Medicare + Medicaid

MedicareBy: Sean McCann3/9/20161

What is MedicareMedicare is a federal health insurance programFor Americans age 65 or older and for young Americans with disabilities

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Four types of Coverage

Part A Hospital InsurancePart B Medical InsurancePart C Medicare Advantage PlansPart D Prescription Drug Coverage

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Step 1: Enroll in Medicare during the appropriate enrollment periodStep 2: Decide which plan is right for youOriginal Medicare

Part A Hospital InsurancePart B Medical InsuranceMedicare Advantage Plan(like an HMO or PPO)Combines Part A, Part B and usually Part D

Step 3: Decide if you need to add drug coveragePart D:Prescription Drug Coverage (if not already included)Part DPrescription Drug CoverageStep 4: Decide if you need to add supplemental coverageMedigap (Supplement Insurance Policy)If you join Medicare Advantage Plan, you dont need and cant be sold a Medigap policy3/9/20164

ContributionsThe two main contributions to Medicare are the Hospital Insurance Trust Fund (HI) and the Supplementary Medical Insurance Trust Fund (SMI)Part A or Hospital Insurance is financed by the Hospital Insurance Trust Fund Part B or Medical Insurance is financed by the Supplementary Medical Insurance Trust Fund3/9/20165

How the Hospital Insurance Trust Fund is fundedThe Hospital Insurance Trust Fund income is primarily generated from payroll taxes from current workersEmployees and employers each pay 1.45 percent of wage earningsSelf-employed people pay 2.9 percent of wage earnings3/9/20166

How the Supplementary Medical Insurance Trust Fund is fundedThe Supplementary Medical Insurance Trust Fund income is generated from beneficiary premiums and federal general revenuesBeneficiary premiums cover 25 percent of the Trust FundFederal general revenues cover 75 percent of the Trust Fund3/9/20167

When can you sign up for Medicare?If you are already receiving Social Security, you will automatically be signed up for both Part A and Part B and your Medicare expenses will be taking out of your primary insurance amountIf you dont have Social Security, you need to apply during the different enrollment periods3/9/20168

Enrollment PeriodWhen It Occurs Who is impacted Helpful HintInitial Enrollment Period It begins 3 months before your 65th birthday month and runs until 3 months after that month.Those enrolling in any part of Medicare.To get Part A and/or Part B the month you turn 65, you must sign up during the first 3 months before you turn 65Special Enrollment Period It begins any time after age 65 while covered by an employer, and it ends 8 months after the month in which work stops or coverage lapses.Those who continue to work after age 65 and decide to delay enrollment.Receiving COBRA benefits does not affect the special enrollment period. Sign up for coverage before employment ends to avoid a gap in coverage.

General Enrollment Period January 1 March 31 Those who did not enroll in Parts A or B in their initial enrollment or special enrollment periods.Coverage does not go into effect until July 1.Annual Election Period January 1 March 31Those who want to switch from Original Medicare to Part C, switch from one Part C plan to another, or join, switch or drop Part D plans.Coverage does not go into effect until July 1.

Medicare Advantage Annual Disenrollment Period January 1 February 14 Those who want to switch from Part C to Original Medicare.Those who switch may also enroll in Part D.

Medigap Enrollment Period It begins the first day of the month you are age 65 or older and are enrolled in Part B, and it runs for 6 months.Those who want a supplemental policy to fill their gaps in coverageMissing this enrollment deadline may limit your options and lead to penalties.

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Penalties for late enrollmentPart B Monthly penaltyPart D Monthly PenaltyPart B Annual penaltyPart D Annual PenaltyTotal Annual PenaltiesLifetime Penalty Amounts1 Year late enrollment$10.50$3.90$126$46.80$172.80$3,283.203 years late enrollment$31.50$11.70$378$140.40$518.40$8,812.805 years late enrollment$52.50$19.50$630$235.20$865.20$12,978

Every 12 month period you go without Medicare part B, your part B monthly premium will increase 10%Every month you go without Part D insurance, your monthly premium will increase 1% of the national base beneficiary premium ($32.42 in 2014)Lifetime Penalty Amounts based on life expectancy of an average healthy 65 year old person who is expected to live until 853/9/201610

What is not Covered by MedicareCertain services such as long-term care, acupuncture, cosmetic surgery, routine dental care and routine vision care are not covered by MedicareThese services may be covered through part C Medicare Advantage, though an additional premium may be charged

