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Using HSAs with Medicare: What Beneficiaries and Agents Need to Know

Health Savings Accounts (HSAs) are a valuable tool for people with high-deductible health plans (HDHPs), allowing them to set aside pre-tax dollars for qualified medical expenses. However, once Medicare enters the picture, the rules change. For Medicare beneficiaries and the agents who guide them, it’s important to understand how using HSAs with Medicare works. There are important changes when Medicare begins, so educating your clients help them use those funds wisely.

Can You Contribute to an HSA While on Medicare

The short answer: no.

Once someone enrolls in any part of Medicare (Part A, Part B, or both), they are no longer eligible to make contributions to an HSA. Because Medicare is not considered a high deductible health plan, The IRS prohibits contributions after Medicare enrollment.

Key timing note:

• Many people are automatically enrolled in Medicare Part A at age 65 if they are already taking Social Security benefits. This means their HSA contribution eligibility ends immediately.
• If a person delays Medicare enrollment (and Social Security benefits) while still working and covered by an employer-sponsored HDHP, they can continue contributing to their HSA until Medicare coverage begins.

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Using HSA Funds After Enrolling in Medicare

While contributions must stop, the good news is that HSA funds remain available for future use. Beneficiaries can use those dollars tax-free on a wide range of expenses, including many costs associated with Medicare.

Eligible Medicare-related expenses include:

• Medicare Part A, Part B, and Part D premiums
• Medicare Advantage (Part C) plan premiums
• Out-of-pocket costs like deductibles, copays, and coinsurance
• Dental, vision, and hearing expenses not covered by Medicare
• Prescription drugs (both covered and not covered by Medicare)

Important restriction: Beneficiaries cannot use HSA funds to pay for Medigap (Medicare Supplement) plan premiums.

Tax Benefits of Using an HSA with Medicare

• Tax-free withdrawals: As long as beneficiaries use funds for qualified medical expenses, withdrawals are tax-free.
• Penalty-free withdrawals after age 65: Even if funds are used for non-medical expenses, the 20% penalty is waived after age 65. However, the IRS taxes those withdrawals as regular income.

This flexibility makes HSAs a powerful retirement planning tool—especially for covering health costs, which typically rise with age.

Guidance for Medicare Agents

For agents advising clients, it’s helpful to remember:

1. Ask about employer coverage: If clients are still working past 65 and covered under an HDHP, delaying Medicare could allow them to continue building HSA savings.
2. Review timing carefully: Enrolling in Medicare Part A retroactively (up to 6 months) can affect HSA contribution eligibility and may trigger penalties if excess contributions are made.
3. Highlight the benefits of saved funds: Even if contributions stop, those HSA balances can play a big role in covering Medicare premiums and out-of-pocket costs.

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HSAs and Medicare don’t work together in the traditional sense; contributions must stop once Medicare begins. But the funds already in the account can provide significant financial relief for medical costs in retirement. For Medicare beneficiaries, understanding the rules ensures they maximize both their HSA and Medicare benefits. For agents, this knowledge is another way to bring clarity and value to client conversations.

SEPs for Medicare Part B Enrollment

For Medicare beneficiaries, the timing of enrollment is very important. While most people enroll in Medicare Part B during their Initial Enrollment Period (IEP) when they first become eligible, life circumstances don’t always fit neatly into those timelines. That’s where SEPs for Medicare Part B enrollment come in.

SEPs provide and opportunity for beneficiaries to sign up for Part B outside of their IEP or the GEP(General Enrollment Period), without facing late enrollment penalties, provided they meet certain conditions.

What is Medicare Part B

Medicare Part B helps cover outpatient care, doctor visits, preventive services, lab work, durable medical equipment, and more. Since it comes with a monthly premium, some people delay enrolling—especially if they’re still working and covered under an employer health plan.

