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About Medicare and Changes in 2012
Presented by Nancy A. Dykeman, CLTC, CSAfor Society of Certified Senior Advisors®
Agenda Common misconceptions Differences among Medicare
Parts A, B, C and D; Medigap Enrollment Medicare: 2012 changes Valuable resources
Common Misconceptions “Medicare is free and covers
everything.” “Medicare Part A with a Medigap
policy is enough.” “I can enroll in Medicare whenever I
want to.” My doctor will tell me what I need for
Medicare coverage.” “Medicare will cover my long-term
care.”
What Seniors Are Saying . . . “I turn 65 next year and I’m counting on my Medicare to replace my current insurance. There are so many moving parts to Medicare, I’m confused.”
“Where would I find information to help me understand my Medicare insurance benefits?”
Benefits ofUnderstanding Medicare
CSAs –
Learn and share knowledge; guide seniors to resources Increase client loyalty and trust Assist their own families
Seniors – Make better decisions for their
health care, short- and long-term
Medicare - Since 1965…
Changes in coverage Increasing premiums More out-of-pocket expenses Added prescription drug coverage
Do you think things might keep changing?
Bailing out of Medicare? July 6, 2011 Article by Paula Span
“Dr. Tara Bishop, an internist and assistant professor of public health at Weill Cornell Medical College in New York analyzed data from a survey of 4,112 physicians practicing in private, nonhospital offices and accepting new patients from 2005-2008. (today, based on her findings) ‘Well over 90 percent of doctors, in all kinds of specialties, still take new Medicare patients.’ Based on patient surveys…a small proportion have trouble when they seek a new primary care physician. Access problems might be greater in certain geographic areas and doctors might accept Medicare patients only in limited numbers. “
What is Medicare?
Medicare is health insurance for people:
• Age 65 or older
• Under age 65 with certain disabilities
• Any age with End-Stage Renal Disease (ESRD) -- permanent kidney
failure requiring dialysis or a kidney transplant
Medicare’s GoalTo make it easy for you to get the highest quality health care at the most affordable price.
To transform itself from a program which simply pays the bills to a program which actively supports a high quality health care system.
Medicare: A Handful of Coverage! Part A = Original Medicare (your
left thumb) hospitalization, rehab Part B = Doctors, outpatient
services (first finger) Part C = Advantage Plans
including A, B and Part D (middle finger) Part D = Prescription Drug
Coverage (ring finger) Medigap = Pays deductibles and co-
pays (little finger)
Part A – Your Thumb Part A is hospitalization insurance
for inpatient care, including: Rehabilitation facilities Some skilled nursing facility care Hospice care Some skilled home health care
Medically necessary and reasonable treatments
Part A continued Must show significant
improvement
Outpatient therapy Speech-language Occupational and physical
Entitlement program; majority of beneficiaries do not pay premiums
Part A + Employer PlanFor seniors who continue to work:
Comprehensive
Both plans pay; one is primary provider
Employer plan covers Part A co-pays and deductibles, regardless of who the primary provider is
Which Plan Pays First?
At the time claim is submitted -- Employer plan administrator Health care provider Medicare . . .
Determine which plan is the primary coverage based on Medicare rules
Part B – First Finger
Medically necessary services Doctor Outpatient care Other medical services Preventive services
Voluntary plan; monthly premium paid by deduction from Social Security check
Part C – Middle Finger
Called Medicare Advantage Plans Cover Parts A and B plus provide
additional coverage Offered by private companies
Voluntary program; Part C premiums (if any) are paid directly to plan provider; senior must still pay Part B premiums, too
Part C - Medicare Advantage continued More coverage than Parts A and B,
especially preventive services Vision exams and eyeglasses Dental Health and wellness programs Rx (most include Medicare drug
prescriptions)
Part D – Ring Finger
Prescription Drug Plan – 2004 Must have Parts A and B Private companies sell plans Must live in plan’s service area
Part D CostsPlans vary in cost and drugs covered Co-pays or coinsurance Deductibles Monthly premiums Drug costs
Voluntary program; senior pays premiums out-of-pocket or premiums are included in Part C Medicare Advantage Plan
Part D continued Initial Deductible (2012) $320 Initial Coverage Limit $2,930 Out of Pocket Threshold $4,700 Coverage Gap (donut hole) begins once you reach
$2,930 and ends when you spend a total of $4,700
Part D enrollees will receive a 50% discount on total cost of brand name drugs while in donut hole and a maximum of 86% co-pay on generic drugs while in the coverage gap.
Medigap – Little Finger Also called Medicare Supplement
Plans
Sold by private insurance agents
MUST have Parts A and B to buy
Covers only 1 person
Medigap – Little Finger continued
Helps pay costs that Parts A and B don’t: Co-pays Coinsurance Deductibles
Voluntary program; senior pays for it
Medigap Plans continued 11 Standardized plans – A through
N
A is basic coverage; more in the others, some offer out-of- country coverage, most popular to cover most costs is plan F.
