Fact Sheets

MEDICARE ANNOUNCES SPECIAL ELECTION PERIOD FOR LOW-INCOME BENEFICIARIES AND THOSE AFFECTED BY KATRINA

Today’s Action:   The Centers for Medicare & Medicaid Services (CMS) announced a demonstration program allowing certain Medicare beneficiaries to enroll in a Medicare prescription drug plan with no penalty through December 31, 2006.  The program is available for seniors and people with a disability who qualify for the extra help for their Medicare prescription drug coverage, or who live in an area affected by Hurricane Katrina.  People who qualify for extra help account for the vast majority of Medicare beneficiaries who have not yet enrolled in Medicare Part D or do not have other “creditable” coverage.

Eligible Beneficiaries

Late enrollment penalties will not be collected for certain beneficiaries who enroll in a prescription drug plan under the new Special Enrollment Period: 

1. Individuals who enroll in the low-income subsidy; and
2. Individuals who were affected by Hurricane Katrina

Individuals who apply and are approved for the low-income subsidy experience a significant change in status, in particular, they become eligible for very comprehensive drug coverage at low or no cost.   With this change in status, they have a special enrollment opportunity to enroll in a prescription drug plan anytime throughout 2006. If they do not enroll in a plan on their own, Medicare will facilitate their enrollment into a prescription drug plan with a premium below the low-income benchmark, but they will have the opportunity to change plans before December 31, 2006. 

Individuals who are affected by Hurricane Katrina will be considered eligible for this demonstration as if, at the time of the hurricane (August 2005), they resided in any of the parishes or counties declared as meeting the level of “individual assistance” by the Federal Emergency Management Agency (FEMA).  FEMA has identified the parishes and counties declared eligible for "individual assistance" as a result of Hurricane Katrina and can be found at www.fema.gov/news/disasters.fema?year=2005. 

Timing/Duration

The demonstration program is limited to beneficiaries who enroll beginning in June, 2006 through December, 2006.   As long as they stay continuously enrolled in a Part D plan, they will not be assessed a late enrollment penalty.  If they disenroll after 2006 and do not have creditable coverage for a continuous period of 63 days or more, they would then incur a late enrollment penalty when they re-enroll in a plan.