What’s Dual Eligible Special Needs Plans?

There’s no doubt that the world of Medicare can be confusing, especially because of all the acronyms.  In this case, these plans are very simply Medicare Advantage plans that are open to people who are eligible for both Medicare and Medicaid. In other words, these plans are for people who are dually eligible for these programs. Not everyone is eligible for both programs, of course, but for those who are, these special plans have some very valuable benefits. In this guide, we’ll look at some of the specific details of these Medicare plans.

How are Dual Eligible Special Needs Plans (DSNPs) different?

As their name implies, these plans cater to those people with special needs. There are three different kinds of Special Needs Medicare Advantage Plan:

• Dual eligible
• Chronic condition
• Institutional  care

Special Needs plans are targeted at Medicare populations that have needs that are more complex or serious than the average Medicare beneficiary. One of these complex conditions is Medicaid eligibility. Since Medicaid-eligible beneficiaries have access to enhanced benefits, and also potentially more complex needs, some insurance companies have created Medicare Advantage plans designed just for these dual-eligible people.

Dual Eligible Special Needs Plans have three areas where they differ from traditional Medicare Advantage plans:

• Their integration with state Medicaid programs
• Their benefits and enrollment options
• Their eligibility rules and restrictions

Let’s examine each of these areas in turn.

DSNPs Integrate with Medicaid

When you are eligible for both Medicare and Medicaid, you actually receive benefits from both programs. Technically, Medicare remains the primary payer of your benefits, and Medicaid becomes the secondary payer. Medicare pays first, Medicaid then pays some or all of what’s left of your responsibility. Medicaid may cover all or part of these costs while you’re in Medicare:

• Part D drug plan premiums
• Co-payments
• Co-insurance
• Deductibles
• Prescription drug costs

These are all expenses that you’ll encounter as you use your medical benefits, like when you go to the doctor or have prescriptions filled. Medicaid may pay for other costs, too, like your Part B premium (and your Part A premium if you have to pay it). These kinds of costs are covered as part of the Medicare Savings Programs (MSP). There are actually four different “programs” within the MSP:

• Qualified Medicare Beneficiary (QMB) Program
• Specified Low Income Medicare Beneficiary (SLMB) Program
• Qualifying Individual (QI) Program
• Qualified Disabled and Working (QBWI) Program

You can qualify for these savings programs based on your detailed eligibility for Medicaid. Generally, the less income and fewer assets you have, the more savings you qualify for. QMB program participants have their Part A and B premiums paid by their state.

DSNP Benefits and Options

Dual Special Needs Plans have some of the richest benefits available from Medicare Advantage plans. Two factors come into play to explain this:

• People who qualify for these plans receive coverage from both Medicare and Medicaid, so they have more coverage than the average beneficiary
• Lower-income and disabled people are considered to be at greater health risk, so their services are heavily subsidized

Besides the generous coverage of out-of-pocket costs, premiums, and deductibles, DSNPs often offer very compellingly “Extra Benefits.” Extra Benefits are benefits provided by Medicare Advantage plans that go above and beyond what Original Medicare covers. Traditional examples of extra benefits include:

• Vision
• Hearing
• Fitness/gym memberships

Dual Eligible Special Needs Plans cover these kinds of extra benefits, too. They cover even more extras, too. DSNPs often cover:

• Dental benefits
• Transportation
• Healthy foods/meals
• Over the counter benefits

DSNPs tend to have more generous benefits compared to “regular’ Medicare Advantage Plans. For instance, a DSNP generally pays more for vision exams, lenses, and frames than a traditional Medicare Advantage Plan.

DSNP Enrollment Options

Another difference between DSNPs and traditional Medicare Advantage plans is their opportunities for enrollment. With traditional plans, you’re allowed to enroll when you first become eligible for Original Medicare. You can make changes to your coverage twice per year:

• During the Medicare Annual Election Period (AEP) from October 15th to December 7th of each year
• During the Medicare Advantage Open Enrollment Period (MA-OEP) from January 1st to March 31st of each year

To make a change outside of these windows, you must qualify for a Special Election Period (SEP). You generally qualify for these by moving your permanent residence from one county or state to another.

However, if you become eligible for Medicaid, you get an immediate SEP as soon as you find out you qualify. This allows you to enroll in a DSNP. Besides this, initial, eligibility though, you have other special enrollment rights. As a dual-eligible beneficiary, you can make one change every calendar quarter between January and September of every year. There are three extra opportunities to change plans every year.

Dual Eligible Special Needs Plans Eligibility

We just mentioned becoming eligible for Medicaid. That’s a big difference between these plans and other Medicare Advantage plans. Standard Medicare Advantage plans are open to every person eligible for Medicare. But, to enroll in a DSNP, you must also be eligible for Medicaid. This is very important. To qualify for the extra savings and benefits from these plans, you must have dual coverage. In some cases, you must be “full dual” which means that you qualify for maximum Medicaid benefits.

If you lose your Medicaid eligibility, you’ll have a Special Election Period to drop your DSNP and return to a standard Medicare Advantage plan. If you don’t do this, you might have to pay back some of the Medicare premiums that your state has paid (if you were in one of the Medicare Savings Programs).

How To See If You’re Eligible For a Dual Special Needs Plan (DSNP)

The first step is to apply for Medicaid coverage. You’ll do this through your home state. Once you’re told you’re eligible for Medicaid (and your level of eligibility), you can look for a DSNP to enroll in. If you think you have any chance at qualifying for Medicaid in your state, apply for coverage. The worst that can happen is that you’ll be told you don’t qualify. But, if you do qualify, you’ll have access to much richer benefits. The best way to find a DSNP is to work with an independent insurance agent. An independent agent can help you compare benefits from multiple companies, and help you enroll in one of your choices.