When Can You Qualify for a Part B SEP

SEPs are designed to protect people who already had other coverage or experienced specific life events. Some of the most common situations include:

1. Employer or Union Coverage

• If you (or your spouse) are still working past 65 and covered by a group health plan, you can delay enrolling in Part B.
• Once that employment ends, or the employer coverage ends; you qualify for an 8-month SEP to sign up for Part B without penalty.

2. Coverage Through a Spouse

• If you’re covered under your spouse’s employer plan, the same SEP protections apply.
• This is important for individuals who retire before their spouse does, or vice versa.

3. Losing Other Creditable Coverage

• If you lose health insurance that’s considered “creditable” by Medicare standards (meaning coverage that’s at least as good as Medicare), you’ll likely qualify for an SEP.

Watch a YouTube video on Medicare enrollment periods

4. Special Circumstances (New Rules Starting in 2023)

CMS expanded SEPs to include situations such as:

• Emergency or disaster situations (declared by FEMA or other agencies).
• Employer or plan error where you were misinformed about enrollment.
• Medicaid coverage ending.
• Other exceptional conditions as determined by Medicare.

Forms you’ll need for a PArt B SEP enrollment

When enrolling in Medicare Part B during a Special Enrollment Period, most beneficiaries will need to complete two key forms:

• CMS-40B — Application for Enrollment in Medicare Part B (Medical Insurance); this is the standard enrollment form used to request Part B coverage. The beneficiary must complete this form.
• CMS-L564 — Request for Employment Information; this is the standard enrollment form beneficiaries use to request Part B coverage. It is completed by the beneficiary and their employer to verify that you had group coverage based on employment. Medicare uses it to confirm penalty free eligibility.

Please note: If your employer cannot fill out the CMS-L564, you can still submit it along with other proof of creditable coverage, such as pay stubs showing insurance deductions or health plan ID cards.

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Why SEPs Matter

Missing your enrollment period for Part B can lead to late enrollment penalties that increase your premium by 10% for each 12-month period you could have had Part B but didn’t enroll. These penalties usually last for as long as you have Medicare.

SEPs help people avoid those lifelong penalties if they had valid reasons for delaying enrollment.

Key Takeaways for Beneficiaries and Agents

• Always confirm whether an employer plan is considered creditable coverage before delaying Part B.
• Keep records of your health coverage and employment dates; Medicare often requires documentation.
• Complete both CMS-40B and CMS-L564 when applying for a Part B SEP.
• Educate clients that timing is everything. Even with an SEP, strict deadlines apply.

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Special Enrollment Periods give Medicare beneficiaries flexibility and protection when life events affect their coverage. Knowing the rules and having the right forms ready can save money, prevent penalties, and ensure continuous access to healthcare.

What Value Based Care Means

Healthcare has been shifting away from the “fee-for-service” model, and Medicare is at the center of that transformation. Traditionally, doctors and hospitals were paid based on the number of tests, procedures, or visits they provided, regardless of whether patients got healthier. What Value Based Care means is a little different. VBC rewards providers for improving patient health and keeping costs down.

The Basics of Value Based Care

Value Based Care is about quality over quantity. Instead of simply paying for services rendered, Medicare ties payments to outcomes such as:

• Better health results – like reduced hospital readmissions or better management of chronic diseases.
• Improved patient experience – including communication, accessibility, and overall satisfaction.
• Lower overall costs – through preventive care, care coordination, and reduced unnecessary treatments.

How Medicare Uses Value-Based Care

Medicare has introduced several programs and models to encourage providers to embrace VBC. Some of the key examples include:

• Accountable Care Organizations (ACOs): Groups of doctors, hospitals, and other providers who work together to give coordinated, high-quality care to Medicare patients. If they save money while meeting quality goals, they share in those savings.
• Bundled Payments for Care Improvement (BPCI): Instead of billing separately for every service, providers receive a single payment for an entire episode of care, like a hip replacement or heart surgery.
• Hospital Readmissions Reduction Program (HRRP): Hospitals receive rewards for keeping patients healthier after discharge and avoiding costly readmissions.
• Medicare Advantage Plans (MA): Many MA plans already use value-based arrangements with providers to improve preventive care and manage chronic conditions.

