Medicare is a federal medical expense insurance program for people age 65 and older, even if one continues to work. Medicare benefits are also available to anyone regardless of age who has been entitled to Social Security disability income benefits for 2 years or who has chronic kidney disease (renal impairment).
For individuals 65 or over who still work or whose spouse work, Medicare serves as the secondary payer to the employer’s group health plan. This means the employer’s group plan is the first to pay hospital and medical expense which makes the employer’s plan the primary payer. Medicare may pay secondary benefits for Medicare-covered services in order to supplement the amount paid by the employer’s plan.
Employers who have 20 or more employees are required to offer the same health benefits, under the same conditions to employees age 65 and over and to employees’ spouses who are 65 or over that they offer to younger employees and spouses. Group coverage for employers of 20 or more employees is considered primary coverage to Medicare.
The social security administration offices across the country take applications for enrollment in Medicare and will usually forward applications to its beneficiaries at least three months prior to the initial election period, at which time you have a total of seven months (3 months before, the month of your birth date and three months after).
There are two parts to the Original Medicare program, both of which have amounts that the recipient must pay out of pocket, such as co-payments, deductibles and coinsurance, much like other medical expense plans. These out-of-pocket amounts are set each year according to formulas established by Congress. The two parts are Part A Hospital Insurance and Part B, Medical Insurance.
Let’s review both Parts A and B.
Part A: Hospital Insurance (inpatient) benefit provides inpatient care in a hospital, skilled nursing facility or home health or hospice care. Medicare requires a deductible for days 1-60 ($1,024 in 2008).
From days 61-90, you are required to pay a per day co-payment ($256 per day in 2008= $7680).
Each person who is eligible for Medicare also has a 60 day lifetime reserve for hospital coverage. This reserve can be used in instances when the individual is hospitalized for longer than 90 days. These reserve days are not renewable and the individual must pay a co-payment for each day of the lifetime reserve used ($512 per day in 2008).
The benefit period is especially important as it relates to the deductibles and coinsurance payments which are required. A benefit period begins when the person enters the hospital and ends when the person has been out of the hospital for 60 days.
Hospitalization coverage is for a semi-private room and board, general nursing and miscellaneous hospital services and supplies.
Post-hospital skilled nursing care applies if one is in a hospital for at least 3 days, enters a Medicare approved facility within 30 days after hospital discharge and meets other program requirements.
Medicare will pay up to 100 days in a skilled nursing facility during each benefit period. The first 20 days in the facility are paid in full by Medicare, while the 21st through the 100th day requires a co-payment ($128 per day in 2008). Coverage includes inpatient skilled nursing care or rehabilitation, semi-private rooms, all meals, drugs and medical supplies. NURSING HOME CARE IS GENERALLY NOT COVERED. And the coverage provided by Medicare is not meant to provide Long term care coverage.
If you are concerned about loosing your assets due to an injury or illness which requires long term care in a nursing home, please inquire about the long term care plans which may protect you.
Again, the nursing facility coverage provided by Medicare covers you only for 100 days after a 3-day patient hospital stay and such care is under the supervision of a physician.
What is meant by Skilled Nursing? It usually includes around the clock care and includes intermediate nursing care by registered nurses and nurses under a physician’s supervision.
Medicare Part A also includes Home Health care in which medically necessary intermittent skilled care, home health aid services, medical supplies, etc, are provided. Unlike the hospitalization and skilled nursing facility coverage, currently there is no limit for the number of visits in which coverage will apply. Medicare will pay 100% of approved services, but it will only pay 80% of the costs for any durable medical equipment. You pay for the coinsurance of 20%.
Hospice care coverage is also provided with a full range of pain relief and support services for terminally-ill individuals through an approved hospice facility. Medicare pays 100% of the costs for coverage for as long as a doctor approves the need for the care. The costs for outpatient drugs and inpatient respite care (providing a break to the family or friends of the terminally-ill person) are limited).