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Four types of Coverage

Part A Hospital InsurancePart B Medical InsurancePart C Medicare Advantage PlansPart D Prescription Drug Coverage

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Medicare Hospital Insurance (Part A)It helps pay for inpatient hospital care, skilled nursing care, and hospice careNo physical exam is requiredYou may go to any hospital that takes MedicareNo referral is needed

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Medicare Hospital Insurance (Part A) CostsUsually there is no premium if you or your spouse paid Medicare taxes while workingDeductible, coinsurance and copayments apply Some people who do not qualify for premium-free coverage can pay a premium to obtain itFor Part A, each month (in 2014) you will pay:Nothing if you or your spouse worked and paid Medicare taxes for 10 years or more in the U.S$234 if you or your spouse worked and paid Medicare taxes between 7.5 and 10 years in the U.S$426 if you or your spouse worked and paid Medicare taxes for fewer than 7.5 years in the U.S

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Inpatient Hospital Care (Part A)Eligible if:Doctor makes official order which says you need 2 or more midnights of medically necessary inpatient hospital care to treat illness or injuryNeed type of care only given in hospitalHospital accepts Medicare

Covers:Hospital services*Semi-private roomsMealsGeneral nursingDrugs as part of inpatient treatmentDoes not cover:Private roomPrivate duty nursingT.V or telephone in roomPersonal care items*Hospital Services refer to medical and surgical services and the supporting laboratories, equipment and personnel that make up the medical and surgical mission of a hospital or hospital system

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Part A hospital inpatient costsYou pay:$1,216 deductible for each benefit periodDays 1-60: $0 copayment for each benefit periodDays 61-90: $304 copayment per day of each benefit periodDays 91 and beyond: $608 copayment per each "lifetime reserve day" after day 90 for each benefit period (up to 60 days over your lifetime)Beyond lifetime reserve days: all costs

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Requirements for Skilled Nursing Facility (SNF) Part AEligible if:been a hospital inpatient at least 3 days not including day of dischargeDoctor has decided you need daily skilled care given by skilled nursing staffSkilled Nursing Facility is certified by MedicareYou need these skilled services for a medical condition that was either:A hospital related medical conditionA condition that started while you were getting care in the skilled nursing facility for a hospital related medical condition

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Costs in Original Medicare for Skilled Nursing FacilitiesDays 120: $0 for each benefit periodDays 21100: $152 copayment per day of each benefit periodDays 101 and beyond: all costsIf break in skilled care lasts more then 30 days, you need a new 3-day hospital stayIf break in skilled care lasts at least 60 days in a row this ends your current benefit period and renews your SNF benefits

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Hospice and respite care Part AEligible if:You have part A MedicareYour doctor certifies that you are terminally ill and have 6 or less months to liveYou accept palliative care instead of care to cure illnessYou sign a statement choosing hospice care instead of routine Medicare covered benefits for your terminal illness3/9/201619

Costs for Hospice and Respite care under Original Medicare$0 copayment for hospice careMay need to pay a copayment of no more than $5 for each prescription drug and other similar products for pain relief and symptom controlMay need to pay 5% of Medicare approved amount for inpatient respite careRoom and Board3/9/201620

Medicare Medical Insurance (Part B) Covers two types of services:Medically necessary services-services or supplies that are needed to diagnose or treat your medical condition and that meet accepted standards of medical practicePreventive services-healthcare to prevent illness (like the flu) or detect it at an early stage, when treatment is most likely to work bestCovers things like:Clinical researchAmbulance servicesDurable medical equipmentOutpatient mental healthGetting a second opinion before surgeryDrugs given to you by a hospital

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Medicare Medical Insurance CostsFor Part B, each month (in 2014) you will pay:A $104.90 premium if your annual income is below $85,000 ($170,000 for couples).Everyone pays a $147 per year Part B deductibleYou generally pay 20% of the Medicare approved amount for the doctor or other health care provider's servicesCopayment for each service you get in an outpatient hospitalLate enrollment penalty may apply 10% increase on monthly premium for every 12 months period you could have had part B Medicare

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Part B premiums by incomeFile Individual Tax ReturnFile joint tax returnFile married & separate tax returnPremium amount you pay in 2014$85,000 or less$170,000 or less$85,000 or less$104.90Above $85,0000 up to $107,000above $170,000 up to $214,000N/A$146.90Above $107,000 up to $160,000above $214,000 up to $320,000N/A$209.80Above $160,000 up tp $214,000above $320,000 up to $428,000above $85,000 and up to $129,000$272.70Above $214,000above $428,000above $129,000$335.70