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Why Value-Based Care Matters

For Medicare beneficiaries, Value-Based Care means:

• More preventive services: Encouragement to get screenings, vaccines, and wellness visits.
• Better coordinated care: Doctors and specialists share information to avoid duplication and gaps.
• Healthier outcomes: The focus is on managing conditions and preventing complications, not just treating problems when they arise.

For the healthcare system overall, VBC helps reduce wasteful spending and ensures taxpayer dollars are used more effectively.

Watch a YouTube video on SEP changes for Dual, Partial Dual & LIS members

The Future of Value-Based Care

Medicare’s long-term goal is to have most of its payments tied to value instead of volume. This means more providers will be incentivized to deliver patient-centered care that is proactive, efficient, and focused on health rather than procedures.

Value-Based Care is Medicare’s way of rewarding healthcare providers for keeping patients healthier, not just for doing more. As this model continues to grow, beneficiaries can expect better care coordination, more preventive services, and a stronger focus on long-term health.

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Understanding Medicare’s SSBCI Benefits: What They Are and Who They Help

If you’re a Medicare beneficiary or a Medicare agent working with clients you may have come across the term SSBCI. It stands for Special Supplemental Benefits for the Chronically Ill; it’s part of Medicare Advantage plans (not Original Medicare). Understanding Medicare SSBCI benefits is important. These benefits are designed to help people with certain chronic health conditions live healthier, more independent lives by addressing needs that traditional Medicare doesn’t usually cover.

Let’s break down what SSBCI is, how it works, and why it’s so important.

What Are SSBCI Benefits

SSBCIs allow Medicare Advantage plans to offer non-medical supportive benefits to enrollees with serious chronic illnesses. These can include things like:

• Preloaded grocery or utility cards
• Home modifications (e.g., grab bars, ramps)
• Air purifiers or pest control
• Meal delivery
• Social or physical activity programs

The benefits come with an important rule: each benefit must show a reasonable expectation of improving, or at least maintaining, the enrollees’ health or functional status. These targeted benefits can help prevent hospital visits and keep members healthier at home.

Who Qualifies for SSBCI Benefits

To be eligible, an enrollee must meet a three-part definition of “chronically ill,” including:

1. Having one or more complex or serious chronic conditions
2. Being at high risk of hospitalization or adverse outcomes
3. Needing intensive care coordination

Eligibility standards align with what qualifies for Chronic Condition Special Needs Plans (C-SNPs), though not all plans offer SSBCIs.

How SSBCI Differs From “Regular” Medicare Advantage Benefits

Most Medicare Advantage benefits are “primarily health-related.” SSBCI benefits expand that definition to include supports that aren’t strictly medical, as long as they address a specific health condition and can reasonably be expected to improve or maintain health.

Although regular supplemental benefits might include gym memberships or dental coverage for everyone in the plan, SSBCI benefits are customized to the needs of individuals who meet specific health criteria.

Why SSBCI Benefits Matter

Holistic Support: SSBCIs target real-life challenges; nutrition, safety, social connection, that can worsen health.

Flexibility: They can be customized to meet local needs and conditions.

Preventive Benefit: Reducing real-world barriers may lower healthcare costs down the line.

Personalized Care: Plans determine how SSBCIs are structured, shaping the benefits based on member needs.

