Order Code RL33136
CRS Report for Congress
Received through the CRS Web
Medicare: Enrollment
in Medicare Drug Plans
Updated January 3, 2006
Jennifer O’Sullivan
Specialist in Social Legislation
Domestic Social Policy Division
Congressional Research Service ˜ The Library of Congress

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Medicare: Enrollment in Medicare Drug Plans
Summary
The Medicare Prescription Drug, Improvement, and Modernization Act of 2003
(MMA) established a new voluntary prescription drug benefit under a new Medicare
Part D. The new benefit was effective January 1, 2006. Prescription drug coverage
is provided through private prescription drug plans (PDPs) or Medicare Advantage
prescription drug (MA-PD) plans. At a minimum, these plans offer “standard
coverage” or alternative coverage with actuarially equivalent benefits. Beneficiaries
are required to enroll in one of these private plans in order to obtain coverage.

Persons first eligible for Medicare on or before January 31, 2006, have an initial
enrollment period beginning November 15, 2005, and ending May 15, 2006. If they
enrolled by December 31, 2005, their coverage began January 1, 2006. If they enroll
later in the initial enrollment period, their coverage will begin on the first day of the
first month following the month of enrollment.
In general, an individual who does not enroll during his or her initial enrollment
period will only be able to enroll during the annual open enrollment period, which
will run from November 15 to December 31 each year. Coverage will begin the
following January 1. Thus, individuals first eligible for Medicare on or before
January 31, 2006, who fail to enroll by May 15, 2006, will not be able to enroll until
the open enrollment period beginning November 15, 2006. If these individuals enroll
at that time, their coverage will begin January 1, 2007.
Medicare beneficiaries who do not enroll in a plan during their initial enrollment
period will have a delayed enrollment penalty if they enroll at a later date. However,
they will not be subject to a penalty if they have maintained “creditable” drug
coverage through another source. One source of possible creditable coverage is
retiree health coverage offered by a former employer or union.
The late enrollment penalty is 1% of the base beneficiary premium for each
uncovered month. The “base beneficiary premium” is a national figure; it may
therefore be different from the premium for the plan selected by the beneficiary.
Individuals first eligible for Medicare on or before January 31, 2006, who defer
enrollment until the November15-December 31, 2006 enrollment period would have
seven uncovered months, unless they had maintained creditable coverage. Their
penalty would therefore be 7% of the base beneficiary premium.
Special enrollment provisions apply to some low-income persons. Some
categories of low-income individuals are randomly assigned to a plan if they fail to
select a plan by a target date. They are allowed to change plans if they feel the plan
selected for them fails to meet their needs.
Some observers have suggested that the range of options posed by the new drug
benefit may prove confusing for some Medicare beneficiaries. Some have
recommended deferral of the application of the late enrollment penalty. The report
will be updated as events warrant.

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Contents
Overview . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Enrollment in Part D . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Plan Information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Initial Enrollment Period . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Annual Open Enrollment Period . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Creditable Coverage . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Considerations When Switching From
Creditable Coverage to Part D Coverage . . . . . . . . . . . . . . . . . . . . . . . . 5
Special Enrollment Periods . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
Late Enrollment Penalty . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
Calculation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
Rationale for Late Enrollment Penalty . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
Special Provisions for Low-Income Populations . . . . . . . . . . . . . . . . . . . . . . . . . . 7
Dual Eligibles . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
Other Persons Automatically Qualifying for Extra Help . . . . . . . . . . . . . . . . 8
Enrollment Data . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
Issues . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
Enrollment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
2007 Enrollment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11

