Medicare Overview

Welcome to Medicare!Barbara Parrott McGinity, LMSWTexas SMP/Senior Medicare PatrolBetter Business Bureau Education Foundation

Welcome to Medicare! This short presentation is designed to give you an overview of the Medicare program—and to let you know where you can get more information.Note: This training module was developed and approved by the Centers for Medicare & Medicaid Services (CMS), the Federal agency that administers Medicare and Medicaid. The information in this module was correct as of April 2009. To check for an updated version of this training module, visit www.cms.hhs.gov/NationalMedicareTrainingProgram/TL/list.asp on the web.This set of National Medicare Training Program materials is not a legal document. The official Medicare program provisions are contained in the relevant laws, regulations, and rulings.4/11/20102

4/11/20103What Is Medicare?Health insurance forPeople 65 years of age and olderPeople under age 65 with certain disabilitiesPeople of all ages with End-Stage Renal Disease Managed by Centers for Medicare & Medicaid Services (CMS)Sign up with Social Security or Railroad Retirement Board (RRB)

Medicare is a health insurance program for:People age 65 and olderPeople under age 65 with disabilities who have been getting Social Security disability benefits for a set amount of time (24 months in most cases)People with Amyotrophic Lateral Sclerosis (ALS), also known as Lou Gehrig’s Disease, automatically get Medicare Part A (Hospital Insurance) and Medicare Part B (Medical Insurance) the month their disability benefits begin.People of all ages with End-Stage Renal Disease (ESRD) (people who have permanent kidney failure and need dialysis or a kidney transplant)President Lyndon Johnson signed the bill for the Medicare and Medicaid programs into law on July 30, 1965. Medicaid began January 1, 1966, and Medicare began July 1, 1966. Medicare is the nation’s largest health insurance program, currently covering about 44 million Americans.The Medicare program is managed by the Centers for Medicare & Medicaid Services (CMS). However, most people sign up for Medicare with the Social Security Administration. People retired from the railroad sign up with the Railroad Retirement Board4/11/20104

4/11/20105Applying for MedicareApply 3 months before age 65Don’t have to be retiredContact Social SecurityEnrollment automatic if you get Social Security or Railroad Retirement benefitsMedicare.gov Search Tool: Find Out if You Are Eligible for Medicare and When You Can Enroll

4/11/20106Social Security tells people it is best to apply for Medicare 3 months before age 65. You don’t have to be retired to get Medicare. The retirement age for full Social Security benefits is slowly going up to age 67, but you can still get full Medicare benefits at age 65.You can’t get Medicare benefits before age 65 unless you have a disability or End-Stage Renal Disease.If you are already receiving Social Security benefits (for example, getting early retirement), you will be automatically enrolled in Medicare without having to apply again. You will get a Medicare card and other information about 3 months before age 65 or before your 25th month of disability benefits.

4/11/20107Medicare Coverage BasicsPart A (Hospital Insurance)Part B (Medical Insurance)Part C (Medicare Advantage Plan)(like an HMO or PPO)Part D (Medicare Prescription Drug Plan)

Medicare has the following parts:Part A helps pay for inpatient hospital stays but also helps cover skilled nursing care, home health care, and hospice care.

Part B helps cover medically-necessary services like doctors visits and outpatient care. Part B also covers some preventive services including screening tests and shots, diagnostic tests, some therapies, and durable medical equipment like wheelchairs and walkers.

Part C is another way to get your Medicare Benefits. It combines Parts A and B, and sometimes Part D (prescription drug coverage). Medicare Advantage Plans are managed by private insurance companies approved by Medicare. These plans must cover medically-necessary services. However, plans can charge different copayments, coinsurance, or deductibles for these services.

Part D is drug coverage that helps pay for outpatient prescription drugs.4/11/20108

4/11/20109Medicare Part AMost people don’t pay a monthly premium for Part APeople with less than 10 years of Medicare-covered workCan still get Part AWill pay a premiumFor information about Part A eligibilityCall Social Security1-800-772-1213TTY users call 1-800-325-0778

Most people don’t have to pay a monthly payment (premium) for Medicare Part A because they or their spouse paid Medicare or FICA taxes while they were working. (FICA stands for "Federal Insurance Contributions Act." This is the tax withheld from your salary, or that you pay from your self-employment income, that helps pay for the Social Security and Medicare programs.)If you and your spouse did not pay Medicare taxes while you were working, or did not work long enough (10 years in most cases) to get premium-free Part A, you may still be able to get Part A by paying a monthly premium. In 2009, the Part A premium is $244 (for a person who has worked 30-39 quarters) or $443 (for a person who has worked less than 30 quarters) in Medicare-covered employment.For information on Part A eligibility, enrollment, or premiums, call Social Security at 1-800-772-1213. TTY users should call 1-800-325-0778.4/11/201010

