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Medicare & Supplements

What is Medicare?

Medicare is the US Federal Government Health Insurance Program for:

  • People 65 years of age and older.
  • Some people with disabilities under age 65.
  • People with End-Stage Renal Disease (permanent kidney failure requiring dialysis or a transplant).
  • To get a Medicare Supplement or Medicare Advantage plan you must have both Medicare Part A & Part B.
  • For prescription drug coverage (Part D) you must have Medicare Part A and/or Part B.

Medicare has Four Parts:

  • Part A (Hospital Insurance)
    Most people do not have to pay for Part A.
  • Part B (Medical Insurance)
    Most people pay monthly for Part B.
  • Part C (Medicare Advantage Plans)
    Medicare Advantage plans are offered by private insurance companies as an alternative to Original Medicare; plans are government subsidized and regulated.
  • Part D (Prescription Drug Coverage)
    Part D Plans are offered by private companies to provide coverage for prescription drug costs; plans are government subsidized and regulated.

Part A (Hospital Insurance)

Helps Pay For:

Care in hospitals as an inpatient, critical access hospitals (small facilities that give limited outpatient and inpatient services to people in rural areas), skilled nursing facilities, hospice care, and some home health care.

Cost:

Most people get Part A automatically when they turn age 65. They do not have to pay a monthly payment called a premium for Part A because they or a spouse paid Medicare taxes while they were working.

If you (or your spouse) did not pay Medicare taxes while you worked and you are age 65 or older, you still may be able to buy Part A. If you are not sure you have Part A, look on your red, white, and blue Medicare card. It will show "Hospital Part A" on the lower left corner of the card. You can also call the Social Security Administration toll free at 1-800-772-1213 or call your local Social Security office for more information about buying Part A. If you get benefits from the Railroad Retirement Board, call your local RRB office or 1-800-808-0772.

Part B (Medical Insurance)

Helps Pay For:

Doctors, services, outpatient hospital care, and some other medical services that Part A does not cover, such as the services of physical and occupational therapists, and some home health care. Part B helps pay for these covered services and supplies when they are medically necessary.

Cost:

Medicare beneficiaries pay a monthly part B premium. The monthly Part B premium for 2010 is $96.40 for most with incomes under $85,000 (single) and $170,000 (married). However, the monthly Part B premium for 2010 will be $110.50 for people enrolling in Medicare for the first time in 2010. In some cases this amount may be higher if you did not choose Part B when you first became eligible at age 65. The cost of Part B may go up 10% for each 12-month period that you could have had Part B but did not sign up for it, except in special cases. You will have to pay this extra 10% for the rest of your life.

Enrolling in part B is your choice. You can sign up for Part B anytime during a 7 month period that begins 3 months before you turn 65. Visit your local Social Security office, or call the Social Security Administration at 1-800-772-1213 to sign up. If you choose to have Part B, the premium is usually taken out of your monthly Social Security, Railroad Retirement, or Civil Service Retirement payment. If you do not get any of the above payments, Medicare sends you a bill for your part B premium every 3 months. You should get your Medicare premium bill by the 10th of the month. If you do not get your bill by the 10th, call the Social Security Administration at 1-800-772-1213, or your local Social Security office. If you get benefits from the Railroad Retirement Board, call your local RRB office or 1-800-808-0772.

Part C (Medicare Advantage Plans)

People with Medicare can get their coverage through Original Medicare (the traditional fee-for-service program) or from Medicare private plans (the Medicare Advantage program also known as Medicare Part C). Depending on where you live, you may be able to enroll in a Medicare Advantage Plan offering one or more of the following types of health care: HMO, PPO, PFFS, MSA.

Original Medicare

If you choose coverage under the traditional fee-for-service Medicare program, you can generally get care from any doctor or hospital you want and receive coverage for your care anywhere in the country. However, traditional Medicare has high cost-sharing requirements and does not currently cover the costs of certain services. To help pay for uncovered benefits and to help with Medicare's cost-sharing requirements, many people in the traditional Medicare program have supplemental insurance, known as Medicare Supplements or Medigap Plans (these supplemental insurance plans fill in gaps that Medicare does not cover but unlike Medicare Part C and Part D, these plans are not part of the government Medicare program).

