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APPRISE - Current Medicare Coverage

CURRENT MEDICARE COVERAGE

Part A: Hospital Insurance
Part A helps to cover inpatient care in the hospital, skilled nursing stays in a facility, hospice care and medically-necessary, doctor ordered part-time or intermittent home health services.

For most people, Part A is premium-free because Medicare taxes were withheld from your (or your spouse’s) earned income during your working years. However, persons with less than 10 years covered employment can purchase Part A insurance by paying a monthly premium of as much as $437 monthly in 2019.

 

You are required to pay the first $1,364 of hospital costs per benefit period (which begins when you enter a hospital or skilled nursing facility and ends when you haven’t received any further care for 60 straight days). After you pay that deductible, Medicare then pays all other costs through day 60. For extended hospital stays, there are coinsurance charges of $341 a day for days 61 through 90, and $682 a day for up to 60 additional “lifetime reserve” days.

 

If you receive care in a skilled nursing facility following a hospitalization, you are entitled to up to 20 days each benefit period. For days 21 through 100, you will pay coinsurance of $170.50 a day.

You should be aware that all of the deductible and coinsurance amounts cited above are subject to increase every year, typically by about three or four percent.

Medicare pays a lot, but beneficiaries also pay some of the costs through the various deductibles and coinsurance charges mentioned above. Many medical procedures can be extremely expensive; and even if Medicare picks up significant portions of the costs, your deductibles and coinsurance responsibilities could become quite substantial. Some or all of those expenses can be covered by other insurance. You can obtain additional coverage through a Medicare supplement/Medigap insurance policy, or choose to have your entire Medicare coverage though a Medicare Advantage plan.

 

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Part B: Medical Insurance
Part B helps cover medically necessary doctor services, outpatient care, clinical lab services, diagnostic tests (MRI, CT scan, EKG, mammogram, diabetic screenings, flu shots, etc.), therapy, home health services, emergency room services, outpatient mental health care and durable medical equipment.

 

Most persons enrolled in Part B pay a monthly premium of $135.50. Most people have the monthly premium amount deducted from their Social Security check. If your income as a single is above $85,000/year or as a married couple above $170,000/year you will pay more for Part B. Under Part B, you pay the first $185 in medical costs a year; but after reaching that deductible, Medicare will pay 80% of the Medicare Part B services. You are responsible for the other 20%.

 

Medicare consumers pay the cost of the first three pints of blood received as an outpatient, should that be necessary. Additional blood costs are divided 80%/20% (unless you or someone else donates blood to replace what you use).

 

Part B will pay for certain medications administered in a doctor’s office (for example, cancer drugs taken as outpatient treatment). Preventive services covered by Medicare include bone mass measurement, cardiovascular screening, diabetes screening, flu shots, glaucoma tests, hepatitis B shots, prostate cancer screening, pap test and pelvic exam, a pneumococcal shot, and screening mammograms.

 

If you (or your spouse) are still working and you have coverage through the employer’s or union’s group health insurance policy, you do not have to enroll in Part B because the other insurance will pay for these services. However, if/when your job-related insurance is going to end, you should enroll in Part B so that you can make a smooth transition to Medicare and not have a break in your health coverage. Some retirees continue to receive help with medical costs through group health insurance they have from a former employer or union, or through a spouse’s job. Such coverage usually is cost-effective; but often, if you ever decide to leave that plan, you cannot rejoin it later. Typically, retiree coverage will be provided through a supplemental insurance policy or a managed-care plan that may resemble (but isn’t exactly like) a Medicare-contracted plan. It is important to remember that COBRA health coverage is not considered as active working time or a retirement plan so if you do not plan to return to employment you have a time period to enroll in the Part B and not be subject to a forever penalty added to the monthly premium.

 

As stated with Part A Medicare pays a lot, but beneficiaries also pay some of the costs through the various deductibles and coinsurance charges mentioned above. Many medical procedures can be extremely expensive; and even if Medicare picks up significant portions of the costs, your deductibles and coinsurance responsibilities could become quite substantial. Some or all of those expenses can be covered by other insurance. You can obtain additional coverage through a Medicare supplement/Medigap insurance policy.

