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APPRISE
Current Medicare Coverage Click to read more about any of the topics below: Part A: Hospital Insurance Part A: Hospital Insurance You are required to pay the first $1,068 of hospital costs per benefit period (which begins when you enter a hospital or skilled nursing facility and ends when you haven’t received any further care for 60 straight days). After you pay that deductible, Medicare then pays all other costs through day 60. For extended hospital stays, there are coinsurance charges of $267 a day for days 61 through 90, and $534 a day for up to 60 additional “lifetime reserve” days. If you receive care in a skilled nursing facility following a hospitalization, you are entitled to up to 20 days each benefit period. For days 21 through 100, you will pay coinsurance of $133.50 a day. Medicare pays a lot, but beneficiaries also pay some of the costs through the various deductibles and coinsurance charges mentioned above. Many medical procedures can be extremely expensive; and even if Medicare picks up significant portions of the costs, your deductibles and coinsurance responsibilities could become quite substantial. Some or all of those expenses can be covered by other insurance. You can obtain additional coverage through (1) a Medicare supplement insurance policy, or (2) a Medicare Advantage plan. Part B: Medical Insurance Persons enrolled in Part B pay a monthly premium of $96.40 (in 2009), which for most people is deducted from their Social Security check. Under Part B, you pay the first $135 in medical costs a year; but after reaching that deductible, Medicare will pay 80% of the Medicare Part B services. You are responsible for the other 20%. For outpatient mental health care, the coinsurance is split 50%/50%. Also, you pay the cost of the first three pints of blood you receive as an outpatient, should that be necessary. Additional blood costs are divided 80%/20% (unless you or someone else donates blood to replace what you use). Part B will pay for certain medications administered in a doctor’s office (for example, cancer drugs taken as outpatient treatment). Preventive services covered by Medicare include bone mass measurement, cardiovascular screening, diabetes screening, flu shots, glaucoma tests, hepatitis B shots, prostate cancer screening, pap test and pelvic exam, a pneumococcal shot, and screening mammograms. (There is no cost for some of these services.) If you are new to Medicare, you are entitled to a “Welcome to Medicare” physical exam during your first 12 months under Part B. If you (or your spouse) are still working and you have coverage through the employer’s or union’s group health insurance policy, you do not have to enroll in Part B because the other insurance will pay for these services. However, if/when your job-related insurance is going to end, you should enroll in Part B so that you can make a smooth transition to Medicare and not have a break in your health coverage. Some retirees continue to receive help with medical costs through group health insurance they have from a former employer or union, or through a spouse’s job. Such coverage usually is cost-effective; but often, if you ever decide to leave that plan, you cannot rejoin it later. Typically, retiree coverage will be provided through a supplemental insurance policy or a managed-care plan that may resemble (but isn’t exactly like) a Medicare-contracted plan. As stated with Part A Medicare pays a lot, but beneficiaries also pay some of the costs through the various deductibles and coinsurance charges mentioned above. Many medical procedures can be extremely expensive; and even if Medicare picks up significant portions of the costs, your deductibles and coinsurance responsibilities could become quite substantial. Some or all of those expenses can be covered by other insurance. You can obtain additional coverage through (1) a Medicare supplement insurance policy, or (2) a Medicare Advantage plan. Medicare Savings Program The deepest level of support is provided through the Qualified Medicare Beneficiary (QMB) – Categorically Needy Program. Help is available to single persons with a monthly income of no more than $903 and total resources of less than $2,000. For a married couple, the income limit is $1215 a month and the asset limit is $3,000. The program provides full Medicaid health benefits, including all Medicare-covered services (and you pay no premiums, deductibles, or coinsurance), plus providing such additional assistance as eyeglass coverage and dental care. At the same income limits but at slightly higher resource limits ($4,000 for one person, $6,000 for two) is the Qualified Medicare Beneficiary (QMB) – Medicare Cost-Sharing Program. This will pay the Medicare Part A premium (if applicable), Medicare Part B premium ($96.40 a month in 2009), and all of the Part A and B deductibles and copays. For both of these QMB programs, you have to fill out a detailed application and have a face-to-face interview at the Montgomery County Office of Assistance. The Specified Low-Income Medicare Beneficiary (SLMB) program covers persons with monthly income no more than $1,083 with assets of no more than $4,000. The program pays the Medicare Part B premium of $96.40 a month. You can apply by mailing an application to the Montgomery County Office of Assistance. Qualifying monthly income for married couples is no more than $1,457; qualifying resources can be no more than $6,000. A program called Qualified Individual 1 is for persons of slightly higher incomes. Income limits for the various Medicare Savings Programs are revised every year, usually in March. Resource limits have not been changed in many years. Applications are available for these programs from the County Assistance office. Your Aging and Adult Service office, Senior Center, Apprise office or Social Security