Only certain employer group health plans provide creditable coverage for Medicare Part B (i.e., insurance that can replace Part B).

Veterans who anticipate a future need for Medicare services or who anticipate visiting a Medicare hospital should sign up for Medicare as soon as they become eligible.

Learn more about enrolling in Medicare with VA coverage and receiving a discount.

Are VA Benefits Considered Creditable Coverage for Medicare?

Medicare Part D beneficiaries enrolled in the VA health care system are deemed to have creditable coverage. This indicates that Veterans Affairs’ drug coverage is on par with Medicare’s Part D. Since only Veterans are eligible to participate in the VA healthcare system, dependents and family members do not obtain reliable coverage under the Veteran’s enrollment.

Medicare Part B does not recognize VA healthcare as acceptable coverage. In order to qualify as creditable coverage under Medicare Part B, an individual must receive it through employment. 

In contrast to Medicare, which provides the same coverage to all participants regardless of income or military service, the Veterans Administration (VA) stratifies enrollees into priority enrollment groups depending on these variables. There is no assurance that Congress will supply the VA with enough healthcare funding in the future to treat all enrollment priority categories. As a result, some Veterans, particularly those in the lowest priority categories, may lose their VA health care benefits. This highlights the importance of supplementary sources like Medicare Part A and Medicare Part B.

Veterans can enroll in both VA and Medicare, providing them with more options and flexibility. For instance, dual-enrolled Veterans can see doctors outside the VA (under Medicare Part A or Part B) and get additional medication coverage from Part D (even if it’s not on the VA formulary) from a retail pharmacy in their area (under Medicare Part D).

What is Not Considered Creditable Coverage?

Each year, You must inform Medicare Part D-eligible individuals if their existing coverage is “creditable prescription drug coverage,” as defined by regulations issued by the Centers for Medicare & Medicaid Services (CMS). Definitions of creditable and non-creditable coverage are as follows:

• A health plan is considered to have creditable prescription drug coverage if the amount the plan anticipates paying for covered individuals’ prescription drugs next year is at least equal to or greater than the average amount that standard Medicare prescription drug coverage is anticipated to pay.
• The prescription drug coverage of a health insurance plan is not creditable if, on average, the amount the plan expects to pay for covered individuals’ prescription drugs in the coming year is less than the amount the standard Medicare prescription drug coverage is expected to pay.

Before October 15, employers must tell workers eligible for Medicare whether or not their existing prescription medication coverage plan is recognized as adequate by the federal government.

What Qualifies as Creditable Coverage?

Suppose you elect to keep your current health insurance after becoming eligible for Medicare. In that case, your plan must show that it is Medicare-creditable. Those listed below are responsible for providing this documentation:

• The Benefits of Group Health Insurance Plans
• Veterans Affairs (VA) Employee Unions
• State and municipal administrations, as well as the federal government

To avoid paying a late enrollment penalty when you finally decide to enroll in Original Medicare, you may need to provide this documentation.

At the time of your initial Medicare enrollment, the Notice of Creditable Coverage will verify coverage. Your current policy is legitimate; we’re happy to let you know. Keep the notification where you can easily find it, such as alongside your other important papers. The Medicare Annual Enrollment Period notice is mailed out every year in September, just in time for the open enrollment period.

Please keep this letter because you will need it to enroll in Medicare Part B once your Medicare Initial Enrollment Period expires. You can get a replacement copy of the notice from your benefits administrator if you lose the original.

Does GoodRx Count as Creditable Coverage?

There are gradations of coverage available through Medicare Part D. In terms of importance and value, the catastrophic coverage phase is among the best. After an annual deductible is met, the amount you pay for prescription drugs drops considerably. Specialty pharmaceuticals, such as those used to treat cancer, multiple sclerosis, and other conditions, often have huge out-of-pocket costs.

GoodRx coverage is likewise not accepted as valid. This means that registering in GoodRx or another prescription drug discount program instead of Medicare Part D will result in a late enrollment penalty if you later elect to enroll in Medicare Part D. Your monthly prescription drug premium will always include the late enrollment penalty. The penalty continues if you use Medicare Part D to pay for your prescription drugs.

There is no “either/or” choice between GoodRx and Medicare Part D. Since GoodRx is “cost-free,” it can be used whenever it makes sense. However, remember that if you choose a discount drug program rather than Medicare Part D, you will not be responsible for any Part D deductible. Until your plan’s Part D deductible, you may have to pay the full cost of your prescriptions out of pocket.

Who Provides a Letter of Creditable Coverage?

Upon cancellation of your policy, your previous insurer will issue you a certificate of creditable coverage (COCC) as proof of the cancellation. Information such as your full name, coverage start and end dates, and cancellation date are all included in the document itself. For this reason, HIPAA mandated the creation of the COCC to ensure that people who switch health insurance providers don’t go without coverage. A new employee who wants to sign up for the company’s health insurance plan must fill out such an application. Without HIPAA, consumers enrolling in new coverage may be required to wait before enrolling, which could cause their current health insurance to lapse before their new policy takes effect. However, such a void is prohibited by HIPAA regulations.

Suppose an insurance policy has covered you for at least 18 consecutive months without interruption. In that case, you are exempt from meeting a new waiting period before enrolling in a new health insurance policy under the HIPAA legislation. Some healthcare policies only offer six months of continuous coverage, while others demand 18 months. If you have a break in health insurance coverage of fewer than 60 days, you don’t have to worry about breaking the “continuous coverage” criterion; however, if the break in coverage is going to continue longer than 60 days, you should make sure to keep a short-term medical insurance plan in place.