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What’s New in 2026

Stricter Rules on What Plans Can’t Offer

Starting in 2026, Medicare Advantage plans will face a tightened definition of SSBCI. CMS has codified a list of non-allowable benefits, meaning some popular extras are now prohibited under SSBCI, including:

• Junk food, unhealthy groceries
• Alcohol, tobacco, or cannabis-related items
• Life insurance or funeral benefits
• Cosmetic procedures not covered by Original Medicare
• Insurance discounts unrelated to health care
• Hospital indemnity or unrelated insurance products

Mandatory Mid-Year Notifications

Also beginning in 2026, MAOs (Medicare Advantage Organizations) must send personalized mid-year notices (between June 30 and July 31) to members who have unused supplemental benefit allowances. These notices must include:

• Which benefits the enrollee hasn’t used (from Jan 1–Jun 30)
• Eligibility criteria and limitations
• Instructions on how to access the benefits and provider networks

This ensures beneficiaries don’t miss out on benefits they’re entitled to because they weren’t aware of them.

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Other Medicare-Wide 2026 Changes (Broader Context)

While not SSBCI-specific, here are some broader 2026 updates that complement the Medicare Advantage landscape:

• Automatic Renewal of the Medicare Prescription Payment Plan (MPPP); opt-outs must be processed within three days
• Part D Out-of-Pocket Cap increasing to $2,100 (up $100 from 2025)
• Part D Deductible capped at $615 (up by $25)
• Insulin Cost Cap: Still $35 or less, whichever is lower of negotiated or maximum fair price—now effectively enforced annually
• Adult Vaccines under Part D remain free with no cost-sharing as a permanent policy

Bottom Line

SSBCIs remain a powerful innovation within Medicare Advantage pushing beyond clinical coverage to tackle the lived experiences of chronically ill beneficiaries. But in 2026, plans must tighten the focus and communicate more clearly, including:

• No more non-health-related extras under SSBCI
• Required mid-year check-ins to help enrollees use their benefits effectively

Those who rely on SSBCIs, should:

Always review your 2026 ANOC for SSBCI benefit changes. Pay close attention to mid-year notices and unused benefits. Contact a licensed Medicare agent if you have questions about your current coverage or to look at your options during AEP or other available enrollment periods.

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Are Copays and Coinsurance Different – Copays vs Coinsurance

When you’re reviewing Medicare or health insurance options with a client, one common question that comes up is; are copays and coinsurance different or are they the same. When you’re reviewing Medicare or health insurance options with a client, this can be a common point of confusion. Although both are types of cost-sharing; the portion of healthcare costs the beneficiary pays out of pocket, they work in different ways.

Let’s break it down so you can explain it simply and clearly to your clients.

What is a Copay

A copay is a fixed dollar amount a beneficiary pays for a covered service, no matter the actual cost of the service.

• Example: If a client’s plan lists a $20 copay for a primary care visit, they’ll pay $20 every time they see their doctor for a covered appointment; whether the visit costs $80 or $300.
• Common Copay Examples: Doctor visits, urgent care, prescription drugs.
• Key Point: Copays make healthcare costs predictable.

What is Coinsurance

Coinsurance is a percentage of the total cost of a covered service that the beneficiary pays.

• Example: If a plan has 20% coinsurance for outpatient surgery and the procedure costs $1,000, the client pays $200, and the insurance pays the rest.
• Common Coinsurance Examples: Hospital stays, durable medical equipment, specialist visits under certain plans.
• Key Point: Costs vary based on the service price—no set dollar amount.

How They Work Together

Some services have only a copay, some have only coinsurance, and others might have a combination. For example:

• A specialist visit might have a $40 copay.
• A hospital stay might require 20% coinsurance after the deductible.

Understanding when each applies can help clients better anticipate out-of-pocket costs.

Why It Matters for Medicare Beneficiaries

In Medicare Advantage (Part C) and Medicare Supplement (Medigap) plans, the mix of copays and coinsurance impacts:

• Affordability: Clients with frequent doctor visits may prefer fixed copays.
• Risk: Clients who may face high-cost procedures should understand coinsurance percentages.
• Budgeting: Predictable costs (copays) can make financial planning easier.

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Comparison Table

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In other words; copays are a set price you pay every time you visit a specific type of provider. While coinsurance is a percentage of the cost for a provider visit. By making sure your clients understand both, you help them avoid surprise bills and choose a plan that matches their healthcare needs and budget.