office may also have the forms. Forms are also available online. Supplement MEDIGAP Insurance When you purchase a Medigap policy from one of these companies, you will be charged a premium, usually payable monthly. As long as you pay your premium, the policy is guaranteed renewable no matter what changes might occur in your health conditions. Generally you must have Part A and Part B to buy a Medigap policy. The plans are standardized but the costs for the plans from different companies can vary and all plans usually go up as you get older. The best time to buy a Medicare supplement policy is when you first enroll in Part B, because you can select any Medigap policy sold by any company, without regard to pre-existing health conditions. Because you may develop serious health conditions as you age, you could find it very difficult to be obtain a Medigap policy later in your life. Congress established 10 standardized Medicare supplement plans in 1992 and labeled them “A” through “J”. Plan “C” covers all the deductibles and coinsurance “gaps” of Original Medicare and is the most popular supplement policy. Plans “A” and “B” offer less coverage but are also less expensive. Plans “D” through “J” provide variations in “gap” coverage that perhaps can be tailored to suit your needs. New plans labeled “K” and “L” became available beginning in 2006 and pay for 50% or 75%, respectively, of Part A and Part B deductibles and coinsurance. Before the Medicare Part D program came into existence, Plans “H,” “I” and “J” offered some degree of help with prescription drugs; but because that coverage was not as good as Part D’s coverage, no new policies of these types could be sold after Part D took effect. When you have Original Medicare with a Medigap supplement, you show the hospital or doctor your Medicare card and your insurance card when you receive service from them. They will submit their claims to Medicare, which will pay the appropriate Medicare-approved amount. Then, Medicare will forward the balance of the claim to your Medigap insurance company. Depending on which supplement plan you have purchased, the insurance company will pay its share; and if there still is a remaining balance not covered under your policy, you will be responsible for that amount. Pennsylvania law forbids medical service providers from charging more than the Medicare-approved amount. If you are charged in excess of those amounts, you are not liable. Any effort to collect such an excess charge should be reported to the Pennsylvania Department of Aging (1-717-783-8975). You are responsible for the 20% of the approved amount that Medicare does not pay. Part C / Medicare Advantage Medicare Advantage (MA) is the means by which the federal government pays private health insurance companies to provide your Part A and Part B Medicare-covered services – and often your Part D benefit as well. If you enroll in a Medicare Advantage plan, you are still in the Medicare program, but the billing arrangements for health services involve you, the service provider, and the plan’s company. No claims are forwarded to Medicare. You cannot have a Medigap and Medicare Advantage plan at the same time. Managed care is the most common way that beneficiaries receive health services under Medicare Advantage. As is typical of managed-care plans, you will make copayments for most office visits. Starting a few years ago, plans also instituted copays for the more expensive health-care services such as hospital and skilled nursing stays, outpatient surgery, and ambulance services. However, you probably will receive some services that are not covered by Medicare, such as vision care, hearing services, perhaps dental care, and fitness programs. You have an opportunity to change your MA plan during the Open Enrollment Period that begins November 15 of each year and runs through December 31. Your new plan will take effect on the next January 1. Most plans charge a monthly premium, as well as copayments for most covered services, and these costs are likely to change from year to year. You will receive an Annual Notice of Change by the end of October that will tell you what changes are to be made to your plan for the following year. If you would like to consider a different plan – from the same company or from another company – this is the time you should do so. The lowest-priced managed-care plans are Health Maintenance Organizations (HMOs). You are required to choose a primary care physician (PCP) who will coordinate your health care. If you need to see a specialist, your PCP must approve a referral for that service. (Nowadays, referrals are handled electronically and should not present a problem for you to obtain.) Your medical care will be restricted to service providers who are in that organization’s network; so if you go to doctors or hospitals outside the network, you will be responsible for all costs. You should make sure the doctors, hospitals, and specialists you are accustomed to seeing are in the network. However, the managed-care companies principally serving Montgomery County (Independence Blue Cross and Aetna) have very large networks of service providers. Higher-priced managed-care plans such as Preferred Provider Organizations (PPOs) offer more flexibility in receiving services. They often are called “choice” plans. Although they also are network-based, you can receive services out of network (but you will have to pay part of the cost when you do so). As a general rule, referrals are not required. Because in-network services will cost you less, you should check to see that the physicians and hospitals you are likely to use are in the network of the managed-care organization you select. Even though networks are geographic-based, if you travel outside of your HMO or PPO network area (generally, the five counties of southeastern Pennsylvania), you will be covered for emergencies