Medicare Part A covers blood which is deemed medically necessary, except for the first three pints.
Now let’s review Medicare Part B – Medical Insurance (Outpatient) coverage. Part B is considered to be medical insurance and is optional to all applicants for a monthly premium when they become entitled to Part A. It also may be purchased by persons age 65 and over who do not qualify for premium-free Part A.
Part B helps to pay for the individual’s physician’s services and other services which are not covered in Part A. Covered services are subject to both a flat annual deductible and coinsurance percentage. Part B will pay for 80% of all covered services while the individual must pay the remaining 20%.
It covers the medical expenses for physician’s services, inpatient and outpatient medical and surgical services and supplies, physical and speech therapy, diagnostic tests, durable medical equipment and other similar services. Medicare pays 80% of approved expenses minus the deductible ($135 annually in 2008) and 50% for most inpatient mentall health services.
Some doctors may not accept patients who may be on original Medicare because of the set fee paid to them by Medicare. These doctors may only charge an excess of 15% over the original Medicare fee allowed by law. And you will be fully responsible for the additional 15%.
Medicare Part B also covers Clinical Laboratory Services such as blood tests, biopsies, urinalyses and other similar tests, covering 100% of these services.
Home Health care which is medically necessary is provided consisting of intermittent skilled care, home health aide services, medical supplies, etc, but again only 80% of durable medical equipment is included.
Outpatient Hospital Treatment which is reasonable and necessary for the diagnosis or treatment of an illness or injury is covered. Medicare pays for 80% of the billed amount for the doctor and 80% of the amount for the facility minus the annual deductible.
Under the outpatient Hospital Treatment, 80% of the costs for blood are covered by Medicare, except for the first three pines which you are responsible for.
Your Medicare Part B will not cover Private duty nurses, outpatient prescription drugs and dental care, routine physical examinations, cosmetic surgery, eyeglasses and hearing aids.
Although Original Medicare may cover injectables which are not self-administered; drugs taken using durable medical equipment; injectibles for clotting factors; injectable osteoporosis drugs if related to post-menopausal osteoporosis and if you cannot self-administer the drugs; certain oral anti-cancer drugs and anti-nausea drugs, and certain drugs for home dialysis, prescription drugs are not included. And, remember, you are subject to 20% of the amount as your share of such expenses.
Now that we have discussed your inpatient hospital and medical expense, coverage, let’s review your Part D Prescription Drug coverage. The Medicare Prescription Drug, Improvement and Modernization Act of 2003 (MMA) was passed in November 2003. The act implemented a plan to add a Part D – Prescription Drug benefit to the standard Medicare coverage. Part D was effective January 1, 2006.
This coverage is provided through private prescription drug plans that contract with Medicare. To receive the benefits provided, beneficiaries must sign up with a plan offering this coverage in their area and must be enrolled in Medicare Part A or in Parts A and B. Medicaid recipients are automatically enrolled. If you do not enroll within the open enrollment upon turning 65 or upon leaving another qualified plan, you will be subject to a penalty of 1% per month until comparable coverage is secured.
This means that if Part D is not secured through a qualified plan for 36 months, your charge will continually be 36% more than it would have been should you have secured Part D when you qualified.
As a Medicare beneficiary you have a choice between stand-alone plans that offer coverage on a fee-for-service basis and integrated plans that group coverage together including PPO’s and HMO’s (known as Part C Medicare Advantage Plans).
Those who sign up for a standard prescription plan will pay a monthly premium and a deductible. Co-payments range from $0 for a one month supply of Generic Drugs; $15 for a 30 day supply of Preferred Brand Drugs to $50 for a 30 day supply of Non-preferred brand drugs to 33% for one month of Specialty Drugs until $2,510 (2008) is reached.
Once the retail limit of your prescription drugs is reached, a gap called the doughnut hole occurs in which a beneficiary is responsible for 100% of the retail prescription drug costs until an amount of $4,050 (2008) is reached.