Understanding Your Medicare Plan ANOC: Why it Matters

If you have a Medicare Advantage (Part C) plan or a Medicare Part D prescription drug plan, you’ll receive an Annual Notice of Change (ANOC) every fall. While it might be tempting to toss it aside with other “Medicare mail,” Understanding your Medicare Plan ANOC is important. It explains changes to health coverage, costs, and benefits for the upcoming year.

What Is an ANOC

The ANOC is a letter both Medicare Advantage and Part D plan are required to send enrollees by September 30. It outlines any changes the plan will make for the next calendar year, starting January 1. Even if enrollees are happy with their current coverage, these changes can directly impact what they pay and the care they receive.

The ANOC will compare the current year’s benefits, costs, and coverage with what they’ll be next year, including:

• Monthly premium changes
• Copays and coinsurance updates
• Deductible adjustments
• Changes to your provider network (doctors, specialists, hospitals)
• Changes to your drug formulary (which prescriptions are covered and how much they cost)
• Any added or removed benefits like dental, vision, hearing, or fitness programs

Why Is the ANOC Important

The ANOC is an early warning system for how coverage will look in the year ahead. Ignoring it can lead to unpleasant surprises like; your doctor is no longer in-network or prescription costs have gone way up.

By reviewing the ANOC carefully, you can:

1. Spot coverage gaps. Make sure medications, providers, and benefits are still covered next year.
2. Avoid unexpected costs; premiums, copays, and deductibles can increase.
3. Compare other plan options. If you don’t like the changes, you can explore new plans during the Medicare Annual Enrollment Period (AEP), which runs from October 15 to December 7.
4. Plan ahead; knowing changes in advance allows you to budget for new costs or switch to another plan before the year starts.

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What to Do When You Get Your ANOC

1. Open it immediately. Don’t let it sit in a pile of unopened mail.
2. Review every section. Pay close attention to drug coverage, provider networks, and cost changes.
3. Make a comparison chart. List 2025 vs. 2026 benefits and costs to see differences clearly.
4. Ask questions. Call your plan or talk to a licensed Medicare agent if you need clarification.
5. Take action during AEP. If the changes aren’t favorable, you can switch to a new plan.

Bottom Line

The ANOC is more than just a piece of Medicare paperwork; it’s a guide to understanding how your plan will serve you next year. Reviewing it now could save you money, protect your access to care, and ensure you have the coverage you truly need. The best way to get the coverage you need is to speak with a licensed Medicare agent who can go over all your options.

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Medigap Plan N vs Plan G: Which Is Right for You

When shopping for a Medicare Supplement (Medigap) plan, there are many options. Plan G and Plan N are two of the most popular choices for people looking to fill in the coverage gaps of Original Medicare. While they share many similarities, there are key differences in cost, coverage, and how they handle out-of-pocket expenses. Understanding Medigap Plan N vs Plan G can help you choose the plan that best fits your healthcare needs and budget.

What Medigap Plans Have in Common

Both Plan G and Plan N are standardized Medicare Supplement plans, meaning the basic benefits are the same no matter which insurance company offers them. With either plan, you get:

• Coverage for Medicare Part A coinsurance and hospital costs (after the beneficiary uses up Medicare’s benefits) for up to 365 days
• Coverage for Part B coinsurance or copayment (with exceptions for Plan N – explained below)
• Blood coverage (first 3 pints per year)
• Part A hospice care coinsurance or copayment
• Skilled nursing facility coinsurance
• Part A deductible
• Foreign travel emergency coverage (up to plan limits)

Key Differences Between Plan G and Plan N

1. Part B Excess Charges

• Plan G: Covers 100% of Medicare Part B excess charges (extra costs you may be billed if your provider doesn’t accept Medicare’s standard payment).
• Plan N: Does not cover Part B excess charges; if your provider bills them, you’ll have to pay out of pocket.