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Medicare: Enrollment
in Medicare Drug Plans
Overview
The Medicare Prescription Drug, Improvement, and Modernization Act of 2003
(MMA) established a new voluntary outpatient prescription drug benefit under a new
Medicare Part D. The new benefit was effective January 1, 2006. Prescription drug
coverage is provided through private prescription drug plans (PDPs) or Medicare
Advantage prescription drug (MA-PD) plans. At a minimum, these plans offer
“standard coverage” or alternative coverage with actuarially equivalent benefits.
Beneficiaries are required to enroll in one of these private plans in order to obtain
coverage.
Persons who fail to enroll during their initial enrollment period will be subject
to a penalty if they decide to enroll in the program at a later date. However, they will
not be subject to the penalty if they have maintained “creditable” drug coverage
through another source. One source of possible creditable coverage is retiree health
coverage offered by a former employer or union.
Special enrollment provisions apply to some low-income persons.
Enrollment in Part D
All persons enrolled in Medicare Part A and/or Medicare Part B are eligible to
enroll in a prescription drug plan under Part D. Beneficiaries enrolled in the “original
Medicare” program can obtain drug coverage through a PDP. A beneficiary enrolled
in a managed care plan under the Medicare Advantage (MA) program can only obtain
drug benefits through the MA organization. If the MA enrollee wants to enroll in a
PDP, he or she must drop their MA enrollment.
Plan Information
Different PDP and MA-PD plans are available in different parts of the country.
Information on plan availability and characteristics can be obtained from a number
of sources. These include the Medicare toll-free information number (1-800-
MEDICARE) and the website [http://www.medicare.gov]. Other organizations may
also be able to provide assistance; these include State Health Insurance Assistance
Programs (SHIPs) and other local organizations.
Beneficiaries must enroll with the organization offering their selected plan.
They can enroll by mail, in person, or on the WEB.

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Beneficiaries (and persons assisting them) can find a plan meeting their needs
by going to the Medicare drug plan finder on [http://www.Medicare.gov]. An
individual using the WEB tool should have a list of all the medications the
beneficiary currently takes (together with dosage units). The plan finder will then
show the beneficiary the five plans in the area with the lowest total annual cost for
the package of drugs the individual takes. It is important to note that a plan with the
lowest premium and/or no deductible may not, in fact, be the lowest cost plan
overall. Further, the lowest cost plan for one member of a couple may not be the
lowest cost plan for that person’s spouse.
Initial Enrollment Period
In general, Medicare beneficiaries will need to enroll in a plan during their
initial enrollment period in order to avoid the delayed enrollment penalty. Persons
first eligible for Medicare on or before January 31, 2006, have an initial six-month
enrollment period beginning November 15, 2005, and ending May 15, 2006. If they
enrolled by December 31, 2005, their coverage began January 1, 2006. If they enroll
later in the initial enrollment period, their coverage will begin on the first day of the
first month following the month of enrollment.
Individuals first eligible for coverage in February 2006, have an initial
enrollment period from November 15, 2005 through May 31, 2006. Their coverage
will begin on the first day of the first month following the month of enrollment, but
no earlier than February 2006. Persons eligible for Medicare beginning March 2006
or later have an initial seven-month enrollment period beginning three months before
the month of Medicare eligibility and ending seven months later. This initial
eligibility period is the same as that applicable for Medicare Part B. Coverage for
these individuals will begin on the first day of the first month following the month
of enrollment, but no earlier than the first month they are entitled to Medicare.
Annual Open Enrollment Period
In general, an individual who does not enroll during his or her initial enrollment
period will only be able to enroll during the annual open enrollment period which
will occur from November 15-December 31 each year. Coverage will begin the
following January 1. Thus, individuals first eligible for Medicare on or before
January 31, 2006, who fail to enroll by May 15, 2006, will not be able to enroll until
the open enrollment period begins November 15, 2006. If these individuals enroll
during this annual open enrollment period, their coverage will begin January 1, 2007.
(Individuals already enrolled in Part D can change their plan enrollment during the
annual open enrollment period.)
Creditable Coverage
The law imposes a late enrollment penalty on persons who delay enrollment in
a Part D plan until after their initial enrollment period. However, there is an
exception for persons who maintain creditable coverage through some other public
or private source and then choose to enroll in Part D at a later date. Creditable