**Less then 5% of people pay a higher monthly premium3/9/201623

Medicare Advantage Plans (Part C)An alternate to Original Medicare offered by private insurers Plans cover Parts A and B and often Part D They may offer benefits or services not covered by Original Medicare like vision, hearing, dental, and/or health and wellness programsDifferent structures may be available, such as Health Maintenance Organizations and Preferred Provider Organizations. Some plans may require referrals or may restrict you to doctors in a networkMust pay monthly premium for Medicare Advantage Plans, along with Part B Premiums

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Medicare Advantage Plan Cont.Coverage for routine hearing exams and vision careAllowances toward eyewearRoutine preventive dental carePrevention and wellness programsWorldwide coverage for emergency careSome include Prescription Drug plans (Part D)Have out-of-pocket limits

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Typical Health Maintenance Organization (HMO)Least expensive and most restrictive Medicare Advantage planRestrictive in the doctors and other health care providers available to patient, must be part of network or you pay entire billHas to have a primary care physician in which the patient sees first at all timesNeed a referral from patient care physician to see other doctorNeed to get prior approval from primary care physician for certain medical services

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Typical Preferred Provider Organization (PPO)More attractive and more expensiveAllows a member to see physicians and other providers not in HMO network and allows for self-referringIf you go outside the plan or self-refer the plan pays smaller part of bill then if you followed the rulesMember pays a higher premium for the plan and a higher copayment each time the option is usedAlso pay a deductible which is usually less then a traditional insurance plan3/9/201627

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Medicare Prescription Drug Insurance (Part D) Protection is provided for people with high drug costsBoth brand-name and generic prescription drugs are covered.It is offered through private insurance companies approved by and under contract with MedicareAbout 40% of Americans age 65 and older take 5 or more prescription drugs a month

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Prescription Drug Insurance CostsIn general, you pay a monthly premium, along with cost-sharing amounts for each prescriptionPlans have a coverage gapafter you and your plan have spent a certain amount, you pay a higher percentage of the drug cost Plans do not cover every drug, so it is important to check the plan formulary that lists the covered prescriptions.

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Part D Premium based on IncomeFile individual tax returnFile joint tax returnFile married & separate tax returnMonthly premium for 2014$85,000 or less$170,000 or less$85,000 or lessyour plan premiumabove $85,000 up to $107,000above $170,000 up to $214,000N/A$12.10 + your plan premiumabove $107,000 up to $160,000above $214,000 up to $320,000N/A$31.10 + your plan premiumabove $160,000 up to $214,000above $320,000 up to $428,000above $85,000 up to $129,000$50.20 + your plan premiumabove $214,000above $428,000above $129,000$69.30 + your plan premium

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Donut Hole DiagramYou pay:100% of deductible ($310)25% of costs between $310 and $2,85047.5% for brand name drugs and 72% for generic drugs while in doughnut hole (between $2,850 and $4,550)5% after $4,5503/9/201632

Brand Name Drugs vs. Generic DrugsBrand Name and StrengthBrand Name CostGeneric CostGeneric NameGeneric SavingsClaravis 40 mg$1700.40$615.00Isotretinoin$1,085.40Percocet 10-325 mg$1,128.00$52.50Oxycodone HCI/ acetaminophen$1,075.50Glucophage 500mg$67.20$3.60Metformin HCI$63.60Plavix 75 mg$231.90$13.50Clopidogrel bisulfate$218.40

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MedigapSupplemental to Original Medicare, Parts A and BDesigned to fill gaps in coverage such as copayments, coinsurance, and deductiblesSold by private companiesPolicy covers only one personMedigap is guaranteed renewable even if you have health problems3/9/201635

Medigap Core Policy MassachusettsCovers Inpatient hospitalization care copayments for days 61-150 (first 60 days are covered by Medicare)Covers an additional 365 Lifetime Reserve days paid in full Covers Part B excess charges (usually 20%) Monthly cost is about $100 per month, prices vary depending on insurance company

