The U.S. Capitol (Photo: Allison Bell/ALM)

House members might overcome partisan gridlock this year and pass a bill that would help older people who botch the Medicare Part B coverage signup process.

The bill calls for the Social Security Administration to send people nearing the usual Medicare eligibility age clear notices explaining what Medicare Part B coverage is, how the Medicare Part B enrollment process works, and why signing up for Medicare Part B coverage late is a bad idea.

For people who do sign up for Medicare Part B coverage late, the bill would provide faster access to coverage.

The bill also would give the secretary of the U.S. Department of Health and Human Services the ability to improve late enrollers’ access to Medicare Part B coverage, if those people live in areas affected by emergencies or disasters.

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Rep. Raul Ruiz, D-Calif., is the lead sponsor for the House version of the Beneficiary Enrollment Notification and Eligibility Simplification Act of 2019 (BENES Act of 2019) bill, H.R. 2477. The bill has 18 sponsors, including seven cosponsors who are Republicans.

The Senate companion bill, S. 1280, was introduced by Sen. Bob Casey, D-Pa. That bill has 11 cosponsors, including Sen. Susan Collins, R-Maine.

The House version of the BENES Act bill is under the jurisdiction of the House Ways and Means Committee and the House Energy and Commerce Committee. Members of the House Energy and Commerce Committee approved H.R. 2477 in July by a voice vote.

The Senate version, S. 1280, is under the jurisdiction of the Senate Finance Committee. The Senate Finance Committee has not yet taken any action on it.

Members of Congress have had a hard time passing much legislation in recent years, but they have passed some significant bipartisan bills affecting health benefits for older people.

In 2016, for example, members of Congress succeeded at passing the bipartisan 21st Century Cures Act. That act may be best known for encouraging the Medicare program to pay for telehealth services.

Why the Bill?

Medicare is a federally run program that provides medical benefits for Americans who turn 65, qualify for Social Security Disability Insurance benefits, or who suffer from severe enough kidney disease that they need a kidney transplant or are getting kidney dialysis. It covers the cost of physician services and outpatient services.

Medicare Part A covers hospitalization costs. For most enrollees, Medicare Part A coverage is free, and enrollment happens automatically.

Medicare program designers have used a “late enrollment penalty” system, or monthly premium surcharge requirement, to try to nudge consumers to start paying Medicare Part B premiums immediately after they turn 65, instead of waiting until they feel sick to pay for that coverage.

Normally, people who turn 65 must sign up for Medicare Part B coverage within a period starting three months before the month in which they turn 65 or within one month after they turn 65 to get immediate access to Medicare Part B coverage, without worrying about having to pay the late enrollment penalty, according to a Congressional Budget Office (CBO) analysis of H.R. 2477. However, they must wait one or two months before their Part B coverage kicks in.

People who fail to sign up within the seven-month enrollment window — within three months after the month in which they turn 65 — and who later decide to get covered, must wait until the Medicare general enrollment period comes around again to get covered.

The Medicare general enrollment period is separate from the Medicare Advantage program annual election period.

The Medicare Advantage program annual election program gives all Medicare enrollees a chance to sign up for Medicare Advantage plan coverage for the first time, or to switch from one Medicare Advantage plan to another.

The annual election period runs from Oct. 15 through Dec. 7.

The Medicare general election period applies only to people who failed to get traditional Medicare Part A or Part B coverage at the usual times. People who are signing up for traditional Medicare coverage late usually must do so during the general election period, which runs from Jan. 1 through March 31 each year.

Under the current rules, late enrollers who sign up for Medicare Part B coverage during a general enrollment period must wait until July 1 of that year for their Part B coverage to start, according to the CBO.

Supporters of the BENES Act bills say about 760,000 people with Medicare coverage were paying the Part B late enrollment penalty in 2018. The average late enrollment penalty increased the affected enrollee’s monthly premiums by about 28%, according to the supporters’ analysis.

What the BENES Act Bills Would Do

The current version of the bills would:

  • Change the Medicare general enrollment period to Oct. 15 through Dec. 31, from Jan. 1 through March 31.
  • Require the Social Security Administration to put clear explanations of Medicare Part B enrollment rules and related rules in the annual Social Security account statements for people ages 60 to 64.
  • Have Medicare Part B coverage for mild procrastinators — people sign up from one month to three months after the month in which they turn 65 — start on the first day of the month following the signup date, rather than one or two months later.
  • Have Medicare Part B coverage for severe procrastinators — people who must sign up during the general enrollment period — start on the first day of the month following an individual’s signup date, rather than on July 1.
  • Give the HHS secretary the authority to create special enrollment periods, and waive the usual general enrollment period signup rules for severe procrastinators, for severe procrastinators in places affected by emergencies or disasters.

The BENES Act bill sponsors say the have support from America’s Health Insurance Plans, the Better Medicare Alliance and the Blue Cross Blue Shield Association as well as from patient advocacy groups.

CBO Analysis

CBO analysts estimate the BENES Act rule changes could help about 2% of new 65-year-old Medicare enrollees get Part B coverage sooner.

The changes in ordinary enrollment rules could increase government spending by about $131 million from 2021 through 2025, and by about $447 million from 2021 through 2030, according to the CBO.

The agency declined to estimate the effects of the proposed HHS secretary special enrollment period flexibility rules on federal spending. Determining how likely an HHS secretary is to establish an emergency special enrollment period and how long that kind of emergency special enrollment period might last is difficult, according to the CBO.

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