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Understanding Medicare

Module 1

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Lessons1. Medicare Basics2. Original Medicare Plan3. Medicare Advantage Plans (Part C)

and other Medicare plans4. Medicare prescription drug coverage

(Part D)5. Programs for people with limited

income and resources

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Medicare Basics

Module 1: Lesson 1

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Medicare BasicsLesson 1 TopicsMedicare overviewEnrollmentPart APart BMedicare plan choices

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Medicare Health insurance for people

Age 65 and olderUnder age 65 with certain disabilitiesAny age with End-Stage Renal Disease (ESRD)

Administered byCenters for Medicare & Medicaid Services (CMS)

Enroll throughSocial Security Administration (SSA) orRailroad Retirement Board (RRB)

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Applying for MedicareApply 3 months before age 65

Need not be retiredAutomatically enrolled if receive Social

Security or Railroad Retirement benefitsIf don’t already receive benefits, apply

3 months before age 65• Call SSA at 1-800-772-1213

– TTY users call 1-800-325-0778

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Medicare

Medicare hasPart A – Hospital coveragePart B – Medical coveragePart C – Medicare Advantage Plans (like

HMOs and PPOs)Part D – Prescription drug coverage

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Paying for Medicare Part A Most people receive Part A premium free People with less than 10 years of Medicare-

covered employmentCan pay a premium to get Part A

For information, call SSA1-800-772-1213TTY users call 1-800-325-0778

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Enrolling in Medicare Part B Initial Enrollment Period (IEP)

7 months beginning 3 months before age 65 General Enrollment Period (GEP)

January 1 through March 31 each yearCoverage effective July 1Premium increases 10% for each 12-month

period you were eligible but did not enroll• Pay this penalty as long as you have Part B• Limited exceptions

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Enrolling in Medicare Part B

Special Enrollment PeriodSign up within 8 months of the end of

employer or union health plan coverageNo increased premium

For questions or to enrollCall SSA or RRB

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Paying for Medicare Part B

Monthly Medicare Part B premium2006

• Most people pay $88.502007

• Most people pay $93.50• Some with higher incomes pay more

Some programs may help

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Paying the Part B Premium Taken out of your monthly payment

Social SecurityRailroad RetirementFederal Government retirement

For information about premiumsCall SSA or RRB

• Office of Personnel Management if a retired Federal employee

May be billed every 3 months Medicare Easy Pay

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Part A Helps Pay for

Hospital inpatient careSkilled nursing facility (SNF) careHome health careHospice careBlood

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Hospital StaysCovered services

Semi-private roomMealsGeneral nursingOther hospital services and supplies

Includes care in critical access hospitals190 days in a lifetime for inpatient mental

health care

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Skilled Nursing Facility CareMust meet all of the following conditions

Require daily skilled servicesHospital inpatient at least 3 consecutive

days Admitted to SNF within 30 days after

leaving hospitalCare is for a condition treated in the

hospitalMUST be Medicare participating SNF

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Skilled Nursing Facility Coverage Semi-private room Meals Skilled nursing care Physical, occupational, and speech-

language therapy Medical social services Medications, medical supplies/equipment Ambulance transportation Dietary counseling

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Home Health Care Covered services

Part-time skilled nursing careTherapy

• Occupational • Physical• Speech-language

Some home health aide servicesDurable medical equipment

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Home Health Care For as long as you are eligible

Limited hours per dayLimited days per week

Four conditionsDoctor must make a plan for your care at homeMust need specific skilled servicesMust be homeboundHome health agency must be Medicare-approved

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Hospice Special care for terminally ill

And family If you likely have less than 6 months to live Certification required for each “period of care”

Two 90-day periodsUnlimited 60-day periods

Hospice provider must be Medicare-approved

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Covered Hospice Services Medical equipment and supplies Drugs for symptom control and pain relief Respite care in a Medicare-certified facility

Up to 5 days each timeNo limit to number of times

Home health aide and homemaker services Social worker services Dietary counseling Grief counseling

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Part B Helps Pay for Doctors’ services Outpatient medical and surgical services and

supplies Diagnostic tests Outpatient therapy Outpatient mental health services Some preventive health care services Other medical services

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Covered Preventive Services “Welcome to Medicare”

physical exam Bone mass

measurement Cardiovascular

screenings Colorectal cancer

screenings Diabetes screenings Glaucoma tests

Mammograms (screening) Pap test/pelvic exam/

clinical breast exam Prostate cancer screening Flu shots Pneumococcal shots Hepatitis B shots Smoking cessation

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Part B Also Helps Pay forClinical laboratory testsHome health servicesDurable medical equipmentOutpatient hospital servicesBlood Ambulance service

If other transportation would endanger your health

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Medicare Plan Choices

Original Medicare PlanMedicare Advantage PlansOther Medicare plansMedicare drug plans

