Is SPAP Considered Creditable Coverage – Can Enrollees Use it With MA Only Plans
For Medicare beneficiaries who also qualify for a State Pharmaceutical Assistance Program (SPAP), it’s important to understand how these state-run programs fit in with Medicare coverage. This is especially important in regard to prescription drugs. One question that comes up a lot is: Is SPAP considered creditable coverage for Medicare Part D? As well as; can beneficiaries use it with a Medicare Advantage (MA-only) plan?
The answer depends on the state and the specific benefits the SPAP provides. Let’s break it down.
What Is SPAP
SPAPs are programs individual states put in place to help eligible residents; typically low- to moderate-income individuals, afford prescription medications. These programs vary widely but often help with:
- Medicare Part D premiums
- Deductibles and copays
- Costs for medications not covered under Medicare
Is SPAP Considered Creditable Coverage
Yes, in some cases. Some SPAPs are considered creditable coverage for Medicare Part D, but not all.
What Is Creditable Coverage
Creditable coverage means the plan’s prescription drug coverage is expected to pay, on average, at least as much as Medicare’s standard Part D benefit. If you have creditable coverage when first eligible for Medicare, you can delay enrolling in Part D without facing a late enrollment penalty later on.
How SPAPs May Qualify
Some SPAPs meet this standard and notify both CMS and the enrollee that their coverage is creditable. These programs can help:
- Avoid the Part D late enrollment penalty if you delay enrolling
- Have peace of mind knowing you won’t be penalized for waiting
However, not all SPAPs are creditable. Each program must notify you annually about whether your coverage is creditable, so it’s critical to keep that notice.
Can You Use SPAP With a Medicare Advantage MA-Only Plan?
Yes, but with limitations. MA only plans cover Medicare Part A and B services but do not include drug coverage (Part D). And here’s the important rule:
You cannot enroll in both an MA-only plan and a standalone Medicare Part D plan (PDP) at the same time; unless you’re in a rare type of MA plan like a Medicare Medical Savings Account (MSA) or some PFFS plans.
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Three Common Scenarios:
- You Have a Creditable SPAP + MA Only Plan
If your state’s SPAP is creditable, you may delay enrolling in Part D while using your MA only plan. SPAP may help with limited drug needs during this time without incurring the Part D penalty. - You Need Comprehensive Drug Coverage
If your SPAP is not creditable, or if you need more robust drug coverage, you should switch to a Medicare Advantage plan that includes drug coverage (MAPD). You can then use SPAP to help with cost-sharing. - Temporary or Transition Use
Some beneficiaries use SPAP temporarily (during a SEP or between Part D plan enrollments). SPAP can provide some assistance in the gap, but this depends on the program’s structure. It is important not to let creditable drug coverage lapse for a period of 63 days or more, or you will face a penalty for the lapse.
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Helpful Tips
- Check the SPAP’s creditable coverage status; this info should be provided to you in writing annually.
- Use SPAP to reduce drug costs, even if you’re enrolled in a Medicare drug plan (Part D or MAPD).
- Talk to a licensed Medicare agent or your state’s SHIP office to determine whether the SPAP coordinates well with your Medicare Advantage plan.
SPAPs offer valuable help, but understanding how they work with Medicare is essential. Some SPAPs are considered creditable coverage and can help you delay enrolling in Medicare Part D without penalty. Others are not, and relying on them alone could leave you with late enrollment penalties.
Individuals currently enrolled in a Medicare Advantage MA only plan should carefully weigh their prescription drug needs. In most cases, the safest route is to either enroll in a MAPD plan or verify that your SPAP qualifies as creditable coverage before delaying drug plan enrollment.