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coverage is defined as drug benefits whose actuarial value equals or exceeds that of
standard coverage.
Major sources of possible creditable coverage are the following:
! Retiree Health Plans Offered by Employers or Unions. Sponsors of
retiree plans are required to disclose whether their plan is creditable
coverage. The disclosure had to be made by November 14, 2005, to
all of their retirees, spouses, and dependants who are both eligible to
participate in the retiree health plan and who are eligible for Part
D. (Qualified retiree health plans that provide creditable coverage
are entitled to a federal subsidy for certain costs for persons who are
eligible for Part D, but instead get their coverage through the retiree
plan.)1
! Other Group Health Plans and Some Individual Health Plans. This
includes health insurance coverage provided to Medicare-eligible
persons who are active employees.
! Military Coverage Including TRICARE. TRICARE has a
comprehensive drug benefit that did not change when Part D was
implemented. Most TRICARE-Medicare eligible beneficiaries do
not need to obtain Part D coverage. The only possible exception is
for low-income persons who might benefit from the low-income
subsidy; these individuals might be able to reduce their out-of-
pocket drug costs. For persons with both Medicare and TRICARE,
Medicare will pay first.2
! Prescription Drug Plans for Veterans. Persons receiving
Department of Veterans’ Affairs health care benefits have creditable
coverage. Some of these individuals may elect to enroll in Part D.
Persons may benefit from Part D coverage if: (1) they live in or
move to a nursing home that does not let them access VA drug
benefits; (2) they live a long way from a VA facility and would
prefer to get drugs from local pharmacies; or (3) they want the
flexibility to get prescriptions filled by a non-VA pharmacy.
Individuals can enroll in both programs, and decide on a prescription
by prescription basis whether to use VA or Medicare. A single drug
prescription will only be covered by one program.3
1 However, if the employer or union contracts directly as a Part D plan or contracts with a
Part D plan to provide Part D coverage, the disclosure requirement is waived. For a
discussion of the interaction of the drug benefit and retiree coverage, see CRS Report
RL33041, Medicare Drug Benefit: Retiree Provisions, by Jennifer O’Sullivan.
2 U.S. Department of Health and Human Services, “Information Partners Can Use on
TRICARE,” New Medicare Prescription Drug Coverage, Tip Sheet,
[http://www.cms.hhs.gov/medicarereform/TRICARE.pdf], accessed Sept. 28, 2005.
3 U.S. Department of Health and Human Services, “Information Partners Can Use on
(continued...)

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! State Pharmaceutical Assistance Program (SPAP). A number of
states help the low-income elderly, and in some cases disabled,
residents with their drug costs. It is anticipated that most states will
modify their SPAPs to “wrap around” the Part D benefit.
Individuals would therefore need to be enrolled in both Part D and
the SPAP to retain their full coverage.
! Medigap. In general, Medigap plans will NOT offer creditable
coverage. Individuals have generally selected from one of 10
standardized plans; only three of these (Plans H, I, and J) offered
drug coverage. CMS has stated that Plans H and I will never meet
the definition of creditable coverage and that Plan J is unlikely to.
The law required Medigap issuers whose policies included
prescription drug coverage to send a special notice, before
November 15, 2005, to their policyholders. One part of this notice
informed policyholders whether their drug coverage was or was not
creditable coverage. Beginning January 1, 2006, insurers are no
longer able to sell Medigap policies with drug coverage. Individuals
who previously had them could renew them, provided they do not
enroll in a Part D plan.4
! Other Coverage. This includes (1) Indian Health Service Tribe or
Tribal Organization or Urban Indian Organization; (2) Program of
All Inclusive Care for the Elderly (PACE) organization; (3) cost-
based health maintenance organization (HMO) or competitive
medical plan (CMP) under Medicare; or (4) state high risk pool.
All of the entities noted above (except for PACE and cost-based HMOs and
CMPs) are required to disclose to all Part D individuals enrolled in or seeking to
enroll in the plan, whether the coverage is creditable. If the coverage is non-
creditable, the entity must: (1) include the fact that the coverage is non-creditable,
(2) note that there are limited periods during a year in which the individual may
enroll in Part D, and (3) specify that the individual may be subject to late enrollment
penalties.
The notification must be provided: (1) prior to an individual’s initial enrollment
period; (2) prior to the effective date of enrollment in the coverage and upon any
change that affects whether the coverage is creditable; (3) prior to the annual open
enrollment period; and (4) at the request of the individual.
3 (...continued)
Veterans’ Administration Benefits,” New Medicare Prescription Drug Coverage, Tip Sheet,
[http://www.cms.hhs.gov/medicarereform/VA.pdf], accessed Sept. 28, 2005.
4 For a discussion of the new Medigap requirements see CRS Report RL31223, Medicare:
Supplementary “Medigap” Coverage, by Jennifer O’Sullivan.