or for urgently-needed care. Try to notify your doctor or call your plan as soon as it’s feasible for you to do so. Under rare circumstances, they may prefer that you return “home” when they believe you would receive better care here. The newer Medicare Advantage plans have been introduced too recently for experience to accumulate regarding their usefulness or effectiveness. The Private-Fee-For-Service (PFFS) plans are similar to managed-care in some ways; and although they do not rely on “networks” per se, you must be sure that the medical service providers you choose to use will accept the plan’s payment schedule. Be aware that doctors or hospitals are allowed to decide, on a case-by-case basis, whether to accept the plan’s payment terms, and thus may decline to treat you! Check with you Apprise counselor to see which companies offer Advantage plans in your county. Part D: Prescription Drug Insurance For 2009, Part D’s “standard prescription drug program” requires that you pay a monthly premium to the company you choose to provide this benefit. You also will pay the first $295 in annual drug costs; but after you meet that deductible, Medicare and you will share the cost of the next $2,405 of your prescriptions, with Medicare paying 75% and you 25%. Thus, Medicare will pay for as much as $1,803.75 of your Rx costs up to the “initial coverage limit” of $2,700. When total drug costs pass that amount, you will pay the entire cost of your plan’s medications until your total out-of-pocket prescription expenses reach $4,350. This is the cost sector known as the “coverage gap”. Beyond that point (which is a total of $6,153.75 in Rx costs), you come under Part D’s “catastrophic coverage” and Medicare will pick up the bulk of the cost of your drugs (about 95%) and you will make small copayments (about 5%). Persons with very low income and limited assets may qualify for reduced or even zero premiums, low or no deductibles, and generally minimal copays. The plans start new again January 1. You can obtain Part D insurance in ways similar to how you get additional coverage under Parts A and B. If you have a Medicare Advantage plan and also want help with the cost of your prescription medications, you must obtain your Part D coverage from your managed-care company. These are called MA-PD plans. If you have Original Medicare with a Medigap supplement, or if your MA company does not offer Part D coverage, you would purchase a so-called “free-standing” Prescription Drug Plan (PDP) from one of the 22 companies that offer this insurance for 2009. In addition to the “standard” plan described above, most MA-PD and PDP insurers also offer “enhanced” drug coverage that might reduce or eliminate the deductible and provide some help with the “coverage gap,” but you should expect to pay higher premiums for those added benefits. When you select a Medicare drug plan, consider whether the plan covers all of your prescription medications, and what will be charged for each drug. Medications that are not on a plan’s list (formulary) will not be included in the Medicare cost-sharing feature, or count toward your out-of-pocket requirement for catastrophic coverage. Therefore, study the alternative plans carefully. You do not necessarily need to enroll in a Part D insurance plan. If you have another type of drug coverage, and if it is considered “at least as good as” the Medicare program’s standard plan, you do not have to take Part D. This is called “creditable coverage” and it would include such programs as Pennsylvania’s PACE and PACENET, the Veterans Administration, and the Defense Department’s TRICARE programs. If you have prescription insurance through a retiree plan, you should be informed whether that coverage is creditable. If you now have coverage that is creditable but should ever lose it, you will not have to pay a penalty for late enrollment in Part D – as long as you pick a Medicare drug plan within 63 days of losing your previous coverage. Part D has annual open enrollment periods just as there is for Medicare-Advantage plans. It also runs from November 15 to December 31, with next year’s plan taking effect on the following January 1. You can join Part D, or change your current Part D coverage, during this period. Extra Help – Low Income Subsidy (LIS) Those with somewhat higher incomes – up to 35% above the federal poverty limit, i.e., $(14,628) a year for single persons, $(19,680) for couples – and with assets as high as $12,510 for singles ($25,010 for couples), also will not pay a monthly premium, have little or no deductible, and make low Rx copayments. Persons and couples with incomes up to 50% above the poverty level ($16245 single, $21,855 married) will receive some reduction in the monthly premium, pay a $60 annual deductible, and pay 15% coinsurance for the rest of their drugs until they reach the catastrophic threshold. They have the same asset limits as the preceding group. Income qualifications are revised every year to take account of inflation. The figures cited above apply to Part D’s low-income (or “extra help”) program as of January 1, 2010. They will be revised in March or April of 2010 and will remain in effect for the next 12 months. If you think you are eligible for Part D’s Low-Income Subsidy, submit your application to Social Security (or call 800-866-1807 to the Extra Help Center. Be sure to tell them your county number 28.) They will notify Medicare if their review of your income and assets indicates that you are qualified for “extra help” with your prescription drugs. By the way, the assets considered do not include your home or your car. Only “liquid” assets such as bank accounts, stocks and bonds, and mutual funds, are counted. (The cash value of your life insurance no longer counts as an asset). Call Social Security toll-free at 1-800-772-1213.
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