Review

Medicare 4 parts of Medicare

• Part A: Hospital Insurance• Part B: Medical Insurance• Part C: Medicare Advantage Plans• Part D: Prescription Drug Coverage

Part A & B= Original Medicare• Automatic enrollment if getting SS benefits, must enroll if not• Premiums always for Part B, only for A if not enough credits• Not comprehensive coverage, has coverage gaps• Out-of-pocket costs for A & B change yearly- see chart

Medicare Part A (Hospital Insurance)

Part A Covers:•Inpatient hospital care•Care in a skilled nursing facility (SNF)•Home health care•Hospice care•Blood

In-Patient Hospital Coverage Covered days in a hospital

• 90 renewable days Medicare pays 100% for days 1-60 in a benefit period* AFTER

beneficiary pays Part A deductible Daily co-payment for days 61-90 in a benefit period

• 60 non-renewable days Daily co-payment for days 91-150 (lifetime reserve days)

A benefit period is a period of time that Medicare pays for a person’s care in a hospital or SNF. It begins when a beneficiary goes into the hospital and ends when she/he has been out of the hospital or skilled nursing facility for 60 consecutive days

Medicare Part B (Medical Insurance)

Physicians’ services Out-patient hospital services Durable medical equipment Prosthetics, orthotics, and supplies Ambulance Home health care (if not Part A) Blood (if not Part A)

Physician Services Physicians’ services covered

• Exams DOES NOT include routine annual physicalsWelcome to Medicare Exam

1x only exam within first 12 months of joining Part BAnnual Wellness Visit

Discussion with doctor to develop prevention plan to improve health, routine measurements height, weight, blood pressure

• Medical and surgical procedures, anesthesia, diagnostic tests and procedures

• Radiology and pathology services (in or out of the hospital)

Physician Services Physicians’ services NOT covered:

•Most routine physical exams and tests related to such exams

•Most routine foot care

•Exams for the fitting of hearing aids

•Exams for eyeglasses (except cataract related)

•Most routine dental care or false teeth

Ambulance Coverage Medicare covers ambulance service when

transport in another vehicle would endanger health

Will pay for transport from home to hospital/SNF or from hospital/SNF to home

Medicare will NOT pay for ambulance used as routine transportation

Medicare Advantage

Type of Medicare health plan offered by a private company that contracts with Medicare to provide a beneficiary with their Part A & B benefits

One way for a beneficiary to get additional Medicare coverage to cover the gaps in Original Medicare

The plan must offer Part D drug coverage – members who want drug coverage may only take drug plan offered by the Medicare Advantage plan• If enroll in stand alone PDP, will be dis-enrolled from Part C and

returned to Original Medicare

Medicare Advantage Eligibility requirements

• Have Medicare Part A & Part B and must pay Part B premium• Cannot have ESRD (except if have coverage with a non-Medicare

plan from the same company prior to being diagnosed) • Must live in the plan’s service area• Cannot be out of plan’s service area for more than 6 consecutive

months

Automatic disenrollment when changing Medicare Advantage Plans• Don’t need to call plan

Medicare Advantage 4 Enrollment Periods

• Initial: Same as Part B (7 months around birthday)• Open: Oct. 15th-Dec 7th (effective Jan 1st) can change from,

Original Medicare to Medicare Advantage PlanMedicare Advantage plan to Original MedicareMedicare Advantage plan to another Medicare Advantage PlanUpgrade to include Medicare Prescription Plan coverageDowngrade to exclude Medicare Prescription Plan coverage

• Special: Various qualifying events• MADP: Jan 1st– Feb 14th. Can leave plan and return to Original Medicare

Cannot move to another MA plan during this period

Medicare Advantage Plan types

• HMO (Health Maintenance Organization)Lower premium managed care plan, must stay in network

• HMO-POS (HMO with Point-of-Service option) HMO plan but can use out of network providers • PPO (Preferred Provider Organization)

Can use out of network providers for extra cost

• SNP (Special Needs Plan)Comprehensive program of medical care with membership limited to certain groups

• PFFS (Private-Fee-For-Service)Use providers who accept plan, pay extra for extra benefits

Quick Reference:Pro’s of Medicare Advantage Plans

Medicare Advantage Plans tend to attract people who are not high utilizers of medical services. They also attract people who want a lower premium plan

Pro’s:• Convenience of having only one plan (drug plan can be included• More choices available (HMO’s, HMO-POS’s, PPO’s…)• Lower premiums than Medigap plans• Potential for better coordination of care (HMO’s provide this)• Additional benefits such as hearing, dental, vision and annual exams

Medicare Supplement Insurance (Medigap)