Medicare Advantage Plans

Medicare HMOs

Medicare HMOs cover the same doctor and hospital services as the original Medicare program, but out-of-pocket costs for these services are usually different. HMOs appeal to some people with Medicare because they may provide additional benefits, such as eyeglasses, which are not covered by the traditional Medicare program. Medicare HMOs may charge a premium that you would need to pay in addition to the Part B monthly premium.

You should be aware that Medicare HMO enrollees generally can only use doctors, hospitals, and other providers in the HMO's network. For an additional fee, some HMOs offer point-of-service (POS) benefits that partially cover care received outside the network.

If you join a Medicare HMO, you will usually have to select a primary care doctor who is responsible for deciding when you should see a specialist and which specialist you should see.

Neither Medicare nor the HMO will pay for unauthorized visits to specialists in the plan, providers outside the HMO's network, or for non-emergency care outside the HMO's service area.

Medicare PPOs

Medicare PPOs, or "Preferred Provider Organizations," are private health plans, much like Medicare HMOs. HMOs and PPOs differ in two key ways:

  1. Medicare PPOs cover some of the costs of your care if you use doctors and hospitals outside the network.
  2. Medicare PPOs generally do not require that you see a primary care physician before going to a specialist.

Regional PPOs became available under Medicare in 2006. These plans are similar to local Medicare PPOs, but serve a larger geographic area (either a single state or multi-state area) and must offer the same premiums, benefits, and cost-sharing requirements to all beneficiaries in the region. Regional Medicare PPOs offer all Medicare benefits, including the prescription drug benefit, but unlike traditional Medicare, these plans have a single deductible for hospital and physician services and an annual out-of-pocket limit on cost sharing for benefits covered under Parts A and B of Medicare. Keep in mind that the out-of-pocket limit will vary depending on the plan you select. As with local PPOs, individuals who sign up for a regional PPO will typically pay more if they go to providers outside of the network.

Private Fee-for-Service (PFFS) Plans

Private fee-for-service plans cover Medicare benefits like doctor and hospital services, much like Medicare HMOs and PPOs. Unlike Medicare HMOs and PPOs, private fee-for-service plans do not have a formal network of doctors and hospitals. Still, not all doctors and hospitals are willing to treat members of a private fee-for-service plan. If considering enrolling in a private fee-for-service plan, make sure your doctor and hospital are willing to accept the private fee-for-service plan’s payments for services before you enroll. Also, be sure you understand a plan’s benefits and cost sharing requirements before you enroll because private fee-for-service plans decide how much enrollees pay for Medicare-covered services and may charge higher cost sharing for certain health care services than the original Medicare program. While private fee-for-service plans are not required to offer the Medicare drug benefit, most do. If you enroll in a private fee-for-service plans without drug coverage, you can also enroll in a Medicare stand-alone prescription drug plan for your drug coverage.

Medicare MSA Plans

A Medicare MSA Plan is a health insurance policy with a high deductible coupled with a Medical Savings Account (MSA). Medicare pays the premium for the Medicare MSA Plan and makes a deposit to the Medicare MSA that you establish. You use the money deposited in your Medicare MSA to pay for medical expenses. If you don't use all the money in your Medicare MSA, next year's deposit will be added to your balance. Money can be withdrawn from a Medicare MSA for non-medical expenses, but that money will be taxed. If you enroll in a Medicare MSA, you must stay in it for a full year.

Special Needs Plans (SNPs)

Special needs plans are private plans that provide Medicare benefits, including drug coverage for beneficiaries with special needs. These include people who are eligible for both Medicare and Medicaid, those living in certain long-term care facilities (like a nursing home), and those with severe chronic or disabling conditions.

