change Medicare Advantage plans during the year, will the amount that I have already spent out-of-pocket for Medicare Part A and Part B coverage transfer to the MOOP of my new plan?" (Spoiler Alert: Maybe.)
You can learn more about transferring Medicare plans using a Special Enrollment Periods (SEPs) in our Frequently Asked Question on this site or you may wish to contact a Medicare representative at 1-800-633-4227 and learn more about changing Medicare plans outside the annual Open Enrollment Period (October 15th through December 7th).
Sources include:
https://www.cms.gov/ Outreach-and-Education/ Outreach/ Partnerships /downloads/11223-P.pdf
https://www.cms.gov/ Outreach-and-Education/ Outreach/ Partnerships/ MMA-Outreach-Publications-Items/ CMS064126.html.
https://www.cms.gov/Medicare/ Prescription-Drug-Coverage/ PrescriptionDrugCovContra/ PartDManuals.html
https://www.cms.gov/ Medicare/ Prescription-Drug-Coverage/ PrescriptionDrugCovContra/ Downloads/ Chapter-14-Coordination-of- Benefits-v09-14-2018.pdf
PDE Manual p. 9-18, https://oig.hhs.gov/oei/reports/ oei-05-07-00610.pdf
42 CFR 423.308
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