Creditable vs. Non-Creditable Coverage
Most entities that currently provide prescription drug coverage to Medicare-eligible beneficiaries must disclose whether the entity’s coverage is “creditable prescription drug coverage”. A disclosure is required whether the insurer is primary or secondary to Medicare. A description of an entity, as defined by the Centers for Medicare & Medicaid Services (CMS), can be found here.
Disclosure of whether prescription drug coverage is creditable provides Medicare-eligible beneficiaries with important information relating to their Medicare Part D enrollment. Beneficiaries who are not covered under creditable prescription drug coverage and who choose not to enroll before the end of their initial enrollment period for Medicare Part D likely will pay a higher premium on a permanent basis if they subsequently enroll in Medicare Part D.