The Consolidated Appropriations Act (CAA) and the Inflation Reduction Act (IRA) improve program benefits, clarify enrollment rules, eliminate coverage gaps, and strengthen the program for the estimated 64.5 million Americans who have Medicare health care coverage. These changes to Medicare provide important protections and strengthen the program, but navigating the changes can be complicated. To help the aging and disability networks who are fielding questions and making sure that the people they serve are aware of these changes, this blog post provides an overview of the changes that are most important for older adults and people with disabilities to be aware of. For people who need additional help, ACL’s State Health Insurance Assistance Program (SHIP) offers one-on-one assistance, counseling, and education to Medicare beneficiaries, their families, and caregivers to help them make informed decisions about their care and benefits.
CAA Medicare Provisions
The CAA revised key Medicare enrollment rules and timelines for coverage to become effective. It also extended limited eligibility to cover immunosuppressive drugs for kidney transplant patients under age 65.
Key Medicare Enrollment Rules
Most people (88%) qualify for Medicare when they celebrate their 65th birthday. The remaining 12% qualify due to disability.
Most people who qualify based on age need to enroll in Medicare when they turn 65, even if they have other health insurance. People can defer enrollment in a few situations. For example, if they (or their spouse) are still working for an employer that has 20 or more employees and have health insurance through that employer, they can wait to enroll in Medicare until they are not.
People who do not apply when they are first eligible usually have to wait until the next open enrollment period to get coverage. In addition, most will have to pay higher premiums — forever — if they enroll late.
People who receive Social Security retirement or disability benefits (or Railroad Retirement benefits) are automatically enrolled in Medicare when they become eligible, but everyone else needs to apply. Unfortunately, many people do not understand this, or mistakenly believe they qualify for delayed enrollment, and they do not enroll when they should.
This problem got worse during the COVID-19 pandemic. Because of temporary changes in Medicaid eligibility rules, people who normally would have lost Medicaid when they turned 65 instead remained enrolled in Medicaid. Many of them did not realize that they still needed to enroll in Medicare.
The CAA addressed these issues and made other changes to reduce coverage gaps by:
- Decreasing wait time for coverage to begin after enrollment. In the past, people had to wait as long as six months for coverage to start after they enrolled. Coverage now starts the first day of the month following enrollment.
- Creating new special enrollment periods (SEPs) for exceptional conditions and extending timeframes for some existing SEPs. Special enrollment periods provide an opportunity to enroll in Medicare without paying increased premiums for people who did not enroll when they turned 65 because of special circumstances. The changes to SEPs are as follows:
- Emergency or Disaster Declaration: Allows people who live in an area impacted by an emergency or disaster and who missed an enrollment period because of that emergency or disaster to make enrollment decisions up to 6 months after the emergency or disaster ends.
- Health Plan or Employer Error: Provides a six-month enrollment window for people who — on or after January 1, 2023 — missed their initial enrollment period because they received incorrect information from an employer, group health plan, or an agent or broker of a health plan. The six-month window begins when the person reports the misrepresentation/error.
- Formerly Incarcerated Individuals: Permits people who become eligible while incarcerated (as well as those who stop paying Medicare premiums while incarcerated) to enroll on their release date and up to 12 months later.
- Medicaid Coverage Loss: Gives people who became Medicare eligible during the pandemic, and who remained enrolled in Medicaid through the temporary provisions, six months to join Medicare after their Medicaid termination date. (The CAA allowed Medicaid agencies to begin redetermining eligibility on February 1, 2023, and to begin terminating coverage for people no longer eligible as early as April 1, 2023. A significant number of people who retained Medicaid eligibility during the pandemic may lose Medicaid or have their coverage changed. This includes some of the 12 million people who are dually eligible for both Medicaid and Medicare.)
- Other Exceptional Circumstances: Grants people with special circumstances that prevented them from enrolling during the initial enrollment period (IEP), general enrollment period (GEP), or other SEPs the ability to enroll for up to six months. SEPs granted under exceptional circumstances will be determined on a case-by-case basis.
Medicare Part B Immunosuppressive Drug Coverage (PBID)
The CAA grants Medicare access to people under age 65 who have end-stage renal disease (ESRD) so that they may maintain immunosuppressive drug coverage after a kidney transplant. Medicare eligibility generally ends after the 36th month following a kidney transplant. Under the CAA, patients who meet certain criteria will be able to qualify for continuous Medicare-covered immunosuppressive drugs. This benefit only covers immunosuppressive drugs and no other items or services, so individuals may need to explore other coverage options if they are not otherwise eligible for Medicare. People can enroll or disenroll at any time and participate in Medicare’s Part B cost sharing program. Those with limited income may qualify for help paying the cost through a Medicare Savings Program (MSP).
IRA Medicare Provision
The IRA provides cost savings to insulin-using Medicare beneficiaries. Beginning in January 2023, insulin cost sharing is limited to $35 per month, including covered insulin products for Medicare Part D plans. Limits on cost sharing for insulin delivered by durable medical equipment under Part B plans will begin in July 2023. The IRA also provides additional vaccination coverage at no cost ($0 copay) through the Medicare Part D program for immunizations recommended by the Advisory Committee on Immunization Practices (ACIP). In coming years, there will be a cap on out-of-pocket prescription drug costs, a drug price negotiation, and an expansion of the Extra Help program for Part D cost sharing assistance for low-income Medicare beneficiaries.