4/11/201011Enrolling in Medicare Part BYou choose whether or not to enroll in Part BInitial Enrollment Period (IEP)7 months, starting 3 months before month eligibleGeneral Enrollment Period (GEP)January 1 through March 31 each yearCoverage begins July 1Premium penalty, in most casesSpecial Enrollment PeriodSign up within 8 months of the end of employer or union health plan coverageNo increased premium

You can choose whether or not to enroll in Medicare Part B (Medical Insurance). You will pay a monthly premium for Medicare Part B, which is $96.40 in 2009.In 2009, people with annual incomes over $85,000 if you file an individual tax return or over $170,000 if you are married filing jointly, pay these higher premiums. These amounts change each year. Most people still pay the standard Part B premium.)You can sign up for Part B any time during a 7-month period that begins 3 months before the month you become eligible for Medicare. This is called the Initial Enrollment Period (IEP).If you don’t take Part B when you are first eligible, you may have to wait to sign up during a General Enrollment Period (GEP). This period runs from January 1 through March 31 of each year, with coverage beginning July 1 of that year. If you wait until after you are first eligible to get Part B, you will also have to pay a premium penalty of 10% for each full 12-month period you could have had Part B but didn’t sign up for it, except in special cases. In most cases, you will have to pay thispenaltyfor as long as you have Part B.4/11/201012

4/11/201013Paying the 2010 Part B Premium

People generally pay a monthly premium for Medicare Part B. For most people, the Part B premium is $96.40 in 2009. If you can’t afford to pay the Part B premium, there are programs that may help, which will be discussed later in this module. Some people with higher annual incomes pay a higher Part B premium. These amounts can change each year. In 2009, if the modified adjusted gross income for an individual is: $85,001 - $107,000, the Part B premium is $134.90 per month

$107,001 - $160,000, the Part B premium is $192.70 per month

$160,001 - $213, the Part B premium is $250.50 per month

Greater than $213,000, the Part B premium is $308.30 per monthThe income ranges for joint returns are double that of individual returns. Social Security uses the income reported on your most recent tax return to determine the Part B premium. For example, the income reported on a 2007 tax return filed in 2008 is used to determine the monthly Part B premium in 2009. Contact Social Security if you filed an amended return or your income has gone down. For more information about premiums based on income, call Social Security at 1-800-772-1213.Remember that this premium may be higher if you did not choose Part B when you first became eligible. The cost of Medicare Part B may go up 10% for each 12-month period that you could have had Part B but did not take it. An exception would be if you or your spouse is still employed and you are covered by a group health plan through that employment. In that case, you could delay enrolling in Part B without a penalty.4/11/201014

4/11/201015Original MedicareGo to any health care provider that accepts MedicareFor Part A services in 2010, you pay$1,100 deductible for hospital stays up to 60 daysAdditional costs after 60 daysDifferent costs for other Part A servicesFor Part B services in 2010, you pay$155 annual deductible20% coinsurance for most Part B servicesSome programs may help with costs

In Original Medicare, you may go to any doctor, specialist, hospital, or other health care provider that accepts Medicare.While most people don’t pay a premium for Part A, there is a Part A deductible for inpatient hospital stays. The deductible is the amount you must pay for health care before Medicare begins to pay. There is a deductible of $1,068 in 2009 for hospital stays up to 60 days, and higher costs for longer stays. Costs are different for other Part A services.For Part B, you pay the monthly premium, $96.40 in 2009, and the Medicare Part B deductible, which is $135 in 2009. This means in 2009 you will pay the first $135 of your Medicare-approved Part B medical services before Medicare Part B starts paying for care. If you need blood, you must pay for the first three pints.These amounts can change every year.You also pay some copayments or coinsurance for Part B services. The amount is different for different services but is 20% in most cases.After you get health care services, you get a Medicare Summary Notice (MSN) showing Medicare’s payments. This notice lists the service you received, what was charged, what Medicare paid, and how much you may be billed.If you have other health insurance coverage, such as a plan from your former job, that plan may cover some or all of these costs. In a few minutes we’ll talk about private insurance policies called Medigap that also may help with these costs. If you can’t afford to pay these costs, there are programs that can help, which we’ll talk about later.4/11/201016

4/11/201017MedigapHealth insurance policySold by private insurance companiesMust say “Medicare Supplement Insurance”Covers “gaps” in Original MedicareDeductibles, coinsurance, copaymentsDoes not work with Medicare Advantage PlansYou can buy a Medigap policyWithin 6 months of enrolling in Part BMust be age 65 or older