Medicare Prescription Drug PlansMedicare Advantage Plans and other Medicare

plans with prescription drug coverage

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Original Medicare Plan

Module 1: Lesson 2

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Original Medicare PlanLesson 2 TopicsWhat it is and how it worksYour costs in Original Medicare PlanAssignmentMedigap (Medicare Supplement

Insurance)

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Original Medicare PlanRed, white, and blue Medicare cardPart A and/or Part BGo to any provider that accepts MedicareYou pay

Part B premium• Part A free for most people

DeductiblesCoinsurance or copayments

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Medicare Card (front)

Jane Doe

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Medicare Card (back)

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Medicare Claims ContractorsFiscal Intermediary (FI)Regional Home Health Intermediary (RHHI)Medicare CarrierDurable Medical Equipment Regional

Carrier (DMERC)Medicare Administrative Contractors (MAC)

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Original Medicare Plan—Part A

Charges based on “benefit period”Inpatient hospital care and SNF servicesBegins day admitted to hospitalEnds when no care received in a hospital

or SNF for 60 days in a row You pay deductible for each benefit periodNo limit to number of benefit periods

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Paying for Hospital StaysEach benefit period in 2006 you pay

Inpatient hospital stay of 1 – 60 days• $952 total

Days 61 – 90• $238 per day

Days 91 – 150• $476 per day • 60 Lifetime Reserve Days

All costs for each day beyond 150 days

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Paying for Hospital StaysEach benefit period in 2007 you pay

Inpatient hospital stay of 1 – 60 days• $992 total

Days 61 – 90• $248 per day

Days 91 – 150• $496 per day • 60 Lifetime Reserve Days

All costs for each day beyond 150 days

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Skilled Nursing Facility Care Each benefit period in 2006 you pay

Days 1 – 20• $0

Days 21 – 100• $119 per day in 2006• $124 in 2007

All costs after 100 days Must meet requirements for Medicare-covered

stayDoes NOT include custodial care

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Paying for Home Health Care

In the Original Medicare Plan you payNothing for covered home health care

services20% of the Medicare-approved amount for

covered durable medical equipment

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Paying for Hospice Care

In the Original Medicare Plan you payUp to $5 for prescription drugs5% for inpatient respite care

• Amount can change each year

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Paying for Part B In the Original Medicare Plan you pay

Monthly Part B premium• $88.50 in 2006• $93.50 in 2007

Yearly deductible• $124 in 2006• $131 in 2007

20% coinsurance for most servicesSome copayments

Some programs may help

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Assignment Agreement between you, doctor, and Medicare Applies to Original Medicare Part B claims Providers who accept assignment

Can’t try to collect more than Medicare deductible and coinsurance amounts

Providers who don’t accept assignmentMay charge more than Medicare-approved amount

• Limit of 15% more for most services– Doesn’t apply to supplies

May ask you to pay entire charge at time of service

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Assignment In some cases, providers must accept

assignmentSome examples

• Medicare Part B-covered prescription drugs• Ambulance providers

Doctors/providers generally have to file claimMay have to file own claim for Part B-covered

drugs or supplies• If supplier or pharmacy not enrolled in Medicare

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Private ContractsAgreement between you and doctor

Original Medicare Plan will not payMedigap will not payOther Medicare plans will not payYou will pay chargesNo claim should be submittedCannot be asked to sign in an emergency

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Therapy Limits $1,740 cap

Effective January 1, 2006Combined physical therapy and speech-language

pathology servicesSeparate cap for occupational therapy

Exceptions allowed If medically necessaryCertain diagnoses get automatic exception Some situations justify automatic exception

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What Is Medigap? Health insurance policies

• Sold by private insurance companies• Follow Federal and state laws that protect you• Must say “Medicare Supplement Insurance”• Cover “gaps” in Original Medicare Plan • 12 standardized policies, plans A – L

• Except in Massachusetts, Minnesota, Wisconsin• Costs may vary

• By plan• By company• Where you live

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How Medigap Works Only works with Original Medicare

Don’t need Medigap policy in • Medicare Advantage Plan • Other Medicare plans

Can go to any doctor, hospital, or provider that accepts MedicareExcept with a Medigap SELECT policy

You pay a monthly premium

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Medicare Advantage Plans and Other Medicare Plans

Module 1: Lesson 3

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Medicare Advantage PlansLesson 3 TopicsWhat are Medicare Advantage Plans

and other Medicare plansWho can joinHow plans workJoining and switching plans

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What Are Medicare Advantage Plans?Health plan options approved by Medicare Run by private companies Part of the Medicare program

Sometimes called “Part C”

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Medicare Advantage PlansMedicare Health Maintenance

Organization (HMO)Medicare Preferred Provider

Organization (PPO)Medicare Private Fee-for-Service (PFFS)Medicare Special Needs Plans (SNPs)Medicare Medical Savings Account (MSA)

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Other Medicare Plans

Medicare Cost PlansDemonstrations/Pilot ProgramsPrograms of All-inclusive Care for the

Elderly (PACE)

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Who Can Join?

