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.
Important: You may have a new Medicare plan - but, you may not be in the same phase of coverage as before.
Depending on the structure (deductible or no deductible) and coverage limits 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 higher
Initial Coverage Limit? Your new plan phase will be determined based on the retail value of your medication purchases and your transferred TrOOP. For example, if your Medicare Part D plan had a $0 initial deductible and you use a Special Enrollment Period to change plans to a Medicare plan that has a
$545 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).
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."
Important: Moving from a $0 deductible plan to a drug plan with a standard deductible.
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 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.
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]
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
$545 initial deductible.
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 $545 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: the original CMS "Tip Sheet", is now offline (02/21/2016) -
"Understanding True Out-of-Pocket Costs
(TrOOP)" (Revised November 2012) - https://www.cms.gov/
Outreach-and-Education/ Outreach/ Partnerships /downloads/11223-P.pdf)
see
also https://www.cms.gov/ Outreach-and-Education/ Outreach/
Partnerships/ MMA-Outreach-Publications-Items/ CMS064126.html. However,
please see additional sources listed below for similar supporting CMS
text from Medicare Manual, Chapter 14.
Additional CMS Source for the same information - Medicare Prescription Drug Benefit Manual, Chapter 14 - Coordination of Benefits,
(Rev. 18, 09-17-18) (https://www.cms.gov/Medicare/ Prescription-Drug-Coverage/ PrescriptionDrugCovContra/ PartDManuals.html)
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." (page 36).
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 (ICL) paying only a portion - ($50) of the drug cost since the Initial
Deductible was met in
Plan A.] (https://www.cms.gov/ Medicare/
Prescription-Drug-Coverage/ PrescriptionDrugCovContra/ Downloads/
Chapter-14-Coordination-of- Benefits-v09-14-2018.pdf)
* 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 or has entered the Coverage Gap". (sources include: PDE
Manual p. 9-18, https://oig.hhs.gov/oei/reports/ oei-05-07-00610.pdf,
and 42
CFR 423.308)
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:
Q1FAQ.com/561
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).