Examples of Gaps in Medicare Part A gaps:

• In-patient hospital deductible• Daily co-payment for in-patient hospital days 61-90• Daily co-payment for in-patient hospital days 91-150• Daily co-payment for SNF days 21-100

Part B gaps:• Annual deductible• Co-insurance (usually 20%)

First three pints of blood Coverage outside the United States

Medigap Medicare Supplement Insurance (referred to as Medigap)

• Special kind of health insurance coverage developed to provide extra coverage beyond Medicare by filling some of the gaps in Medicare coverage

• Offered by private insurance companies (not the federal gov’t)• A Medigap policy is different from a MA plan; MA plans are ways to get

Medicare benefits. A Medigap policy acts as a secondary policy to cover the costs of Original Medicare benefits

• Not all products that help cover Medicare out-of-pocket costs are Medigap policies (i.e. Retiree Plans, MassHealth)

• Prescription coverage NOT included; if a beneficiary wants prescription drug coverage, must join a Medicare Prescription Drug Plan

Medigap Features Medigap Features

•No networks, can go to any doctor that accepts Medicare

•Generally, Medigap policies pay only after Medicare pays first (exception = foreign travel)

•Coverage is standardized to make policies easier to compare

Consumer Protection

Consumer protections:•Outline of coverage must be provided

•Free Look: Can return policy for full refund within 30 days if not used

•Illegal to be sold more than one Medicare Supplement (upgrade if need more coverage)

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Medigap Background Legislation enacted under the Medigap Reform Law Act of 1990 (also

known as OBRA 90) established uniform regulations for Medicare Supplement/Medigap Insurance in every state• Every state, except MA, WI and MN, was required to adopt the 10

standard benefit packages and label them plans A-J• All Medigap policies and text are standard for all insurers, basic

benefits are the same but some plans may offer additional benefits and prices may differ

• OBRA law did not affect policies already in force, i.e. they did not have to come into compliance to be one of the new types of policies (ex: Supplement Two plan in MA)

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Medigap in Massachusetts: Special Features

Special features of Medigaps in MA• No waiting period for pre-existing conditions (federal

law allows up to six months)

• Guarantee issue (cannot deny coverage based on age, health, past claims)Exception is ESRD for under 65

• Policies guaranteed renewable (except in case of non-payment or misrepresentation)

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Medigap in Massachusetts:Eligibility

Must be enrolled in Medicare Parts A and B Under age 65 Medicare beneficiaries with disabilities can enroll at any

time during the year during continuous open enrollment (see next slide) Beneficiaries with End Stage Renal Disease (ESRD):

• 65+: Can apply anytime

• Under 65: Massachusetts Medigap companies NOT REQUIRED to sell to beneficiaries under age 65 with ESRDInsurers may decide to provide coverage to persons under 65 with

ESRD, but are not required to do so

Medigap in Massachusetts:Open Enrollment

Continuous Open Enrollment• Massachusetts Medigap companies currently offer

continuous open enrollment allowing beneficiaries to join or change companies or coverage at any time

• Medicare beneficiaries in other states can purchase a Medigap policy during one of the federally-regulated Medigap enrollment periods

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Changing Medigap plans Beneficiaries must call their existing Medigap plan to

dis-enroll when changing Medigap plans

• No automatic disenrollment like with Medicare Advantage Plans

• Must call new Medigap plan to enroll

Medigap in Massachusetts: Policies

Medigap policies in Massachusetts• All Medigap policies sold in MA must include certain “Basic

Benefits” (minimum package of benefits allowed by law)

• All private Medigap companies must offer the 2 standardized plans available in Massachusetts

• 2 standardized Massachusetts plans: 1. Core: Basic Benefits package2. Supplement One (“Medex Bronze”): Basic Benefits

with additional benefits

Supplement Two (“Medex Gold”): No longer being sold but can still be held by beneficiaries

Core Massachusetts Core policy

• Core offers the following Basic Benefits coverage: Part A daily co-payment fro hospital days 61-90 Part A daily co-payment for hospital care days 91-150 100% Part A eligible expenses beyond 150 days to a maximum

of 365 additional lifetime days Part B co-payment (usually 20%) First 3 pints of blood Additional 60 days per year in a licensed mental health

hospital

Supplement One Massachusetts Supplement One policy

• In addition to the Basic Benefits coverage offered by Core, Supplement One offers the following additional coverage:

Part A deductibleSkilled Nursing Facility co-payment days 21-100

Part B deductible

Foreign travel (some CORE plans also offer this)

Core & Supplement One Benefits

MEDIGAP BENEFITS

MEDIGAP POLICIES

CORE SUPPLEMENT ONE

Basic benefits Yes Yes

Part A: inpatient hospital deductibleNo Yes

Part A: skilled nursing facility coinsuranceNo Yes

Part B: deductible No Yes

Foreign travel emergency No Yes

Inpatient days in mental health hospitals60 days per calendar year

120 days per benefit year

State-mandated benefits (yearly Pap tests and mammograms. Check plan for other state-mandated benefits.)