For additional information about Medicare Advantage plans, call 1-800-MEDICARE, or get information about Medicare options in your area on the Medicare Personal Plan Finder website, http://www.medicare.gov/MPPF/home.asp.

Medicare Advantage and Prescription Drugs

All companies offering Medicare Advantage plans must offer prescription drug coverage in at least one of their plans. Medicare Advantage plans with drug coverage may vary in their premiums, deductibles, formularies and cost-sharing, depending on the type of Medicare Advantage plan you select.

 

 

What is Medicare Part D (Prescription Drug Coverage)?

We've put this section together to help answer some of your questions, but feel free to contact us with your questions.

Medicare Part D is the federal government's prescription drug program that covers both brand-name and generic prescription drugs at participating pharmacies in your area. The coverage is available to all people eligible for Medicare, regardless of income and resources, health status, or current prescription expenses. Medicare prescription drug coverage provides protection for people who have very high drug costs.

How does Medicare prescription drug coverage work?
Medicare Part D works in tandem with Medicare Parts A and B. Individuals entitled to Part A or enrolled in Part B can sign up for Part D to receive help paying for prescription drugs. Like other insurance, if you join, you will pay a monthly premium, which varies by plan, and (for most plans) a yearly deductible. You will also pay a part of the cost of your prescriptions, including a co-payment or coinsurance. Costs will vary depending on which drug plan you choose. Some plans may offer more coverage and additional drugs for a higher monthly premium. Plans also vary in terms of the co-pays, prescription drugs that are covered (this is called the "plan formulary") and the pharmacies that may be used.

If you have limited income and resources, and you qualify for extra help, you may not have to pay a premium or deductible. Individuals enrolled in both Medicare and Medicaid ("Dual Eligibles") who have not already selected a Part D plan will be automatically enrolled in Medicare Part D by their state agency.

If I am on Medicare do I have to enroll in Part D?
Medicare Part D is an optional plan. No one is required to enroll but if you are eligible and delay enrolling, you risk paying a penalty in terms of increased insurance premiums when and if you enroll at a later date.

How do I get more information and enroll?
Enrolling in Medicare Part D is easy. Call us for a free Medicare Part D quote. We can answer your questions and handle your enrollment over the phone or email/mail an application to you if you wish. Coverage becomes effective on the first day of the month after your enrollment.

What is Open Enrollment?
The Open Enrollment period for Medicare Part D (officially, the Medicare Part D Initial Enrollment Period - IEP) is a one-time event when an individual first has the opportunity to enroll in a Medicare Part D Prescription Drug Plan (PDP). It occurs for most people when turning age 65 and enrolling in Medicare Parts A & B for the first time. For people turning 65 the Part D IEP lasts seven (7) months (it begins three (3) months prior to your birth month, includes your birth month, and extends three (3) months after your birth month. In addition, people of any age enrolling in Medicare Part B for the first time may apply for Medicare Part D three months prior to their requested effective date for Part B, during the month of their Part B effective date as well as three months after their Part B effective date.

What is the Annual Election Period (AEP)?
The Annual Election Period begins November 15, and ends December 31st. Anyone who already enrolled in a Medicare Part D plan may change plans during this period each year without penalty. Eligible individuals (people on Medicare) who chose not to enroll during their initial Open-Enrollment Period may enroll in Medicare Part D between November 15 and December 31 each year, but penalties will apply unless the individual had "creditable" prescription drug coverage*. Enrollments during this period have an effective date of January 01.

What is a Special Election Period (SEP)?
A Special Election Period means that you are allowed to enroll in Medicare Part D without penalty after the Initial Election Period and/or Annual Election Period because you meet certain conditions set forth by the government. Below are the specific situations which might qualify you for a SEP.

