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Can I be disenrolled from my Medicare prescription drug plan if I refuse to pay my Medicare Part D IRMAA?



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Question: Can I be disenrolled from my Medicare prescription drug plan if I refuse to pay my Medicare Part D IRMAA?
Category: IRMAA: Higher Incomes and Costs

Answer: Yes.  If you are a Medicare beneficiary who earns a higher income, you can be assessed an Income-Related Monthly Adjustment Amount (IRMAA) that must be paid in addition to your Medicare Part D premium (if you are enrolled in a Medicare prescription drug plan) and your Medicare Part B premium.

If you do not pay your Part D IRMAA, after a 3-month grace period, Medicare will notify your Medicare Part D plan and your Part D plan can “involuntarily" disenroll you from your Medicare plan - and you can be without prescription drug coverage for the remainder of the year unless you can use a Special Enrollment Period to join another Medicare Part D or Medicare Advantage plan.

Also, if you lose your Medicare Part D coverage, you may accumulate a permanent late-enrollment premium penalty for every month that you are without some form of creditable prescription drug coverage.

And you can still be assessed Medicare Part D IRMAA for any past, unpaid IRMAA when you were enrolled in your Medicare Part D plan.

As noted by the Centers for Medicare and Medicaid Services (CMS), "If an individual does not have or no longer has Medicare prescription drug coverage, they shouldn’t be charged the Part D-IRMAA.  However, if someone didn’t pay the Part D-IRMAA that was owed before disenrolling from their prescription drug coverage, they are responsible for the past due amount." [emphasis added]

(Source: Part D-Income Related Monthly Adjustment Amount—Frequently Asked Questions & Answers, from Anthony Culotta, Director Medicare Enrollment & Appeals Group, December 10, 2010)

A note on Medicare Advantage plans that include drug coverage:
Medicare Part D IRMAA also applies to Medicare Advantage plans that include prescription drug coverage or MAPDs.  Remember, if you are enrolled in an MAPD, you must have Medicare Part B coverage so you will be responsible for both Part B IRMAA and Part D IRMAA.  See below for the CMS reference to IRMAA and Medicare Advantage plans that include drug coverage.

As reference:
In Section 50.2.6 of Chapter 3 of the Medicare Part D Manuals, the Centers for Medicare and Medicaid Services (CMS) has noted:

"Individuals with Part D-IRMAA [Part D-Income-Related Monthly Adjustment Amount] must pay this additional [IRMAA] premium directly to the government, not to their Part D plan sponsor.  CMS has established a 3-month initial grace period before individuals who fail to pay their Part D-IRMAA will be disenrolled from their Part D plan.
...
Example: Ms. Jones must pay a Part D-IRMAA.  CMS bills Ms. Jones her monthly Part D-IRMAA amount in March, April and May.  Ms. Jones does not pay all the Part D-IRMAA amounts owed by the due date of the May bill.  CMS generates a disenrollment and sends the plan a specific TRC [Transaction Reply Code] via the daily TRR [Transaction Reply Report]. The effective date of the disenrollment will be June 1.

The Part D sponsor must send each affected individual a written notice of the disenrollment within ten (10) calendar days of receipt of the TRR indicating disenrollment for non-payment of the Part D-IRMAA.
...

Reinstatement for Good Cause – Individuals involuntarily disenrolled from their PDP for failure to pay Part D-IRMAA have the opportunity to ask CMS for reinstatement into the PDP from which they were disenrolled. CMS may reinstate enrollment, without interruption of coverage, if the individual demonstrates good cause and pays in full within three (3) calendar months of the disenrollment effective date:

• The Part D-IRMAA amounts that caused the disenrollment for nonpayment of Part D-IRMAA, and/or
• Any plan premium amounts owed at the time he or she was disenrolled. date"

(source: Section 50.2.6 – Failure to Pay a Part D-Income Related Monthly Adjustment Amount (Part D-IRMAA)), Medicare Prescription Drug Benefit Manual, Chapter 3 - Eligibility, Enrollment and Disenrollment, Updated: August 19, 2011, (Revised: November 16, 2011, August 7, 2012, August 30, 2013, August 30, 2014, July 6, 2015, September 1, 2015, September 14, 2015, December 30, 2015, May 27, 2016, August 25, 2016 & June 15, 2017))

(https://www.cms.gov/Medicare/Eligibility-and-Enrollment/MedicarePresDrugEligEnrol/Downloads/CY_2018_PDP_Enrollment_and_Disenrollment_Guidance_6-15-17.pdf)

See also the corresponding IRMAA information for Medicare Advantage plans that include drug coverage:
As noted in Section 50.2.6 – Failure to Pay a Part D-Income Related Monthly Adjustment Amount (Part D-IRMAA):

"Individuals with Part D-IRMAA must pay this additional premium directly to the government, not to their plans. CMS has established a 3-month initial grace period before individuals in an MA plan with Part D coverage (MA-PD) who fail to pay their assessed Part D-IRMAA will be disenrolled from the MA-PD plan. CMS will report the disenrollments to the organization via the daily TRR [Transaction Reply Report] using a specific Transaction Reply Code (TRC). The effective date of the disenrollment is the first of the month following the endof the initial grace period. " [emphasis added]

(source: Medicare Managed Care Manual Chapter 2 - Medicare Advantage Enrollment and Disenrollment Updated: August 19, 2011 (Revised: November 16, 2011, August 7, 2012, August 30, 2013, August 14, 2014, July 6, 2015, September 1, 2015, September 14, 2015, December 30, 2015, May 27, 2016, August 25, 2016 & June 15, 2017))

(https://www.cms.gov/Medicare/Eligibility-and-Enrollment/MedicareMangCareEligEnrol/Downloads/CY_2016_MA_Enrollment_and_Disenrollment_Guidance_12-30-2015.pdf)

(https://www.cms.gov/Medicare/Eligibility-and-Enrollment/MedicareMangCareEligEnrol/Downloads/CY_2018_MA_Enrollment_and_Disenrollment_Guidance_6-15-17.pdf)


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