No Yes

Supplement Two Plan Policy no longer sold in Massachusetts

• As of 2006, policy no longer being sold but beneficiaries are allowed to keep policy if bought prior to this date

• Premium very high due to decreased beneficiary base

• Offers prescription coverage which IS considered creditable

• If beneficiary drops policy, cannot enroll again

• If beneficiary drops policy and wants Part D coverage, must enroll in Part D during Open Enrollment Period (no SEP)

Cost

All policies have monthly premium

Premium varies by policy and company

Premium usually increases slightly annually - MA requires premiums to be approved by the Division of Insurance, loss ratio determines if increase is approved and hearing required for increases >10%

MA requires premiums to be the same for all consumers, regardless of age (not in other states)

Counseling Beneficiaries: Is A Medigap Needed?

Does every Medicare beneficiary need a Medicare Supplement? • Questions to ask beneficiary:

Does she/he understand the “gaps” in Medicare coverage?

Does she/he have other coverage to help pay for out-of-pocket costs associated with Medicare? (Medicare Advantage Plan, Retiree Coverage, MassHealth)

Can she/he afford to purchase supplemental coverage? (screen for Public Benefit programs)

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Counseling Beneficiaries:Choosing a Policy

What beneficiaries should consider when choosing a policy:

•Benefits: Choose a plan type (Core vs. Supp 1)

•Premiums: Benefits are almost identical from company to company

•Reputation, reliability, financial status, and customer service of companies

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Quick Reference:Pro’s of Medigap Policies

Medigap policies tend to be bought by people with a high utilization of medical services such as doctors and hospital services. These policies are also popular amongst individuals who travel in foreign countries and who like to be able to choose which doctor they see without a referral

Pro’s:• Can see any provider that accepts Medicare (no networks)• No referrals or PCP is needed• Continuous open enrollment periods• Low to no co-pays or deductibles• Many policies offer travel coverage• All policies standard; only 2 types of policies so choosing policy is easier• ESRD 65+ can join a Medigap policy

Medigap vs.Medicare Advantage

Original Medicare + Medigap Supplement 1 Medicare Advantage Plan

Higher premiums but no co-pays Generally lower premiums but

has co-pays Freedom to choose doctors May be restricted to network

No referrals necessary May need referrals for

specialists Some routine services not

covered (vision, hearing) May include extra benefits

(vision, hearing, fitness)

Covered anywhere in US Emergency services ONLY

outside service area

Two Options For Supplementing Medicare

Step 1: Decide how you want to get your coverage

PART AHospital

Insurance

PART BMedical

Insurance

PART CCombines Part A, Part B

and usually Part D

ORIGINAL MEDICARE MEDICARE ADVANTAGE PLAN

OR

PART D Stand Alone PDP

PART DIncluded in Part C

Step 3: Decide if you need to add supplemental medical coverage

MEDIGAPSupplement Core or Supplement 1 plan

ENDIf you join a Medicare Advantage

Plan with drug coverage (MAPD), you cannotjoin another drug plan and you don’t need and

cannot be sold a Medigap policy

Step 2: Decide if you need a Prescription Drug Plan

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Medigap Review Review

1. What is a Medigap policy?

2. Who can buy a Medigap policy?3. When can someone buy a Medigap policy?4. Can a Medicare beneficiary under age 65 buy a Medigap policy?5. Can a Medicare beneficiary with ESRD buy a Medigap policy?6. Does a Medigap policy pay everything Medicare does not pay?

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Medigap Review Review

7. What Medigap policies are sold in Massachusetts?

8. What companies sell Medigap policies in Massachusetts?

9. What Medigap policies are sold in other states?

10.Does every Medicare beneficiary need a Medigap policy?11.Do Medigap and Medicare Advantage pay for the same things?

12.Is Medicare Advantage (Medicare HMO or PPO) better than original Medicare plus Medigap?

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Medigap Quiz1. What Medigap plans are currently sold in Massachusetts and what do they

cover?2. When Clarence retired in 2004, he purchased a Medigap Supplement 1 Plan.

He didn’t join a Medicare Part D plan during the initial open enrollment because he was not taking any medication. He recently had a check up with his physician and was given a medication which will cost $300 per month. Clarence’s friend told him that he was smart not to have joined a Medicare drug plan as he can get his drugs from Canada. His friend said he would have had to pay a monthly premium for the Medicare drug plan and it would have wound up costing more than getting his drug from Canada.