You may qualify for a Special Election Period if:

  • You are a Hurricane evacuee and reside in certain zip codes as identified by the Federal Emergency Management Agency at the time of the hurricane.
  • You move permanently outside your plan's service area.
  • You're enrolled in another prescription drug plan or a Medicare Advantage plan whose contract is terminated.
  • You are not adequately informed about creditable prescription drug coverage.
  • You lose your previous creditable coverage through no action of your own*.
  • Your enrollment or non-enrollment is caused by an error by a federal employee or contractor hired by the federal government.
  • You were eligible for both Medicare and Medicaid (a “dual eligible”) but you lost your dual eligibility status.
  • You want to move from an employer-sponsored prescription drug plan to a Medicare Prescription Drug Plan.
  • You want to leave your current Medicare Prescription Drug Plan because it was reprimanded by the federal government or the federal government has determined the plan violated a material provision of its Medicare contract in relation to services provided to you.
  • You’re enrolled in a Cost Plan that isn’t renewing its contract with Medicare. This SEP begins 90 calendar days prior to the end of the contract year (i.e., October 1) and ends on December 31 of the same year.
  • You want to move from a Program of All-Inclusive Care for the Elderly—PACE—to a Medicare Prescription Drug Plan.
  • You live in—or are moving in or out of—a skilled nursing facility, nursing facility, intermediate care facility for the mentally retarded, psychiatric hospital or unit, rehabilitation hospital or unit, long-term care hospital or swing-bed hospital.
  • Your Medicare entitlement determination is made retroactively.
  • You are not eligible for premium free Part A and enroll in Medicare Part B during the January-March Part B General Enrollment Period.
  • You have a low-income subsidy.
  • The federal government may authorize other special election periods.

*To avoid a penalty, individuals must apply for Medicare Part D within 63 days of losing "creditable" presciption drug coverage, which is coverage that is at least as good or better than the standard benchmark level of Medicare Part D Prescription Drug coverage as determined by the individual's coverage provider.

Can I change my Part D plan after I enroll?
Once enrolled in a Medicare Part D Prescription Drug Plan indiviuals can only change their plan from November 15 to December 31 of each year, with an effective date of January 1 of the following year.

Important Medicare Part D Dates to Remember

November 15
Annual Election Period begins. First day you may elect to enroll in a Medicare Part D Plan, effective next calendar year.

December 31
Last day you can enroll or change Medicare Part D Prescription Drug plans for the next calendar year, unless you qualify for an exception.

January 1
First day you can use your Part D Prescription Drug Plan card for that plan year.


from Medicare.gov, Prescription Drug Coverage (Oct 2008), Prescription Drug Coverage: Basic Information (Oct 2008)

Know What You Want from a Medicare Plan

Whether Original Medicare alone, Original Medicare plus a Medicare Supplement plan, or a Medicare Advantage plan is right for you will depend on your unique needs and circumstances. Think about what is most important to you when you are healthy and when you are sick. Here are some topics to consider:

Receiving care from the doctor and hospital of your choice
Under original Medicare, you can use whichever specialists and hospitals you choose, whenever you need, and without a referral from another doctor. Medicare private plan options could limit your ability to get care from the doctor or hospital of your choice, or there may be extra charges for out-of-network care. If provider choice is a priority, you should consider original Medicare with added protection from a Medicare Supplement insurance policy, sometimes known as Medigap, or from an employer-sponsored or union retiree health plan, if you are eligible.

Getting coverage of additional benefits to reduce your medical costs
If you are on a tight budget and are willing to limit your choice of doctors and hospitals, you may be able to reduce your health care expenses and get coverage of additional benefits through a Medicare Advantage plan. It is important to review the scope and limits of additional benefits when choosing among available plans. It is also important to look at how much your out-of-pocket costs will be if you get sick. For example, some Medicare private plans charge a copay for each day of an inpatient hospital stay, while original Medicare charges only a deductible but no daily copays for the first 60 days of a hospital stay.

Maintaining health care coverage while away from home
Under original Medicare, you will be covered for care anywhere in the United States. While private plans must cover emergency care for members outside the plan area, most do not cover other health care services while away from home. For example, Medicare HMOs have more restrictive networks of doctors and hospitals that limit coverage away from home.