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Considerations When Switching From
Creditable Coverage to Part D Coverage
A beneficiary who has creditable coverage may wish to enroll in a Part D plan
after the conclusion of their initial enrollment period. Care must be taken to assure
that any noncoverage period between the two events does not exceed 63 days.
Otherwise the beneficiary could be subject to a late enrollment penalty.
For example, a retiree who is enrolled in a plan offered by their former employer
decides in July 2006 that they want to drop the employer coverage and enroll in Part
D. The individual will not be able to enroll in a Part D plan until the annual election
period (November 15-December 31). Coverage will not begin until the following
January 1. They will probably want to keep their employer coverage through the end
of 2006.
Special Enrollment Periods
In general, individuals can only enroll in Part D during their initial enrollment
period or during the annual open enrollment period. However, there are a few
exceptions. The most important exception is for persons who are dually eligible for
Medicare and full Medicaid benefits. They may have a special enrollment period at
any point during the year; during this period a dual eligible individual is allowed to
drop one plan and switch to another plan. (See discussion on low-income
populations, below.)
The following are other more limited occasions when an individual may have
a special enrollment period.
! Involuntary Loss of Creditable Coverage. The individual
involuntarily loses creditable coverage or coverage is involuntarily
reduced so that it is no longer creditable coverage. (Loss of
creditable coverage due to failure to pay required premiums is not
considered involuntary loss of coverage.)
! Inadequate Information. The individual was not adequately
informed that he or she had lost creditable coverage, never had
creditable coverage, or coverage is involuntarily reduced so that it is
no longer creditable coverage.
! Federal Error. The individual’s enrollment or non-enrollment in a
part D plan is unintentional, inadvertent, or erroneous because of
error, misrepresentation, or inaction of a federal employee or
authorized representative of the federal government.
! Disenrollment from MA-PD Plan During First Year. The individual
enrolls with a MA-PD plan upon turning 65, disenrolls during the
first year and elects coverage under traditional “fee-for-service”
Medicare.