 

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Medicare Savings Program
This program may be able to help you pay for Parts A and B of Medicare. It is a Medicaid program and is jointly funded by the federal government and each state. This Medicare Savings Program is also known as “Healthy Horizons” in Pennsylvania. Various levels of assistance are possible, depending on your income; but the resource (or asset) limitations are very restrictive. (However, the resource limit is waived for beneficiaries who have dependent children living with them.)

 

The deepest level of support is provided through the Qualified Medicare Beneficiary (QMB) – Categorically Needy Program. Help is available to single persons with a monthly income of no more than $1,032 For a married couple, the income limit is $1293 a month. The program provides full Medicaid health benefits, including all Medicare-covered services (and you pay no premiums, deductibles, or coinsurance), plus providing such additional assistance as eyeglass coverage and dental care.

 

The Specified Low-Income Medicare Beneficiary (SLMB) program covers persons with monthly income no more than $1,234 with assets of no more than $7,080. The program pays the Medicare Part B premium. You can apply by mailing an application to the Montgomery County Office of Assistance. Qualifying monthly income for married couples is no more than $1,666; qualifying resources can be no more than $11,340.

 

A program called Qualified Individual 1 is for persons of slightly higher incomes. This also pays the Medicare Part B premium ($135.50 a month). To qualify, a single person’s income must be no higher than $1,382 a month, and assets are limited to $7,560. For a married couple, the monthly income must be no higher than $1,872 with an asset limit of $11,340.

 

Income limits for the various Medicare Savings Programs are revised every year, usually in March. Applications are available for these programs from the County Assistance office. Your Aging and Adult Service office, Senior Center, Apprise office or Social Security office may also have the forms. Forms are also available online at www.benefitscheckup.organd www.compass.pa.us.org

 

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Supplement/ MEDIGAP Insurance
You can supplement your Original Medicare coverage by purchasing a “Medigap” insurance policy. They are nicknamed “Medigaps” because they can pay for some or all of the deductible and coinsurance “gaps” in Medicare Parts A and B. In Pennsylvania, these policies are sold by some 40+ insurance companies, which are regulated and must be approved by the Department of Insurance.
When you purchase a Medigap policy from one of these companies, you will be charged a premium, usually payable monthly. As long as you pay your premium, the policy is guaranteed renewable no matter what changes might occur in your health conditions. Generally you must have Part A and Part B to buy a Medigap policy. The plans are standardized but the costs for the plans from different companies can vary and all plans usually go up as you get older.

 

The best time to buy a Medicare supplement policy is when you first enroll in Part B, because you can select any Medigap policy sold by any company, without regard to pre-existing health conditions. Because you may develop serious health conditions as you age, you could find it very difficult to be obtain a Medigap policy later in your life.

 

When you have Original Medicare with a Medigap supplement, you show the hospital or doctor your Medicare card and your insurance card when you receive service from them. They will submit their claims to Medicare, which will pay the appropriate Medicare-approved amount. Then, Medicare will forward the balance of the claim to your Medigap insurance company. Medigap plans are accepted by all accepting Medicare.

 

The Medigap insurance policies are standardized but the plans were revised in June of 2010. Plans E,H,I,J and high deductible J were eliminated. These plans had benefits that are now included in Medicare and an at home recovery benefit was eliminated being outdated and underutilized. Two new plans M and N were added. Plan N has a co-pay element that was not part of Medigap plans previously but may help to lower the premium cost. All Medigap plans include full coverage for Part A daily inpatient hospital coinsurance charges and all costs of hospital care after the Medicare benefit is used up. All plans also include Part B coinsurance charges, the first three pints of blood and now Part A hospice coinsurance charges for palliative drugs and respite care is included through Medicare Plan A. Plans B,C, D, F, G and M contain this core benefit and cover other gaps. Plan K, L and N must cover at least part of these basic benefit coverage gaps.