We’ve talked about Original Medicare. Now let’s talk about Medigap.Original Medicare pays for many health care services and supplies, but it doesn’t pay all of your health care costs. A Medigap policy is a health insurance policysold by private insurance companies to fill the “gaps” in coverage under Original Medicare, like deductibles, coinsurance, and copayments. Some Medigap policies also cover benefits that Medicare doesn’t cover, like emergency health care when you travel outside the United States. The insurance companies that sell these policies must follow Federal and state laws that protect you. A Medigap policy must be clearly identified as “Medicare Supplement Insurance.”A Medigap policy only works with Original Medicare. If you join a Medicare Advantage Plan or other Medicare plan, your Medigap policy can’t pay any deductibles, copayments, or other costs you pay under your Medicare plan.In all states except Massachusetts, Minnesota, and Wisconsin, a Medigap policy must be one of 12 standardized plans (A - L) so you can compare them easily. Each plan has a different set of benefits. The benefits in any Medigap Plan A – L are the same for any insurance company. It’s important to compare Medigap policies, because costs can vary for the same coverage. In some states, you may be able to buy another type of Medigap policy called Medicare SELECT (a Medigap policy that requires you to use specific hospitals and in some cases, specific doctors to get full benefits).(Note: insurance companies don’t have to offer every Medigap plan. Each company decides which Medigap policies it will sell and the price for each plan, with state review and approval.)4/11/201018

4/11/201019Medicare Advantage PlansHealth Maintenance Organization (HMO) PlansSome have Point-of-Service optionPreferred Provider Organization (PPO) PlansPrivate Fee-for-Service (PFFS) PlansSpecial Needs PlansMedicare Medical Savings Account (MSA) PlansSince 2007Medicare.gov Search Tool: Compare Health Plans and Medigap Policies in Your Area

There are other ways to get your Medicare benefits. You can choose to join a Medicare Advantage Plan or some other Medicare plan.There are five types of Medicare Advantage Plans:Health Maintenance Organizations (HMO) Plans— In general, you must get health care from providers in the plan’s network. Some HMO Plans let you choose a Point-of-Service option, where you can go to doctors and hospitals that aren’t part of the plan, but it may cost more.Preferred Provider Organization (PPO) Plans—Similar to an HMO plan but you can also see out-of-network doctors for covered services and you don’t need a referral to see a specialist. Going to a provider that isn’t part of the plan will usually cost more.Private Fee-for-Service Plans—You can go to any Medicare-approved doctor or hospital that accepts the plan payment terms for covered services. The private company decides how much it will pay and how much you pay for services. Extra benefits are often offered for an extra premium.Special Needs Plans—Only some groups of people can join a Special Needs Plan, including people in some long-term care facilities (like a nursing home); people who have both Medicare and Medicaid; and people who have certain chronic or disabling conditions. Special Needs Plans are only available in limited areas.Medicare Medical Savings Account Plans—These plans have two parts. One part is a Medicare Advantage Plan with a high deductible, and one part is a Medical Savings Account into which Medicare deposits money you can use to pay health care costs.4/11/201020

4/11/201021Medicare Prescription Drug CoverageAll people with Medicare can join a planProvided through PDP, MAPD, EmployersInitial Enrollment Period (IEP)7 mo. (Starts 3 mo. before month eligible for Medicare)Annual Coordinated Election Period (AEP)November 15 through December 31 each yearCan join, drop, or switch coverage (Effective Jan 1st)Special Enrollment Period (SEP)Medicare.gov Search Tool: Compare Medicare Prescription Drug Plans

Now all people with Medicare can join a plan that covers prescription drugs.If you have either Medicare Part A (Hospital Insurance), or Medicare Part B (Medical Insurance), or both Part A and Part B, you can join a Medicare drug plan. You must join a plan to get Medicare prescription drug coverage. However, people who live outside the U.S. or who are in jail may not join a plan and can’t get coverage.CMS has contracts with private companies that offer Medicare Prescription Drug Plans. These companies work with the drug companies to get lower drug prices for the people who join their plans. You may also get Medicare drug coverage through a Medicare Advantage Plan or other Medicare plan if you are enrolled in one. Some employers and unions may provide Medicare prescription drug coverage to their retirees through their group health plans. (Note: Medigap policies with prescription drug coverage aren’t Medicare drug plans.)It’s important to understand that Medicare prescription drug coverage isn’t automatic. So while anyone with Medicare can get this coverage, you must sign up with a plan to get it.4/11/201022

Overview of Medicare Part D Standard Benefit, 2010CatastrophicMedicare Pays 80%Enrollee Pays 5%Plan Pays15%Total Drug Spending $6,440TrOOP Spending $4,550Coverage Gap ($3,610) Enrollee Pays 100%$3,051 Coverage GapTotal Drug Spending$2,830TrOOP Spending $940Enrollee Pays 25%Plan Pays 75%Total Drug Spending$310TrOOP Spending$310DeductibleDeductible $310Enrollee Pays 100%$0$023.

4/11/201024Extra Help With Drug CostsIncome and Resource LimitsIncome

Below 150% Federal poverty level

Medicare Overview

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