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CRS-6
! Termination of PDP Contract. The contract is terminated by the
PDP sponsor or CMS or the plan is no longer offered in the area
where the individual resides.
! Individual Moves. The individual is no longer eligible for the PDP
because the individual moved outside of the PDP region.5
! Plan Failures. The individual demonstrates to CMS that the PDP
sponsor substantially violated a material provision of the contract
relating to the individual including failure to provide benefits on a
timely basis, failure to provide benefits in accordance with
applicable quality standards or materially misrepresenting the plans
provisions in marketing the plan to the individual.
Late Enrollment Penalty
Calculation
The late enrollment penalty (sometimes referred to as a higher premium charge)
is assessed on persons who go for 63 days or longer after the close of their initial Part
D enrollment period without creditable coverage and subsequently enroll in Part D.
The penalty is based on the number of months the individual does not have creditable
coverage. The premium that would otherwise apply is increased for each month
without creditable coverage.
The late enrollment penalty is frequently described as being equal to at least 1%
of the otherwise applicable premium for each uncovered month. The actual
calculation is somewhat more complicated. The law specifies that the penalty is the
greater of: (1) the amount CMS determines is actuarially sound for each uncovered
month; or (2) 1% of the base beneficiary premium for each uncovered month. The
“base beneficiary premium” is a national figure;6 it may therefore be different than
the premium for the plan selected by the beneficiary. For uncovered months
occurring during 2006, the 1% calculation applies, though the amount will not be
announced until late 2006. For uncovered months in 2007, the 1% calculation will
also apply unless the Secretary specifies a different amount based on available
analysis. It is possible that in future years, CMS may calculate an actuarially sound
amount (i.e., an amount better reflecting the costs associated with late enrollment)
which is higher than the 1% calculation. In that case the actuarially sound amount
would apply.
5 Note that persons who are “snowbirds” are encouraged to enroll in national PDP plans.
Persons referred to as snowbirds are generally persons who move to warmer locations in the
winter and then return home for the remainder of the year.
6 The base beneficiary premium is linked to a weighted average of plan bids for a reference
month in the preceding calendar year, as determined by CMS. The weighted average is
based on plan enrollment compared to overall Part D enrollment. For 2006, CMS will
assign equal weights to PDP sponsors and assign MA-PD plans a weight based on prior
enrollment (with new MA-PD plans assigned a zero weight).

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CRS-7
The penalty applies for as long as the individual is enrolled in Part D. The
dollar amount of the penalty is expected to increase each year.
As noted above, individuals first eligible for Medicare on or before January 31,
2006, who fail to enroll by May 15, 2006, will not be able to enroll until November
15, 2006, with coverage beginning January 1, 2007. If these individuals do not have
creditable coverage during the period, they will have seven uncovered months. Their
penalty would therefore be 7% of the base beneficiary premium. If these same
persons waited an additional year, their penalty would be 19% of the base beneficiary
premium (or possibly a higher actuarially sound amount, as determined by CMS).
Rationale for Late Enrollment Penalty
The Part D delayed enrollment penalty provision was included in MMA to
prevent adverse selection. Adverse selection occurs when only those persons who
think they need the benefit actually enroll in the program. When this happens, per
capita costs are driven up, thereby causing more persons (presumably the healthier,
and less costly, ones) to drop out of the program. Over time, as more persons drop
out, program costs become prohibitive. The intention of the penalty is to encourage
all persons who do not have creditable coverage to enroll. Those who have creditable
coverage are maintaining insurance protection and are not deferring coverage until
they will actually need it.
The Part D delayed enrollment provision was included in MMA, in part based
on the experience with Medicare Part B (the Supplementary Medical Insurance
program, which covers physicians services and other medical services). A Part B
delayed enrollment penalty provision was included in the original Medicare
legislation, which was enacted in 1965. Since most persons over 65 are enrolled in
Part B, the costs are spread over the majority of this population group. Per capita
costs are considerably less than would be the case if adverse selection had occurred.
Special Provisions for Low-Income Populations
A major focus of MMA is the enhanced coverage provided to low-income
individuals who enroll in Part D.7 Generally there is a two-step process for low-
income enrollees. First, a determination must be made that they qualify for the
assistance; and, second, they must enroll in a specific Part D plan. Special
procedures have been established to make the process easier. The procedures are
different for different categories of low-income enrollees.
7 For a discussion of the low-income benefits, see CRS Report RL32902, Medicare
Prescription Drug Benefit: Low-Income Provisions, by Jennifer O’Sullivan.

