Credible coverage is something that all Medicare Part D participants question. When it is time for those that are eligible for Medicare to sign up, there are many different considerations potential beneficiaries have to take. Not all beneficiaries are retired and still have coverage with their employer. There are some beneficiaries that are retired but covered under their spouse's medical coverage. With so many different scenarios, it takes time to decide the best course of action when it comes to Medicare Part D.
What is Creditable Coverage?
Creditable coverage simply defined is medical and prescription coverage that is as good as or better than the coverage that is provided by Medicare or a Medicare Part D plan. There are different ways that a Medicare eligible person can determine if they have creditable coverage and make a decision if they will keep their coverage or sign up for Medicare benefits.
There are some Medicare eligible beneficiaries that aren't retired. They have decided to continue working and don't have any plans on retiring for some time to come. In these cases, since retirement can't be forced, they are often still covered by insurance with their employer. Because most employer coverage is better than coverage with Medicare, it is considered creditable coverage.
For couples, if only one person is retired, they may have creditable coverage. When a spouse has employer coverage, and the Medicare eligible party is listed on that coverage, it is normally considered creditable coverage. Most couples don't take this into consideration when they don't retire at the same time. It is something that many should sit down and discuss.
With the different options that retirees have with their retirement packages, there are some people that are eligible for Medicare but choose not to take it because they still have coverage with their former employer. These people retired with their benefits as part of their retirement package. There are others that have maintained private insurance that is as good as Medicare. If a Medicare eligible person has coverage elsewhere, they may have credible coverage.
How Do I Know If I Have It?
When a person turns 65, many different things happen. They become eligible for Medicare A, B and part D. When someone has coverage, either through their employer group, their spouse's coverage or a retiree benefit package, they will receive a letter. This letter is very important because it will notify the beneficiary if the coverage they have is considered creditable coverage or not.
The notice of creditable coverage is very important. When these notices come, they serve as proof that the coverage that is carried by the beneficiary for that time period is as good as or better than Medicare's coverage. It is good for these letters to be filed away to serve as proof of coverage.
Why Is Having Proof of Coverage Important?
When a person decides they don't want to end their creditable coverage, they don't have to sign up for their Medicare part D benefits. Those that don't enroll into a Medicare part D plan when they become eligible face the risk of facing a late enrollment penalty. A late enrollment penalty will change each year and increase the cost of the Medicare part D plan when beneficiaries are finally enrolled. Having proof of prior coverage, creditable coverage, will eliminate the threat of having to pay additional monies for a Medicare part D plan.
When a person turns 65, it is a momentous occasion for many reasons. When it comes to Medicare and Medicare part D, it is a time to make serious decisions and follow through on those decisions. If a person finds their coverage with their employer is more economical, they have the right to keep it. As long as it is creditable coverage, Medicare won't penalize that decision.