Eligibility requirementsLive in plan’s service areaHave Medicare Part AHave Medicare Part BNot have ESRD at time of enrollment

• Some exceptions

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How Do Medicare Advantage Plans Work? Generally get all Medicare-covered services

through the plan Can include prescription drug coverage May have to see certain doctors or go to

certain hospitals to get care Benefits and cost-sharing may be different

from those in Original Medicare Plan

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Out-of-Pocket Costs

Generally must still pay Part B premiumSome plans may pay all or part

May pay additional monthly premiumPay other out-of-pocket costs

Different from Original Medicare PlanVary from plan to plan

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In a Medicare Advantage Plan

Still in Medicare program Still have Medicare rights and protections Still get all regular Medicare-covered services May get extra benefits

Such as vision, hearing, or dental care May be able to get prescription drug

coverage

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Medicare HMO PlansCopayment amounts set by planGenerally must get care and services

from plan’s networkUse doctors and hospitals that join the plan May have to pay in full for care outside

plan’s network• Covered if emergency or urgently needed care• Point-of-Service option allows visits to “out-of-

network” providers

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Medicare HMO Plans (cont’d)

May need to choose primary care doctorUsually need a referral to see a specialistDoctors can join or leave

May get Medicare drug coverage

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Medicare PPO PlansCan see any doctor or provider that

accepts MedicareDon’t need referral to see specialistDon’t need referral to see out-of-network

provider Copayment amounts set by plan

• Will usually pay more for out-of-network care

May get Medicare drug coverage

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Medicare PFFS Plans Can see any Medicare-approved doctor or

hospital that accepts the planCan get services outside service areaDon’t need referral to see a specialistPlan sets copayment amounts

Can get emergency care anywhereWithout prior approval

If offered, can get Medicare prescription drug coverageIf not offered, can join a Medicare Prescription

Drug Plan

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Medicare Special Needs Plans (SNPs) May limit membership to people

In certain institutions (like a nursing home)Eligible for both Medicare and MedicaidWith certain chronic or disabling conditions

Designed to provide Special expertise of providersFocused care management

Available in limited areas Must provide prescription drug coverage

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Medicare MSA Plans Will be offered beginning in 2007 Similar to Health Savings Account plans Have two parts

1. Medicare Advantage Plan with high deductible• Pays covered costs after you meet annual deductible

– Deductible varies by plan

2. Medical Savings Account • Medicare deposits money the person may use

– To pay health care costs

MSA demonstration available in some areas

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Medicare Cost Plans Available in limited areas Similar to Medicare HMO Plans

Except out-of-network services covered under Original Medicare Plan

Can join any time plan accepts new members Can leave at any time Prescription drug coverage may be offered

If not offered, can join a Medicare Prescription Drug Plan

Plans may differ for some rules

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Medicare Demonstrations/Pilot Programs Special projects

Test improvements in Medicare coverage, payment, and quality of care

Eligibility usually limitedSpecific group of peopleSpecific area of country

ExamplesMedicare Advantage Plan for ESRD patientsNew Medicare preventive services

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Medicare PACE Plans Programs of All-inclusive Care for the Elderly Combine medical, social, and long-term care

services for frail elderly peopleInclude prescription drug coverageMight be better choice than nursing home

Only available in states that offer it under Medicaid

Qualifications vary from state to stateContact state Medical Assistance office to see if

you qualify

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When Can You Join?You can join a Medicare Advantage Plan

or other Medicare planWhen first eligible for Medicare

• Initial Enrollment PeriodSpecific enrollment periods

• Annual Coordinated Election Period• Medicare Advantage Open Enrollment Period• Special Enrollment Periods

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When Can You Switch?Annual Coordinated Election PeriodMedicare Advantage Open Enrollment

PeriodSpecial circumstances

Move out of the plan’s service area and can’t stay in the plan

Plan leaves Medicare programOther special situations

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Annual Coordinated Election PeriodNovember 15 – December 31

Can choose new planNew plan starts January 1 (in most

cases)Plan must accept new members

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Medicare AdvantageOpen Enrollment Period January 1 – March 31, 2007 Same period each year Change effective first day of following month Cannot be used to start or stop Medicare

drug coverage

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Medicare Advantage PlanOpen Enrollment Period LimitsIf coverage is Can use OEP to

getCannot use OEP to get

Medicare Advantage Plan with prescription drug coverage (MA-PD)

MA-PD orOriginal Medicare and PDP

MA-only orOriginal Medicare only(Exception: PFFS and PDP)