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Supplement 1 Massachusetts Medigap Plan Pays Part A deductible ($1216)Pays all copayments for Inpatient hospital care, days 1- 150Covers additional 365 Lifetime Hospital days paid in fullCovers Part B excess charges (usually 20%)Covers Skilled Nursing Facility coinsurance for days 21-100 ($152)Covers Part B annual deductible ($147)Covers Foreign travel- for Medicare covered services needed while traveling abroadCovers additional 120 days in Mental Health Hospital per benefit periodCovers $10 per day in Skilled Nursing coinsurance for days 101-365Monthly cost is about $175, prices vary depending on insurance company3/9/201637

Additional CoverageCovers Part A Deductible ($1,216 per benefit period)Covers Skilled Nursing Facility Coinsurance (days 21-100 $152 per day per benefit period)Covers Part B Annual Deductible ($147)Covers Foreign Travel Health Care

Benefits of Medicare Supplement 1 PolicyShared CoverageHospitalization Part A Copayments365 additional lifetime hospital days- paid in fullPart B CoinsuranceParts A and B blood- first 3 pintsLess expensiveMassachusetts Supplemental Policies Comparison3/9/201638

Type of pricingHow it's pricedWhat pricing may mean for youExamplesCommunity-rated (also called No-Age-Rated)The same monthly premium is charged to everyone who has the Medigap policy, regardless of age.Premiums are the same no matter how old you are. Premiums may go up because of inflation and other factors.Mr. Smith is 65. He buys a Medigap policy and pays a $165 monthly premium. Mrs. Perez is 72. She buys the same Medigap policy as Mr. Smith. She also pays a $165 monthly premium because with this type of policy, everyone pays the same price, regardless of age. Issue-Age-Rated PoliciesThe premium is based on the age you are when you buy (are "issued") the Medigap policy. Premiums are lower for younger buyers and wont change as you get older. Premiums may go up because of inflation and other factors. Mr. Han is 65. He buys a Medigap policy and pays a $145 monthly premium. Mrs. Wright is 72, and buys the same Medigap policy. Since she is older at the time she buys it, her monthly premium is $175. Attained-Age-Rated PoliciesThe premium is based on your current age (the age you have "attained") so your premium goes up as you get older. Premiums are low for younger buyers, but go up as you get older and can eventually become the most expensive. Premiums may also go up because of inflation and other factors. Mrs. Smith is age 65. She pays a $120 monthly premium. Her premium will go up every year. At age 66, her premium goes up to $126At age 67, her premium goes up to $132Mr. Dodd is age 72. He buys the same Medigap policy as Mrs. Smith. He pays a $165 monthly premium. His premium is higher than Mrs. Smiths because it is based on his current age. Mr. Dodds premium will go up every year. At age 73, his premium goes up to $171

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Popular Medigap Plans60% of Medigap plans are spent on Plan FPlan F is the only plan that offers 100% coverage on Part B excess charges and the Part B deductiblePlan C is the second most popular with 21%Plans B and D are about 5% each

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Examples of Medigap prices

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Step 1: Enroll in Medicare during the appropriate enrollment periodStep 2: Decide which plan is right for youOriginal Medicare

Part A Hospital InsurancePart B Medical InsuranceMedicare Advantage Plan(like an HMO or PPO)Combines Part A, Part B and usually Part D

Step 3: Decide if you need to add drug coveragePart D:Prescription Drug Coverage (if not already included)Part DPrescription Drug CoverageStep 4: Decide if you need to add supplemental coverageMedigap (Supplement Insurance Policy)If you join Medicare Advantage Plan, you dont need and cant be sold a Medigap policy3/9/201643

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Benefits to having Medicare Advantage PlansBenefits to having Original Medicare + MedigapOften charge lower copaymentsCoverage is consolidated into 1 planMonthly premiums are lowerCan include drug coverage for no extra costAdditional coverageLarger network of providers to choose fromLimits out-of-pocket expensesSafer option in long run

Medicare Advantage vs. Original Medicare + Medigap3/9/201644

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Maximization StrategiesSign up for Medicare in appropriate enrollment periodAvoids coverage gap and potential penaltySign up for Medigap within 6 month enrollment periodTo maximize Medigap optionsDetermine what benefits you needIf you are living on a fixed income and are only able to afford basic coverage, favor Plan AConsider Family HistoryIf your familys medical history is such that you want to be prepared for nursing care, consider Plan CCompare the PremiumsRemember all identical Medigap plans provide same coverage but prices may vary. Important to get cheapest priceCheck to see if your doctor is in Medicare Advantage plans networkCosts rise dramatically if you see a doctor outside of network3/9/201646