After you have paid the $4,050 in out of pocket expenses and are out of the gap, you will receive catastrophic coverage. Catastrophic coverage will cover 95% of the prescription drug costs. The beneficiary will pay the greater of the specific amounts listed for generic and named brand drugs ($2.25 and $3.60 respectively in 2008) or 5%.
Medicare Part D prescription drug coverages and the Medicare Advantage Part C plans are provided through Private Insurers. Although the private companies are restricted by some standards set by Medicare, companies still have the freedom to personalize the plans which are offered.
Medicare stipulates that all providers must cover drugs for certain classes, but do not have to cover every drug in each class. That is why it is important to review the formularies offered by each and every insurance company as well as the optional plans offered to determine whether the prescription drugs you need may be covered as a preferred brand, a non-preferred brand or whether it is a specialty drug under the formulary of the company offering coverage. Dependent upon the plan, some generic drugs may be included through the donut hole dependent upon the plan chosen.
Now that we have discussed Medicare Parts A, B and D, let’s discuss Medicare Part C, the Medicare Advantage plan. The Medicare Modernization Act of 2003 changed the name of Part C from Medicare + Choice to Medicare Advantage.
Medicare Advantage is Medicare provided by an approved Health Maintenance Organization or Preferred Provider Organization. It’s premium cost is usually the same as that for a Part B
An HMO is organized by the physicians or hospitals which provide health care and its emphasis is on preventative care. This type of Medicare Health plan must cover all Medicare Part A and Part B health care and may provide additional benefits.
Since these additional benefits vary by the doctors who are included in the plan, the formularies which are provided as well as the additional benefits such as eye care or dental benefits, it is most imperative that you make an appointment to speak to a representatives about the plan which may best meet your needs.
In most HMO’s you can only go to doctors, specialists or hospitals on the plan’s list except in an emergency. Under your HMO, it may be usual to secure the prior approval of your primary care physician before you seek the services of any and all specialists within the plan.
The benefit to you is that your overall costs may be much lower than those within the Original Medicare plan and your premium for a Medicare Advantage plan may be the same as the premium you are paying for Medicare Part B.
Since the benefits vary by HMO plan, and vary by county, it is suggested that if you are interested in seeing what each plan provides, which doctors may be included in the plan and which prescription drugs may be provided, that you schedule an appointment with us to go over each plan’s provisions.
In some areas a Medicare Advantage Plan may be available on a local or regional area in which you pay less if you use doctors, hospitals and providers which belong to the network. This network is called a PPO or Preferred Provider Organization which may cover a larger area than an HMO. You may also use doctors, hospitals and providers outside of the network for an additional cost.
A Fee for Service Plan pays a doctor directly based upon the doctor’s fee for services made. We understand the fee for Service Plans may no longer be available by 2011 in accordance with recent legislation passed.
Although the overall costs are lower, Medicare Advantage plans still include certain deductibles, co-payments, and coinsurance fees, most of which are lower than those of the original Medicare Parts A and B. You are also required to seek the services of doctors and hospitals on your plan.
If you are concerned about your out-of pocket costs, you may considerer purchasing a Medicare Supplement or a Medigap policy through a private insurance company. These plans are designed to fill the gap in coverage attributable to Medicare’s deductibles and coinsurance requirements of the benefit periods. These plans are not administered through the federal Social Security program, as is Medicare, but instead are sold and serviced by private insurers and HMO’s.
Under the Omnibus Budget Reconciliation Act of 1990, Congress passed a law to develop a standardized model for Medicare supplement policies. This model requires Medigap plans to meet certain requirements as to participant eligibility and the benefits provided. Only some states such as MN MA and WI have their own standardized provisions.
If you wish information on the Medicare Advantage plans in your area as well as a Medicare supplement or Medigap policy, separate appointments within 48 hours of each other may be set. Speak to any one of our Accent Representatives to set up an appointment.
New rulings will be set as a result of legislation passed this year which will also prohibit an insurance agent from contacting you. If you require services, or a change, you shall have to contact your representative.
