More About Medicare and Changes in 2010

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Copyright© 2009, 2010

Agenda Common misconceptions Differences among Medicare Parts A,

B, C and D; Medigap Enrollment Medicare: 2010 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?”

“Help, I need somebody, help, not just anybody…” -- The Beatles

Benefits ofUnderstanding Medicare

Make better decisions for your health care, short- and long-term

Have information and resources to address future needs

Potential to avoid or reduce stress on the family

Medicare - Since 1965…

Changes in coverage Increasing premiums More out-of-pocket expenses New plan - prescription drugs

Do you think things might keep changing?

“Medicare Patients in the Cold as MDs Balk at Bare-bones Fees”

Denver Post March 17, 2009

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 Goal

To 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 and Medigap: A Family of Coverage

Part A = Oldest child Part B = Next oldest Part C = Middle child Part D = Next child Medigap = Last child

Part A – Oldest Child Part A is hospital insurance for

inpatient careRehabilitation facilitiesSome skilled nursing facility careHospice careSome skilled home health care

Medically necessary and reasonable treatments

Part A continued Must show significant improvement Outpatient therapy ordered by doctor and

provided by Medicare-certified home health agencyPart time or intermittent skilled nursingSpeech-languageOccupational and physical

Entitlement program; majority of beneficiaries do not pay premiums

Part A + Employer Plan

For 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 the claim is submitted --

Employer plan administrator

Health care provider

Medicare

Determine which plan is the primarycoverage based on Medicare rules

Part B – Next Oldest Child

Medically necessary services Doctor Outpatient care Some preventive services Variety of medical services

Voluntary plan; monthly premium paidby deduction from Social Security check

Part C – Middle Child

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 the 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 – Next Child

Prescription Drug Plan – 2004

Must have Part A or Part B to enroll – or if you have a Medicare Advantage Plan, both Parts A and B

Private companies sell plans

Must live in plan’s service area

Part D Costs

Plans 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

Medigap - Last Child Also called Medicare Supplement Plans Sold by private insurance agents MUST have Parts A and B to buy Covers only 1 person Helps pay costs that Parts A and B don’t:

Co-pays Coinsurance Deductibles

Voluntary program; senior pays for it

Medigap Plans continued Standardized plans – A through L

A is basic coverage; more in B – L; some offer out-of-country coverage

June 1, 2010: New plans M and N; and E, H, I and J no longer available for purchase

Cost variesDon’t need if you have a Part C Medicare Advantage plan

Medicare Case Study

Handout: 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

Handout: Medicare Enrollment Overview

Annual Changes in Medicare All parts of Medicare

New premiumsNew limits

New plans added

Where to learn more: www.medicare.gov

Part A – 2010

Premium $0 if senior paid at least 40 credits

to Social Security during working years

$461 per month if less than 40 credits paid

Part A 2010 continued

For each benefit period in a year: Deductible: $1,100 for each hospital stay of 1-60 days Coinsurance - hospital:

$275 per day - days 61-90 $550 per day - days 91-150 (60 Lifetime Reserve Days

Skilled Nursing Facility (SNF): $0 - days 1-20 $137.50 per day - days 21-100

Part B – 2010

Premium is based on income

Individual: $110.50 per month for adjusted gross income equal to or under $85,000

Joint tax return: Up to $353.60 per month for highest adjusted gross income above $428,000

Part B 2010 continued

Deductible is $155 annually

Co-pay or coinsurance Senior pays these amounts for most doctor services, durable medical equipment, and outpatient mental health care

Co-pay (cash out-of-pocket) or coinsurance (another carrier)

Part C – 2010

Premiums vary depending on provider and plan – some are $0

Pays out-of-pocket costs for:Co-paysCoinsuranceDeductibles

Don’t need a Medigap Plan

Part D - 2010

Premium Averages about $35 per month Can go up to $121 or more per

month State-specific

Handout: Medicare Part D Coverage

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.

Medicare Future continued

By curtailing revenues, today’s recession will bring closer the projected exhaustion of the Medicare Part A trust fund from early 2019 to perhaps 2016.”

-- Michael Levitt

Former Secretary of Health and Human Services

Last Thoughts… In 1965 America’s median age was 28.4,

now it is 36.6

The average life expectancy is age 80

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 2010 Handbookhttp://www.medicare.gov/Publications/Pubs/pdf/10050.pdf

Handout from Medicare & You 2010: Where to Get Your Medicare Questions Answered