Maximization Strategies Cont.Consider Foreign TravelIf you travel overseas extensively, you can get coverage for emergency care in a foreign country with Plans C through G, M and NMedigap is for one individualYou and your significant other can have different plansSign up for a catastrophic insurance policyDo so if you are relatively healthy, live a healthy lifestyle, and currently only incur routine medical expenses that would cost less then Medigap premiums. These policies kick in when your medical bills reach a predetermined amount or consider plans K or L that have out of pocket limitsKnow how your Medigap plans are pricedPremiums may increase over time depending on how Medigap is pricedTry and work 10 years paying Medicare payroll taxesIf so, you Part A Hospital Insurance will be free3/9/201647

Maximization Strategies (Part D)Maximization tips to avoid donut hole: Know the cost of your prescription drugsUse generic brand drugsExplore different drug pricesBuy drugs in bulk or onlineDouble the dosage and split the pillCompare different prescription drug plansSwitching Pharmacies

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Medicaid

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Brief Overview of MedicaidMedicaid (along with Medicare) was created by the Social Security Amendments of 1965.It was created as an entitlement program to help states provide medical coverage for low-income families and other individuals meeting certain eligibility requirements.Each individual state manages their Medicaid services and programs. Eligibility is determined by several financial criteria, including record of employment, how much you earn, and number of financial dependents.3/9/201650

The Affordable Care Act and MedicaidThe Affordable Care Act, signed into law in March 2010, was aimed at expanding Medicaid and increasing health coverage to low-income individuals throughout America. Florida v. Department of Health and Human Services, challenged the constitutionality of the ACA, with the Supreme Court deciding that individual states had the option of whether or not to expand Medicaid. 3/9/201651

The Affordable Care Act and Medicaid (Cont.)Under the ACA, individuals up to 133% below the poverty line would quality for expanded Medicaid coverage, adding 17 million previously uninsured Americans to the program. Eliminated pre-existing categories one had to fall under to qualify previously. 3/9/201652

Financing the Affordable Care ActBefore the ACA the federal government shared Medicaid costs with individual states, with the government paying about 57% of the total amount. Per the Supreme Court decision, if individual states agreed to expand Medicaid, the federal government will cover the total cost for three years. The government foots 100% of the bill from 2014-2017, and that rate will decrease steadily until 2020 and beyond, when the government will cover 90% of the costs. 3/9/201653

States that DO NOT Expand MedicaidAt this time, 20 of the 50 US States are not expanding Medicaid coverage due to various budgetary concerns (i.e. over-enrollment bankrupting the state budget). Those states who choose not to expand Medicaid open their residents up to the ACAs mandate requiring individuals to purchase private health insurance or pay a tax.In states that forgo Medicaid expansion, residents lose exposure to better care, financial well-being, improved physical and mental health, and longevity experienced by those opt-in states.Low-income adults frequently forgo essential medical tests/treatments based solely on cost.3/9/201654

Medicaid EligibilityThe main factor in deciding if you are eligible is where your income is in relation to the federal poverty level (FPL).The FPL has been set at $22,350 for a family of four in the continental United States, while Alaska and Hawaiis FPLs are set at $27,940 and $25,710 respectively.

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Medicaid Eligibility (Cont.)The different people who are eligible for Medicaid:Children under 6 years old or pregnant women that are at or below 133 % of the FPL.Recipients of adoption or foster care assistance.All children under age 19 whose family income is at or below the FPL.Infants born to Medicaid-eligible women.Special protected groups.If your state is expanding Medicaid, residents 65 and younger who make up to 133% of the FPL. If your state is expanding Medicaid, then a single person with an income at or less than $16,105.If your state is expanding Medicaid, then a family of 4 with an income at or less than $32,913.

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Medicaid Eligibility (Cont.)If your state hasnt expanded Medicaid and you make $11,490 or more, as a single person, you will be able to buy private health insurance.If your state hasnt expanded Medicaid and you make $23,550 or more, as a family of 4, then you will be able to buy private health insurance.

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Medicaid Coverage GapIf a state hasnt expanded Medicaid and your income is below 100% of the FPL, you may end up in a coverage gap.This coverage gap occurs when your income is too high to get Medicaid under your states current rules.However, your income is also too low to qualify for help in buying private coverage in the Marketplace.3/9/201658