2. Office Visit & ER Copays

• Plan G: No copays for office visits or ER (after Medicare pays its share).
• Plan N: You may pay up to $20 for some doctor visits and up to $50 for emergency room visits (waived if admitted to the hospital).

3. Monthly Premiums

• Plan G: Generally has higher monthly premiums because it covers more.
• Plan N: Often has lower monthly premiums but requires more cost-sharing through copays and the possibility of excess charges.

4. Part B Deductible

• Both plans require you to pay the annual Medicare Part B deductible before coverage kicks in (for 2025, it’s $257).

Watch our YouTube video on Medicare Advantage vs Medicare Supplements

Which Plan is The Best Fit

• Choose Plan G if:
  • You want the most comprehensive coverage available to new Medicare enrollees.
  • You prefer predictable costs and don’t want to worry about excess charges or visit copays.
  • You see specialists who may charge more than Medicare’s approved amount.
• Choose Plan N if:
  • You want a lower monthly premium and are okay with occasional copays.
  • You typically see Medicare-assigned doctors who don’t bill excess charges.
  • You’re healthy, visit doctors less often, and want to save on monthly costs.

Both Plan G and Plan N are strong options that can protect you from high out-of-pocket costs not covered by Original Medicare. The right choice depends on how often you use healthcare services, whether your providers accept Medicare’s payment terms, and how much you want to pay each month in premiums versus at the point of care.

When comparing, it’s smart to enlist the help of a licensed Medicare agent who get quotes for both plans from multiple carriers. Please note: premiums vary by carrier even though the benefits are standardized.

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Changing Medicare Supplement Plans: What to Know Before You Switch

Medicare Supplement (Medigap) plans are a great choice for covering the portion of out-of-pocket costs that Original Medicare doesn’t. However, as health needs and financial situations change, beneficiaries might consider changing Medicare supplement plans. Whether it’s to reduce premiums or adjust coverage, making a change requires some thought and planning.

Here’s what to keep in mind when considering a change to Medicare Supplement coverage.

Why People Change Medigap Plans

There are several reasons why someone might decide to change their Medigap plan:

• Overpaying for coverage: The current plan might offer more coverage than needed, meaning the policyholder may not use as much coverage as much as expected.
• Needing additional benefits: Health needs can change, and a different plan may provide better or more suitable coverage.
• Shopping for a better rate: Even if the benefits remain the same, switching to a different insurance carrier offering the same plan at a lower premium makes sense.
• Company dissatisfaction: Some beneficiaries want to change to a new insurer due to customer service or other experiences.

When You Can Switch

Changing Medigap plans isn’t quite as simple as enrolling in Medicare for the first time. There are only a few scenarios when someone can switch plans without facing potential roadblocks:

• During their six-month Medigap Open Enrollment Period: This period starts the month they turn 65 and are enrolled in Medicare Part B. During this time, they can buy any Medigap plan offered in their state or switch plans. Insurance companies cannot deny coverage based on health.
• 30 day free look period: After purchasing a new Medigap policy, you have 30 days to decide if you want to keep it. This allows beneficiaries to compare other plans with their your current plan. 
• With guaranteed issue rights: These are special protections that allow someone to buy certain Medigap plans without medical underwriting. Common situations that trigger guaranteed issue rights include losing employer coverage or moving out of a plan’s service area. However, there are currently 4 states that offer guaranteed issue rights regardless of the circumstance.

Please note: A new Medigap policy doesn’t automatically cancel the old one the way Medicare Advantage and PDP plans do. It is best not to cancel your old Medigap policy until you are sure you want to keep the new one.

Watch a YouTube video on Medicare Supplement underwriting.

Outside of the situations listed above, beneficiaries may need to go through medical underwriting to enroll in a new Medigap plan.