Keeping supplemental coverage from a former employer or union
If you are considering joining a Medicare private plan (either a Medicare Advantage plan or a stand-alone prescription drug plan), you should talk to your employer or former employer to be sure you won't lose valuable retiree health benefits if you sign up for a private plan. Many employers offer retiree health coverage as a supplement to traditional Medicare; some also offer coverage through Medicare HMOs and other private plan options.

Coordinating with Medicaid benefits
If your income and assets are quite modest, you may qualify for Medicaid benefits or other special programs that will help pay some of your health care costs. For those who qualify, Medicaid often pays for valuable benefits, such as nursing home care, and also pays Medicare's premiums. If you are already covered by Medicare and Medicaid, you should find out what you must pay to join a Medicare private plan and whether Medicaid will cover the plan’s copayments.

Standardized Medicare Supplement Plans for Most States (excluding MA, MN, and WI)

 

Every company offering Medicare Supplement insurance must offer Plan A. In addition, companies may have some, all, or none of the other plans.

Basic Benefits - Included in all plans:

Inpatient Hospital Care: Covers the cost of Part A coinsurance and the cost of 365 extra days of hospital care during your lifetime after Medicare coverage ends.

For medicare supplement plans, Medical Costs: Covers the Part B coinsurance (generally 20% of Medicare-approved payment amount) or copayment amount which may vary according to the service. For hospital outpatient services, the copayment amount will be paid under a prospective payment system. If this system is not used, then 20% of eligible expenses will be paid.

Blood: Covers the first 3 pints of blood each year.

 

Options A B C D E F* G H I J*
Basic Benefits
Part A: Inpatient Hospital Deductible   
Part A: Skilled-Nursing Facility Coinsurance      
Part B: Deductible                     
Foreign Travel Emergency      
At-Home Recovery                  
Part B: Excess Charges                100% 80%    100% 100%
Preventive Care                        

* Plans F and J also have a high deductible option. If you choose this option, in 2009 you must pay $2,000 out-of-pocket per year before the plans pay anything. Insurance policies with a high deductible option generally cost less than those with lower deductibles. Your out-of-pocket costs for services may be higher if you need to see your doctor or go to the hospital.

BASIC BENEFITS: Basic Benefits for Plans K and L include similar services as Plans A through J, but cost sharing for the basic benefits is at different levels.

  K** L**
Basic Benefits 100% of Part A Hospitalization Coinsurance plus coverage for 365 days after Medicare Benefits end 50% Hospice cost-sharing 50% of Medicare eligible expenses for the first three pints of Blood 50% Part B Coinsurance, except 100% Coinsurance for Part B Preventive Services 100% of Part A Hospitalization Coinsurance plus coverage for 365 days after Medicare Benefits end 75% Hospice cost-sharing 75% of Medicare eligible expenses for the first three pints of Blood 75% Part B Coinsurance, except 100% Coinsurance for Part B Preventive Services
Skilled Nursing Coinsurance 50% Skilled Nursing Facility Coinsurance 75% Skilled Nursing Facility Coinsurance
Part A Deductible 50% Part A Deductible 75% Part A Deductible
Part B Deductible    
Part B Excess (100%)    
Foreign Travel Emergency    
At-Home Recovery    
Preventive Care NOT Covered by Medicare    
  $4,620 Out of Pocket Annual Limit (2009) *** $2,310 Out of Pocket Annual Limit (2009) ***

**Plans K and L provide for different cost-sharing for items and services than Plans A through J. Once you reach the annual limit, the plan pays 100% of the Medicare copayments, coinsurance, and deductibles for the rest of the calendar year. The out-of-pocket annual limit does NOT include charges from your provider that exceed Medicare-approved amounts, called “Excess Charges”. You will be responsible for paying excess charges.

***The out-of-pocket annual limit will increase each year for inflation.