Medicare Advantage Plan with no prescription drug coverage (MA-only)

MA-only orOriginal Medicare only

MAPD orOriginal Medicare and PDP

Original Medicare Plan and a prescription drug plan (PDP)

MA-PD MA-only orA different PDP to use with Original Medicare

Original Medicare Plan only MA-only MA-PD orOriginal Medicare and PDP

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Medicare Prescription Drug Coverage

Module 1: Lesson 4

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Lesson 4 Topics

OverviewEligibility and enrollmentExtra help

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Prescription Drug Coverage

Coverage began January 1, 2006Available for all people with Medicare Provided through

Medicare Prescription Drug PlansMedicare Advantage Plans and other

Medicare plans

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Prescription Drug CostsCosts vary by planMost people will pay

Monthly premiumDeductibleCopayments or coinsuranceVery little after $3,850 out-of-pocket in 2007

Extra help available for people with limited income and resources

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Eligibility and Enrollment

You mustHave Medicare Part A, Part B, or bothLive in plan’s service areaEnroll in a Medicare prescription drug plan

to get coverage

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Enrollment PeriodsInitial Enrollment Period (IEP)

7 months beginning 3 months before the first month of Medicare eligibility

Can change plansAnnual Coordinated Election Period

• November 15 – December 31 each yearSome special enrollment periods available

Some people are enrolled automatically

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Late Enrollment PenaltyPeople who wait to enroll after their IEP

Pay additional 1% of base beneficiary premium

• For every month eligible and not enrolled• For as long as they have Medicare drug

coverageExcept those with other creditable drug

coverage• Coverage at least as good as Medicare

prescription drug coverage

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Special Enrollment Periods For people who

Permanently move out of plan’s service areaLose creditable prescription drug coverage Enter, reside in, or leave a long-term care facility

• Like a nursing homeHave Medicaid or are in a Medicare Savings

Program• Have a continuous special enrollment period

Have other exceptional circumstances

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Extra Help Help with drug plan costs for people with

limited income and resources Eligibility determined by SSA or state Income and resources are counted Some groups are automatically eligible

People with Medicare and• Medicaid• Supplemental Security Income only• Medicare Savings Programs

Everyone else must apply

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Income and Resource Limits Income

Below 150% Federal poverty level• $1,225 per month for an individual* or• $1,650 per month for a married couple*• Based on family size

ResourcesUp to $11,500 (individual)Up to $23,000 (married couple)

• Includes $1,500/person funeral or burial expenses• Counts savings and stocks• Does not count home you live in

*Higher amounts for Alaska and Hawaii

2006 amounts

2006 amounts

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How to Apply for Extra Help

Multiple ways to applyPaper applicationwww.socialsecurity.govState Medical Assistance officeLocal organization

You or someone on your behalf can apply

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Drug Plan Costs for People with Extra Help

Those below Federal poverty level save over 95% on average

People with lowest income and resourcesPay no premiums or deductiblesHave small or no copayments

Those with slightly higher income and resourcesHave a reduced deductiblePay a little more out of pocket

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Programs for People with Limited Income and

Resources

Module 1: Lesson 5

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Lesson 5 Topics

MedicaidMedicare Savings Programs (MSP)Help for people living in U.S. territories

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Medicaid Federal-state health insurance program

People with limited income and resourcesCertain people with disabilities

If eligible, most health care costs covered Eligibility determined by state Application processes and benefits vary Office names vary

Social ServicesPublic AssistanceHuman Services

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Medicare Savings ProgramsHelp from Medicaid paying Medicare

premiumsFor people with limited income and

resourcesMay also pay Medicare deductibles and

coinsurancePrograms include

• Qualified Medicare Beneficiary (QMB)• Specified Low-income Medicare Beneficiary

(SLMB)• Qualifying Individual (QI)

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Programs in U.S. Territories Help people pay their Medicare costs U.S. territories

Puerto RicoVirgin IslandsGuamNorthern Mariana IslandsAmerican Samoa

Programs vary Contact state Medical Assistance office

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If you think you might qualify…

1. Review guidelines2. Collect your personal documents3. Get more information

Call your state Medical Assistance office Call your SHIP Call your local Area Agency on Aging

4. Complete application with state Medical Assistance office

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Module 1 Lessons

1. Medicare Basics2. Original Medicare Plan3. Medicare Advantage Plans (Part C) and

other Medicare plans4. Medicare prescription drug coverage

(Part D)5. Programs for people with limited income

and resources

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For More Information1-800-MEDICARE (1-800-633-4227)

TTY users should call 1-877-486-2048Medicare & You handbookOther Medicare publicationswww.medicare.govwww.cms.hhs.govYour local State Health Insurance

Assistance Program (SHIP)

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Thanks for your attention!