 

Pennsylvania law forbids medical service providers from charging more than the Medicare-approved amount. If you are charged in excess of those amounts, you are not liable. Any effort to collect such an excess charge should be reported to the Pennsylvania Department of Aging (1-717-783-8975). You are responsible for the 20% of the approved amount that Medicare does not pay. Your Medigap plan should pick up that 20% depending on your plan.

 

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Part C / Medicare Advantage
Medicare Advantage plans are another way to obtain additional coverage for your medical costs. You might be interested to know that this arrangement is, formally, Part C of the Medicare program! Until recently, these plans were typically composed of managed-care plans such as Health Maintenance Organizations (HMOs) and Preferred Provider Organizations (PPOs). However, they now include several new types of arrangements, known as Private-Fee-For-Service (PFFS) plans and Medical Savings Accounts (MSAs).

 

Medicare Advantage (MA) is the means by which the federal government pays private health insurance companies to provide your Part A and Part B Medicare-covered services – and often your Part D benefit as well. If you enroll in a Medicare Advantage plan, you are still in the Medicare program, but the billing arrangements for health services involve you, the service provider, and the plan’s company. No claims are forwarded to Medicare. You cannot have a Medigap and Medicare Advantage plan at the same time.

 

Managed care is the most common way that beneficiaries receive health services under Medicare Advantage. As is typical of managed-care plans, you will make copayments for most office visits. Starting a few years ago, plans also instituted co-pays for the more expensive health-care services such as hospital and skilled nursing stays, outpatient surgery, and ambulance services. However, you may receive some services that are not covered by Medicare, such as vision care, hearing services, perhaps dental care, and fitness programs or for a small fee be able to have these benefits added to your plan.

 

You have an opportunity to change your MA plan during the Open Enrollment Period that begins October 15 through December 7. Your new plan will take effect on the next January 1. Most plans charge a monthly premium, as well as co-payments for most covered services, and these costs are likely to change from year to year. You will receive an Annual Notice of Change that will tell you what changes are to be made to your plan for the following year. If you would like to consider a different plan – from the same company or from another company – this is the time you should do so.

 

The lowest-priced managed-care plans are Health Maintenance Organizations (HMOs). You are required to choose a primary care physician (PCP) who will coordinate your health care. If you need to see a specialist, your PCP must approve a referral for that service. (Nowadays, referrals are handled electronically and should not present a problem for you to obtain.) Your medical care will be restricted to service providers who are in that organization’s network; so if you go to doctors or hospitals outside the network, you will be responsible for all costs. You should make sure the doctors, hospitals, and specialists you are accustomed to seeing are in the network. However, several of the managed-care companies principally serving Montgomery County have very large networks of service providers.

 

Higher-priced managed-care plans such as Preferred Provider Organizations (PPOs) offer more flexibility in receiving services. They often are called “choice” plans. Although they also are network-based, you can receive services out of network (but you will have to pay part of the cost when you do so). As a general rule, referrals are not required. Because in-network services will cost you less, you should check to see that the physicians and hospitals you are likely to use are in the network of the managed-care organization you select.

 

Even though networks are geographic-based, if you travel outside of your HMO or PPO network area (generally, the five counties of southeastern Pennsylvania), you will be covered for emergencies or for urgently-needed care. Try to notify your doctor or call your plan as soon as it’s feasible for you to do so. Under rare circumstances, they may prefer that you return “home” when they believe you would receive better care here.

 

Check with your APPRISE counselor to see which companies offer Advantage plans in your county.

 

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Part D: Prescription Drug Insurance
Until 2006, outpatient prescription drugs were not included in Medicare. The Medicare Modernization Act that was passed in December 2003 provided for this new benefit, which took effect January 1, 2006. Participation is voluntary; but for those with even modest prescription drug needs, this program should provide significant help with the cost of medications.