Understanding Medical Underwriting

Medical underwriting is a review process insurers use to assess an applicant’s health history and current conditions. Based on this review, a company can:

• Approve or deny the application.
• Charge a higher premium.
• Apply a waiting period for coverage of pre-existing conditions.

If a person applies for a Medigap plan outside their Open Enrollment Period and without guaranteed issue rights, their application could be declined based on health.

One common underwriting consideration is tobacco use. Smokers often face higher premiums, even if they are otherwise in good health.

No Waiting Period to Switch

There’s a common misconception that people have to keep their Medigap plan for a set amount of time before switching. The truth is, once someone has a Medigap policy, they can apply for a new one at any time. As long as they’re willing to go through underwriting if required.

Switching Medicare Supplement plans isn’t something to rush into, but with the right timing and a good understanding of the process, it can be a good idea for your health and finances. Whether it’s finding more appropriate coverage or simply lowering monthly costs, reviewing options regularly ensures your Medicare Supplement plan continues to meet your needs. It is best to speak with a licensed Medicare agent who can guide you through the options and find the best fit for your needs.A

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Agents helping clients navigate this process; be sure they understand the importance of timing and potential underwriting challenges. They must understand how their health status could impact their options.

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Medicare Advantage VBID Termination: What Agents Need to Know

The Centers for Medicare & Medicaid Services (CMS) announced the Medicare Advantage VBID termination. The Value-Based Insurance Design (VBID) Model will officially end after the 2025 plan year. This marks the end of a decade-long initiative aimed to innovate care delivery and cost management in Medicare Advantage. For agents, brokers, and plan sponsors, it’s important to understand what this change means and how to prepare.

A Quick Recap: What Was the VBID Model

Launched in 2017, the VBID Model was designed to test new approaches to delivering Medicare Advantage benefits. Its goal was to improve health outcomes and reduce costs. This allowed plans to tailor benefits based on chronic conditions, offer enhanced supplemental benefits, and experiment with cost-sharing structures that promoted high-value care.

Over time, the model evolved to include features like:

• Chronic Condition Special Needs Plan (C-SNP) enhancements
• Reduced or waived cost-sharing for high-value services
• Incentive programs for beneficiaries
• Expanded telehealth access
• Integration of Medicare hospice benefits (starting in 2021 as part of a separate Hospice Benefit Component pilot)

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Why Is CMS Ending the Model

Although VBID showed promise in some areas, CMS reported mixed results in measurable improvement in cost savings and health outcomes. Despite some plans reported success, the model overall did not produce consistent, scalable results that justified its continuation beyond 2025.

The separate Hospice Benefit Component, a key aspect of the VBID experiment since 2021, will also end in 2025. CMS plans to use the lessons learned from this model to inform future policy and innovation strategies.

What This Means for Agents and Beneficiaries

If you’ve worked with clients enrolled in VBID-participating Medicare Advantage plans, now is the time to start tracking changes for 2026. Although the VBID Model is ending, plans may still continue some of the supplemental and chronic condition benefits on their own; just outside of the CMS demonstration model.

Here’s what to keep in mind:

• No disruption for 2025: Plans participating in VBID will continue as usual for the rest of the plan year.
• Prepare for benefit shifts in 2026: Expect changes in cost-sharing structures, supplemental benefits, and chronic condition management tools once the model concludes.
• Watch for new CMS innovations: While VBID is ending, CMS may introduce new pilots or value-based initiatives influenced by VBID findings.

The loss or reduction in benefits makes this a great time to put your cross selling skills to the test. Find out what products you can offer clients that will provide they coverage they need.

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The sunsetting of the VBID Model is a significant development for the Medicare Advantage landscape. As an agent, staying proactive by reviewing carrier updates, analyzing plan adjustments, and educating clients about any changes will be critical. Although one model is ending, the pursuit of value-based care in Medicare is far from over.

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Stay tuned for more CMS announcements and be ready to pivot as the industry evolves.

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:

1. 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.
2. 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.
3. 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.

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