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Dual Eligibles
Dual eligibles are persons who are dually eligible for Medicare and full
Medicaid benefits. In the past, they have their drug costs paid by Medicaid.
Effective January 1, 2006, they have their prescription drug costs paid under the new
Part D. Medicaid will no longer pay for drugs which could be covered under Part D.
There were more than 6 million dual eligibles who needed to be enrolled in a
Part D plan. CMS established an auto-enrollment process which was intended to
assure there was no gap in coverage. During the first week of November 2005, CMS
began mailing notices to dual eligibles informing them about the upcoming
transition, the enrollment process, and information on the plan they would be
enrolled in if they failed to make another choice before December 31, 2005.
The auto-enrollment process was random among plans with premiums below
the low-income benchmark premium.8 There are a number of differences among
available plans. Key differences are drugs included in plan formularies and
pharmacies participating in the plan as network pharmacies. Some dual eligibles may
find that they have been auto-enrolled in a plan which may not best meet their needs.
For this reason, they will be able to change enrollment at any time with the new
coverage effective the following month. This is the only population group that has
this option. It should be noted that if an enrollee selects a plan with a premium above
the low-income benchmark, he or she will be required to pay the difference.
Other Persons Automatically Qualifying for Extra Help
A second group of low-income persons automatically qualify for assistance in
meeting Part D Medicare premium and cost-sharing requirements. These are
individuals who are currently enrolled in Medicare Savings programs [i.e., the
Qualified Medicare Beneficiary (QMB) program, the Specified Low-Income
Medicare Beneficiary (SLMB) program, and the Qualified Individual (QI-1)
program],9 or the Supplemental Security Income program. In the spring of 2005,
CMS mailed letters to these persons informing them that they would automatically
qualify for low-income subsidies.
Other low-income persons may qualify, but they will need to submit an
application. In 2005, the Social Security Administration (SSA) sent application
forms to low-income persons who it identified as possibly qualifying for extra help.
SSA makes eligibility determinations for those who fill out the applications.
8 The low-income benchmark premium is a weighted average of premiums in the area.
9 The QMB program pays Medicare Parts A and B cost-sharing charges and Medicare Part
B premiums for persons at or below 100% of the federal poverty level. The SLMB program
pays Medicare Part B premiums for persons with incomes over the QMB limit up to 120%
of poverty. The QI-1 program pays the Part B premiums for persons above the SLMB limit
up to 135% of poverty.

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CRS-9
Federal efforts are not expected to identify all persons potentially entitled to
low-income assistance. Persons who think they might qualify should file an
application with SSA or their state Medicaid office.
CMS will facilitate enrollment in Part D plans for persons identified as
qualifying for extra help. Individuals who have not selected a plan by the close of the
initial enrollment period (May 15, 2006) will be randomly enrolled in a plan with
coverage effective June 1, 2006. The facilitated enrollment process will be similar
to that for dual eligibles. Namely, persons will be randomly enrolled in plans with
premiums at or below the low-income benchmark. However, they will only be able
to switch plans once during 2006, with the new coverage effective the following
month. Subsequently they will only be able to change during the annual open
enrollment period with the coverage effective the following January.
Low-income persons who have not been identified as qualifying for low-income
assistance will not have facilitated enrollment. They will be subject to a late
enrollment penalty if they delay enrollment after their initial enrollment period.
Enrollment Data
On December 22, 2005, the Department of Health and Human Services (HHS)
released a status report on drug coverage as of December 13, 2005.10 It estimated that
more than 21 million persons would have drug coverage as of January 1, 2006. The
statistics include both those covered under Part D as well those persons who would
continue to have drug coverage through retiree plans. The following are the
preliminary numbers as reported by HHS:
! 1 million newly enrolled in stand-alone PDPs;
! 6.2 million dual eligibles to be covered under Part D (including
600,000 enrolled in MA plans);
! 4.4 million in MA plans (plus 600,000 dual eligibles);
! 5.9 million persons already qualified in retiree plans receiving a
subsidy (with an additional 600, 000 being processed); and
! 3.1 million in TRICARE and the Federal Employees Health Benefits
program (FEHB).
The numbers as reported by HHS show that the majority of persons with
coverage on January 1, 2006, had had coverage through retiree plans, government
programs, Medicaid, and/or MA plans. As of December 13, 2005, only a little more
than 1 million persons had voluntarily signed up for the new Part D.
10 Department of Health and Human Services. More Than 21 Million Medicare Beneficiaries
To Be Covered For Prescription Drugs As of January 1, 2006. Press Release, December 22,
2005.