What information would you give him?

Medigap Quiz, cont.3. Mr. Black has a Supplement 2 Plan. His premium will be increasing on

June 1. He says he cannot afford to pay the premium. He explains that he has dipped into his savings over the years to help pay his health care costs. He wants to know what other options are available to him. He tells you that he takes 5 different medications and needs prescription coverage.

What questions would you ask and how would you assist him?

4. What time of year can a Medicare beneficiaries purchase a Medigap plan?

5. What benefits do the two Medigap plans have in common?

Case Study 1:Gail Storm

Gail meets with you at the SHINE office on April 1st. Gail purchased a Medicare Supplement 2 Plan when she first became eligible for Medicare. She tells you that the premium has increased. It is now almost $700 per month and she cannot afford it. She explains that she takes several medications for which she needs coverage. She also wants health insurance coverage that will allow her to stay with her current doctors.

• What information would you give her?

Case Study 2:Ms. Penny Wise

Ms. Wise meets with you at the SHINE office. She is retiring from her job at the Pound Bank. She has been to Social Security and signed up for Medicare A & B. She now wants to know about Medigap insurance. She says that her company will be giving her health insurance after her retirement, but she tells you that one can never have too much insurance.

• How would you assist her?

Case Study 3:Mr. Hale N. Hardy

While in Florida on vacation, Mr. Hardy, who has Medicare A & B and a Blue Cross/Blue Shield Medicare Supplement 1 Plan, broke his arm and was taken to the hospital. Dr. Grim, who does not accept Medicare assignment, set Mr. Hardy’s arm. Mr. Hardy returned to Dr. Grim’s office for follow-up treatment. After Mr. Hardy returned home, he received a bill from the doctor. Mr. Hardy came to see you because he doesn’t understand why he received the bill and tells you he has never had to pay additional money before.

• Why is Mr. Hardy being charged an additional amount of money?• How would you assist him?

Case Study 4:Sol & Emm Vow

Sol and his wife Emm have both been on Medicare A & B since they turned 65 in 2006. He is currently working for a company he’s been with for the past 19 years, but expects to be let go in the next month. His company has been buying Blue Cross/Blue Shield Medex Gold plans for both of them since they became eligible for Medicare. Sol says he will not be able to afford the monthly premiums for Gold once the employer stops covering. He wants to know what affordable plans are available.

Sol takes several expensive medications which would cost over $1,000/month if he had to purchase them. Emm takes two generics. Their current combined monthly income is $4,200/month.

Case Study 5:Mr. Wayne Scoat

Mr. Wayne Scoat meets with you at the SHINE office. Mr. Scoat tells you he enrolled in Blue Cross/Blue Shield’s Medicare Supplement 2 (Medex Gold) in June of 2005 when he became eligible for Medicare because he had high prescription costs. He is now taking only one inexpensive medication and is paying for a benefit he is not using. A friend told him he will have to wait for the annual open enrollment before he can make a change.

The friend also told him he will pay a penalty if he enrolls in a Medicare Prescription Drug Plan (Part D). He wants to know if he has any other options.

• How would you help him?

Case Study 6:Mr. Peter Pan

Mr. Pan meets with you at the SHINE office. He has been on Medicare A & B for the past 6 years with a supplemental retiree plan that includes prescription coverage through his former employer. He has been notified that his employer retiree insurance will be ending next month. He wants to know what insurance is available to him. He is concerned that he will not be able to get insurance because he was recently diagnosed with high blood pressure. A friend told him he will have to pay a penalty for not joining a Part D plan during the initial open enrollment period.

• How would you assist him?

Case Study 7:Paul E. Anna

Paul calls with a question and concerns about his insurance. He became eligible for Medicare about 6 months ago when he turned 65, and he joined a Medicare Advantage HMO Plan. He is not happy with the plan and wants to get into original Medicare and pick up a Medigap plan. His HMO told him he can only make a change during the annual open enrollment period which is several months away.

• How would you help him?

Case Study 8:Buck Ille

Buck is 76 years old and just moved here from Texas. He tells you he had great coverage with an HMO in Texas but now needs to get something comparable in Massachusetts. He explains that he met a woman from Massachusetts, Maud, who was in Texas on vacation. They hit it off and he moved here because she wants to stay close to her children and grandchildren. They are getting married and she will soon become Maud Ille. Now that he has a companion they plan to do a lot of traveling. He wants to make sure he gets a health plan that will provide good coverage when he travels.

• How would you help him?