We may not make unsolicited calls to see whether your plan is working out for you or if you may require changes. For those of who have not even seen a representative after your initial policy has been sold to you, under this ruling, any Medicare changes will fall on your shoulders alone.
We suggest that you apprise your friends to stay in contact with us as well so that they may also familiarize themselves with the changes which occur each year relating to their health care.
Again, Medicare through the Center for Medicare and Medicade Services sets the standards for the benefits and costs of each plan provided annually.
We look forward to seeing you soon to go over additional changes made by Medicare in the individual plans which will be available during the Annual Election Period of November 15th to December 31st of each year. Any coverage change made during the Annual Election will be Effective January 1, 2009. If you have not yet joined a prescription drug plan, it may be added during the Annual Election.
Those who are enrolled in a plan by December 31st have from January 1st through March 31st you may switch from one Medicare advantage plan to another with similar coverage.
For instance, if you are enrolled in a drug plan you may switch to a Medicare plan with drug coverage. If enrolled in a Medicare Advantage plan that includes drug coverage, you may switch to another plan that includes drug coverage or if you have enrolled in a plan without drug coverage, you may switch to another plan without drug coverage. Enrollment into one plan causes automatic disenrollment from the previous plan, so make certain you choose the plan which is best for you.
Thank you for joining us today. Each of us will be available after the meeting to determine a time and place which may be best to go over any optional plans you may be considering.
Medigap a/k/a/ Medicare Supplement Insurance is private health insurance designed to supplement the Original Medicare plan and helps pay for some of the gaps like coinsurance and deductibles. Coverage is sold through private insurance companies and is standardized except in MA, MN and WI, states which have their own standardized plans.
DECIDE WHICH BENEFITS YOU WANT, THEN DECIDE WHICH OF THE MEDIGAP PLANS A THORUGH L MEET YOUR NEEDS. You should think about current and future health care needs when deciding which benefits you want because you may not be able to switch Medigap policies later.
What Plans assist the original Medicare cost you normally would incur?
PART A Deductible of $1,024 for days 1-60 of a hospital Stay B.C.D.E.F.G.H, I, J, K or L
PART A Coinsurance and Hospital Benefits of
$256 per day for days 61-90
$512 per day for days 91-150 (while using 60 lifetime
Reserve days. A.B.C.D.E.F.G. H, I, J, K, or L
Blood – 3 pints A.B.C.D.E.F.G. H, I, J, K, or L
Part B Deductible of $135 yearly C, E, or J
PART B Coinsurance or Copayment – generally 20% of
The Medicare approved amount after you meet the
$135 Yearly deductible plus co-payments A. B. C. D. E. F. G. H, I J. K, or L
PART B Excess Charges – The difference between the
Medicare approved amount and the limiting charge of
No more than 15% above the Medicare approved amount
For doctor’s fees and other assigned Part B services F, G, I or J
HOSPICE CARE Coinsurance or Co-Payment up to $5 for
each drug provided when getting hospice services in
your home and 5% of the Medicare approved amount
for each day of inpatient respite care (up to certain limits) K or L
SKILLED NURSING FACILITY CARE Coinsurance of up to
$128 per day for days 21-100 (Nothing for days 1-20) C, D, E, F, G, H, I, J, K or L
AT HOME RECOVERY (Medicare approved home
Health care to provide treatment for an illness or
Injury ordered by your doctor) of $0 for Medicare approved
Home health services and 100% for services not covered
By Medicare) D, G, I or J
PREVENTATIVE CARE COVERED BY MEDICARE –
Generally you pay $135 yearly Part B deductible for some
Benefits and all coinsurance A, B, C, D, E, F, G, H, I, j, K or L
PREVENTATIVE CARE NOT COVERED BY
MEDICARE E or J
FOREIGN TRAVEL EMERGENCY (Medicare
Coverage outside the U.S.)- You generally pay
All costs C, D, E, F, G, H, I or J