Medigap plans are sold by private insurers. There are 11 sets of currently available coverages: A, B, C, D, F, G, K, L, M, and N. Four discontinued plans--E, H, I, and J--are still available to people who had the plans before they were closed. Rates for the plans vary by insurer and state, but federal rules require that all plans with the same letter must offer the same coverage.
Medigap Plans continued
Cost varies
Don’t need a Medigap plan if you have a Part C Medicare Advantage plan
Medicare Case Study
Deciding if you want Original Medicare or a Medicare Advantage Plan
When to Enroll or Change Your Medicare, Medigap Plans
Part A and Part B enrollments Automatic Initial General Special
Part C Medicare Advantage Plans Part D Prescription Drug Medigap Supplemental Plans
Annual Changes in Medicare All parts of Medicare
New premiums New limits
New plans added
Where to learn more: www.medicare.gov
Part A in 2012
Monthly Premium $0 if senior paid at least 40 credits
in employment taxes to Social Security during working years (or is a spouse or widow/er of such a person) *
$451 for less than 30 credits
* Approximately 99% of beneficiaries. (Centers for Medicare and & Medicaid Services)
Part A in 2012 continuedHOSPITAL- Each benefit period, you pay:
Deductible: $1,156 for a hospital stay of 1-60 days
Coinsurance for a hospital stay: $289 per day Days 61-90 $578 per day Days 91-150 (Lifetime Reserve Days)
All costs for each day beyond 150 days in a benefit period.
Can have more than one benefit period in a year
Part A in 2012 continued
SKILLED NURSING FACILITY
Each benefit period, you pay:Coinsurance $0 Days 1-20 $144.50 per day Days 21-100 All costs for each day after day 100 in a benefit period.Can have more than one benefit period in a year
Part B in 2012Premium based on annual income
Most pay $99.00 monthly *
Social Security withholds their Part B premium and their incomes are:
Individual: $85,000 - $170,000 ($139.90) Joint: $170,000 to $214,000 ($139.90)
* Approximately 73% of beneficiaries. (Centers for Medicare & Medicaid Services)
Part B in 2012 continued
Depending on income for singles and couples the higher the income over $85,000 for an individual and $170,000 for a couple may pay up to $319.70 a month.
Source: www.medicare.gov
Part B in 2012 continued Deductible: $140 annually
Coinsurance or co-pay:Seniors pay these amounts for most doctor services, durable medical equipment, outpatient mental health care, and other services
Coinsurance (another carrier); co-pay (cash out-of-pocket)
Part C in 2012Medicare Advantage Plans
Premiums vary depending on provider and plan – some are $0
Pays out-of-pocket costs for: Co-pays Coinsurance Deductibles
Don’t need a Medigap Plan
Part D in 2012
Premium Depends on the drugs you take
Depends on your State
Future of Medicare“Absent fundamental reforms, over the next two decades the average American household’s health-care spending, including the portion of its taxes that pays for Medicare and Medicaid, will go from 23% to 41% of average household income . . . Michael Levitt Former Secretary of Health and Human Services
Medicare Future continued“The projected date of Health Insurance (HI) Trust Fund exhaustion is 2024, five years earlier than estimated in last year’s report, at which time dedicated revenues would be sufficient to pay 90 percent of HI costs.
The drawdown of Social Security and HI trust fund reserves and the general revenue transfers into SMI will result in mounting pressure on the Federal budget. In fact, pressure is already evident. For the sixth consecutive year, a "Medicare funding warning" is being triggered, signaling that projected non-dedicated sources of revenues -- primarily general revenues -- will soon account for more than 45 percent of Medicare’s outlays. That threshold was in fact breached for the first time in fiscal 2010.”
A SUMMARY OF THE 2011 ANNUAL REPORTSSocial Security and Medicare Boards of Trustees
Last Thoughts… In 1965 America’s median age was 28.4,
now it is 35.3 years.
The average life expectancy is age 80 (men and women combined)
Ratio of workers to seniors has steadily declined; number of seniors living long enough to have 5 or more chronic conditions -- 23% of Medicare beneficiaries -- has increased
Source: George Will, The Washington Post
Long-Term Care -- Does Medicare Cover It?
Part A – Partially; only skilled, not custodial care
Part B – No Part C – No Part D – No Medigap Supplement Plans - No
Valuable Resources
1-800-MEDICAREwww.medicare.gov
Medicare & You 2012 Handbookhttp://www.medicare.gov/Publications/Pubs/pdf/10050.pdf
Where to Get Your Medicare Questions Answered
Thank you.