BENES- WHAT DOES IT MEAN FOR MEDICARE? - Marc Gull
Topics in this Blog
What is BENES 1.0?
What is BENES 2.0?
Why are these being discussed?
What are the penalties for late enrollment?
How do I avoid IRMAA premiums?
What is the next step?
What can I do?
What is BENES 1.0?
BENES stands for the Beneficiary Enrollment Notification and Eligibility Simplification Act. The BENES Act is a bipartisan bill that was sponsored by Bob Casey (D-PA) and Todd Young (R-IN). This proposed law enacts small changes to Medicare.
Advanced Notice of Medicare: BENES would require the federal government to provide advanced notice to people approaching Medicare eligibility about the Medicare enrollment rules. This notice explains that you are eligible for Medicare benefits, how to coordinate your benefits, that there are penalties for late enrollment in Medicaid Part B, and tells you how to request relief to avoid paying penalties for late enrollment. This will be mailed to you 3-6 months before you turn 65.
Special Considerations: BENES also discusses the eligibility and coordination of benefits for groups of people under special consideration such as residents of Puerto Rico, and US veterans.
Part B Coverage Gaps: The BENES Act would also eliminate coverage gaps in Medicare by mandating that Medicare Part B insurance begin coverage on the first of the month.
Part B Special Enrollment Period for Emergencies: The BENES Act would allow the federal government to create a Special Enrollment Period (SEP) for Medicare Part B for “exceptional circumstances” such as when people are not able to sign up for Medicare due to occurrences like hurricanes or other natural disasters.
Hospice: The BENES Act creates a program that inspects hospice conditions for violations based on local regulatory standards. The act also creates enforcement mechanisms to punish hospice centers in violation of the law.
Kidney Transplant Patients: BENES extends the coverage period for immunosuppressive drugs for kidney transplant patients.
What is BENES 2.0?
BENES 2.0 strips away much of BENES 1.0 and makes a few changes to what remains.
Changes to BENES 1.0: BENES 2.0 keeps the requirement that the federal government provide advanced notice but requires that the notice be delivered earlier and continually. BENES 2.0 requires that notices be sent to individuals who are 60-65.
Other Parts of BENES 1.0: The other parts of BENES 1.0 such as eliminating coverage gaps, creating special enrollment periods, monitoring hospices, and expanding coverage for immunosuppressive drugs are not included in BENES 2.0.
Why are these being discussed?
Retirement Age Changes: The Social Security full retirement age has been raised from 65 to 66. In 2027, it will be raised to 67. There have been proposals to raise the Medicare eligibility age to 66 and then 67 to match social security. These proposed changes to Medicare might confuse people about when they have to enroll. Enrolling in Medicare on time is very important because there are large penalties for late enrollment. This is why the BENES bills are being debated to warn seniors about when they need to apply.
What are the penalties for late enrollment?
Both bills have the common purpose of informing those who are Medicare-eligible about the benefits of enrollment and the penalties for late enrollment. Medicare late enrollment penalties can be very expensive as they are not one-time late fees. They are added to your monthly premiums and last for as long as you have that type of coverage, which for most people results in a lifetime penalty.
Medicaid Part A penalties: For Medicaid Part A an individual that enrolls late will have to pay a penalty for twice the number of years they did not sign up. That means if they were eligible for Part A for 3 years but did not sign up, then they will have to pay higher Part A premiums for 6 years. This penalty can be avoided if the individual meets certain conditions which allow them to sign up for Part A during the Special Enrollment Period.
Medicare Part B penalties: For Part B an individual will have to pay an extra 10% for each year they could have signed up for Part B but did not. The Part B Medicare penalty will last as long as you have a Medicare Part B plan.
If you turn 65, and you or your spouse are still working at a job with more than 20 employees and have health insurance through that job, then you can wait to sign up for Medicare Part B. Under these circumstances, you can wait to sign up for Part B Medicare and you will not have to pay a late enrollment penalty.
Medicare Part C penalties: There is no late enrollment penalty for Part C.
Medicare Part D penalties: The Part D late enrollment penalty can be avoided entirely if a person has drug coverage that’s similar in value to Part D or if they qualify for extra help. If the individual does not meet this requirement, they can be subject to a penalty of an extra 1% for each month (12% a year) if they did not join a Medicare drug plan when they first got Medicare or if they went 63 days or more without drug coverage of similar value. The Part D Medicare penalty will last as long as you have a Medicare drug plan.
Medicare Part B and Part D IRMAA: IRMAA stands for Medicare income-related monthly adjustment amount. Individuals could be required to pay a higher premium depending on their income. IRMAA is calculated based on your IRS tax return from the prior two years. This surcharge only applies to Medicare beneficiaries who have an adjusted gross income above $97,000 for an individual return and $194,000 for a joint return. If you are a Medicare beneficiary whose 2021 income was greater than $97,000 (individual return) or $194,000 (joint return) then you will have to pay a monthly premium for Medicare Parts B and D. This amount can fall between $230.80 to $560.50, depending on your income. The premium for Medicare Part D is between $12.20 to $76.40, depending on your income.
How do I avoid IRMAA premiums?
If you have received notice that you will have to pay IRMAA premiums and that does not feel correct to you then you do have the right to appeal. To appeal you need to contact the Social Security Administration and request that your initial IRMAA determination be reconsidered. You can request a reconsideration over the phone by calling 800-772-1213 or you can send your request in writing.
To successfully appeal your IRMAA determination, you will have to show that your tax return was either out of date or inaccurate.
If you have had a life-changing event you can request a lower IRMAA. Life-changing events include marriage, divorce, the death of a spouse, loss of income, and employer settlement payment. Under these circumstances you can call Social Security at 800-772-1213 and tell a representative that you would like to lower your IRMAA amount, this requires you to have an amended income tax return.
What happens next?
To become law, the BENES Act must be introduced to both the House of Representatives and the Senate, it must pass both chambers of Congress and be signed by the President of the United States to become law. The BENES 2.0 bill has only been introduced to the Senate and has not yet been voted on this term.
The BENES Act was passed by the House of Representatives in the last session. The Bill was not voted on by the Senate during the last session. The BENES Act did not become law by the end of the end of the last session so it is considered a dead bill and must be passed again.
What can you do?
There are a lot of steps that you can take to avoid Medicare late penalties. If you want to be part of a larger team that is trying to warn others about Medicare late enrollment penalties, you can try calling your local congressman or state senator and talk to them about BENES 1.0 and 2.0 so that they can be debated and voted on.
In your daily life, you can be proactive and research Medicare enrollment further so that you can enroll and avoid having to pay those large penalties. Look into what Medicare parts you want and need so that you can make a well-informed decision based on your healthcare needs. For more information, please visit https://www.medicare.gov/.
What can I do if I have more questions?
The Center for Elder Law & Justice is available to help. If you or a family member resides in Western New York, please contact us at (716) 853-3087. In addition, our free legal advice helpline can provide answers to brief legal questions to residents of New York State who are 55 or older. Call 1-844-481-0973 between 9 am and 11 am to reach an attorney directly or call and leave a message. The helpline can also be contacted via e-mail at helpline@elderjusiceny.org.
Eligibility guidelines in this post are subject to change at any time. This blog post is intended as general information only and should not be considered legal advice. You should consult with an attorney about your specific circumstances to learn more about your eligibility and options.