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Issues
Enrollment
Some observers have suggested that the range of options posed by the new drug
benefit may prove confusing for some Medicare beneficiaries. They contend that
some persons may be unable to make a selection by May 15, 2006, the closing date
of the initial enrollment period. Additional concerns have been raised with the ability
of persons displaced by Hurricane Katrina to make timely enrollment decisions.
Some persons are therefore recommending deferral of the application of the late
enrollment penalty. To date the following bills have been introduced:
! H.R. 3861 (Stark et al.) and S. 1841 (Nelson, Bill et al.), the
Medicare Informed Choice Act of 2005. The bill would extend the
open enrollment period through the end of 2006 and permit one
enrollment change in 2006.
! H.R. 3940 (Price et al.), Ensure Prescription Drug Coverage Act of
2005. The bill would extend the initial enrollment period through
June 30, 2007.
! H.R. 3952 (Gingrey and Scott, David) and S. 1716 (Grassley, et al.),
Emergency Health Care Relief Act of 2005 and H.R. 3958
(Melancon), S. 1765 (Landrieu) and S. 1766(Vitter), Louisiana
Katrina Reconstruction Act. These bills would require the Secretary
to have a written plan for dealing with transition issues for dual
eligibles impacted by Hurricane Katrina.
! H.R. 4399 (Fitzpatrick and Brady), Protecting Medicare
Beneficiaries’ Informed Choice Act of 2005. The bill would extend
the 2006 enrollment period through November 14, 2005, and
provide that subsequent election periods would last for six months.
It would also suspend application of the late enrollment penalty for
any delayed enrollment occurring within two years after the initial
enrollment period.
! H.R. 4406 (Kennedy of Minnesota), Medicare Plan Enrollment
Fraud Protection Act of 2005. The bill would establish a criminal
penalty for defrauding individuals in connection with enrollment
under a PDP or MA plan.
! H.R. 4410 (Larson, et al.), Medicare Prescription Drug Flexibility
for Seniors Act of 2005. The bill would extend the initial
enrollment period through May 15, 2008, and waive penalties for
late enrollment before June 1, 2008.
! H.R. 4557 (Gerlach), Medicare Prescription Drug Late Enrollment
Penalty Repeal Act of 2005. The bill would remove the Medicare

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CRS-11
late enrollment penalty and extend the initial enrollment period for
2006 through July 15, 2006.
! S. 18, (Dayton et al.) Meeting Our Responsibility to Medicare
Beneficiaries Act of 2005, and S. 1822 (Murray and Cantwell)
Medicare HEALS Act of 2005. The bills would waive the late
enrollment penalty for individuals who enrolled prior to January 1,
2008.
! S. 1637 (Reid et al.), Katrina Emergency Relief Act of 2005. The
bill would extend the initial enrollment period for Katrina survivors
to May 15, 2007.
! S. 1798 (Corzine, et al.), Medicare Do Not Call Act. The bill would
prohibit outbound call telemarketing to individuals eligible to
receive benefits under Medicare.
! S. 1841(Nelson, Stabenow, and Harkin), the Medicare Informed
Choice Act of 2005. The bill would extend the open enrollment
period through the end of 2006 and permit a one-time change of
enrollment during the year.
2007 Enrollment
The success plans have in signing up beneficiaries in 2006 will have
implications for the availability and pricing of plans in 2007. Plans with low
enrollments may decide not to participate in 2007. Similarly, organizations offering
more than one plan in 2006 may decide to drop some plans in 2007 based on low
enrollment numbers or other considerations.
More significantly, if only persons with expected high drug costs voluntarily
enroll in 2006, this will drive up per capita spending. This could potentially result
in average 2007 premiums being higher than previously estimated. MMA’s
provision for a late enrollment penalty was intended to prevent this from occurring.
As of this writing, it is too early to speculate on the number of persons who will
enroll in the program in 2006.

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