 

For 2019, Part D’s “standard prescription drug program” requires that you pay a monthly premium to the company you choose to provide this benefit. You also may pay up to the first $415 in annual drug costs; but after you meet that deductible, Medicare and you will share the cost of your prescriptions, with Medicare paying 75% and you 25%. The “initial coverage limit” is $3,820 before the donut hole. When total drug costs pass that amount, you will pay the entire cost of your plan’s medications until your total out-of-pocket prescription expenses reach $5,100. This is the cost sector known as the “coverage gap”. The coverage gap is changing in 2019 to include a 37% discount on generic drugs and a 75% discount on brand name drugs during this gap period. Beyond that point you come under Part D’s “catastrophic coverage” and Medicare will pick up the bulk of the cost of your drugs (about 95%) and you will make small copayments (about 5%). Persons with very low income and limited assets may qualify for reduced or even zero premiums, low or no deductibles, and generally minimal co-pays. The plans start new again January 1.

 

You can obtain Part D insurance in ways similar to how you get additional coverage under Parts A and B. If you have a Medicare Advantage plan and also want help with the cost of your prescription medications, you must obtain your Part D coverage from your managed-care company. These are called MA-PD plans. If you have Original Medicare with a Medigap supplement, or if your MA company does not offer Part D coverage, you would purchase a so-called “free-standing” Prescription Drug Plan (PDP) from one of the companies that offer this insurance for 2019. In addition to the “standard” plan described above, most MA-PD and PDP insurers also offer “enhanced” drug coverage that might reduce or eliminate the deductible and provide some help with the “coverage gap,” but you should expect to pay higher premiums for those added benefits.

 

When you select a Medicare drug plan, consider whether the plan covers all of your prescription medications, and what will be charged for each drug. Medications that are not on a plan’s list (formulary) will not be included in the Medicare cost-sharing feature, or count toward your out-of-pocket requirement for catastrophic coverage. Therefore, study the alternative plans carefully.

Participation in Part D is not mandatory; but if you did not sign up during your initial enrollment period, and if you do not have alternate coverage that is deemed at least as good as what Medicare offers, you may face higher premiums if/when you enroll in Part D later.

 

You do not necessarily need to enroll in a Part D insurance plan, if you have another type of drug coverage, and if it is considered “at least as good as” the Medicare program’s standard plan. This is called “creditable coverage” and it would include such programs as Pennsylvania’s PACE and PACENET, the Veterans Administration, and the Defense Department’s TRICARE programs. If you have prescription insurance through a retiree plan, you should be informed whether that coverage is creditable. If you now have coverage that is creditable but should ever lose it, you will not have to pay a penalty for late enrollment in Part D – as long as you pick a Medicare drug plan within 63 days of losing your previous coverage.

 

Part D has annual open enrollment periods just as there is for Medicare-Advantage plans. It also runs from October 15 to December 7, with next year’s plan taking effect on the following January 1. You can join Part D, or change your current Part D coverage, during this period. Dual eligibles can change plans monthly.

 

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Extra Help – Low Income Subsidy (LIS)
Medicare provides extensive subsidies for those whose incomes and assets are very low. Persons who are “dual eligibles” – that is, who are enrolled in both Medicare and Medicaid – are automatically enrolled in Part D and pay no monthly premium and no deductible, and will have minimal copayments for generics and a little more for brand-name drugs. When their total drug costs reach the catastrophic threshold, they pay nothing more for their prescription medications.

 

Income qualifications are revised every year to take account of inflation. They are revised in March or April of each year and will remain in effect for the next 12 months. 2019 monthly income level for singles is $1,538 and for a married couple $2,078. Assets for a single are $14,100 and $28,150 for a married couple.

 

If you think you are eligible for Part D’s Low-Income Subsidy, submit your application to Social Security (or call 800-866-1807 to the Extra Help Center. Be sure to tell them your county number 28.) They will notify Medicare if their review of your income and assets indicates that you are qualified for “extra help” with your prescription drugs. By the way, the assets considered do not include your home or your car. Only “liquid” assets such as bank accounts, stocks and bonds, and mutual funds, are counted. (The cash value of your life insurance no longer counts as an asset). Call Social Security toll-free at 1-800-772-1213.

 

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