1. By: Sean McCann
3/9/2016 1

2. What is Medicare
 Medicare is a federal health insurance program
 For Americans age 65 or older and for young
Americans with disabilities
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3. Four types of Coverage
 Part A Hospital
Insurance
 Part B Medical
Insurance
 Part C Medicare
Advantage Plans
 Part D Prescription
Drug Coverage
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4. Step 1: Enroll in Medicare during the appropriate enrollment period
Step 2: Decide which plan is right for you
Original Medicare
Part A
Hospital
Insurance
Part B
Medical
Insurance
Medicare 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 coverage
Part D:
Prescription Drug Coverage (if
not already included)
Part D
Prescription Drug Coverage
Step 4: Decide if you need to add
supplemental coverage
Medigap (Supplement
Insurance Policy)
If you join Medicare Advantage
Plan, you don’t need and can’t
be sold a Medigap policy
3/9/2016 4

5. Contributions
 The 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 Fund
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6. How the Hospital Insurance Trust
Fund is funded
 The Hospital Insurance Trust Fund income is
primarily generated from payroll taxes from current
workers
 Employees and employers each pay 1.45 percent of
wage earnings
 Self-employed people pay 2.9 percent of wage earnings
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7. How the Supplementary Medical
Insurance Trust Fund is funded
 The Supplementary Medical Insurance Trust Fund
income is generated from beneficiary premiums and
federal general revenues
 Beneficiary premiums cover 25 percent of the Trust
Fund
 Federal general revenues cover 75 percent of the Trust
Fund
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8. 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 amount
 If you don’t have Social Security, you need to apply
during the different enrollment periods
3/9/2016 8

9. Enrollment Period When It Occurs Who is impacted Helpful Hint
Initial 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 65
Special 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 31
Those 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 coverage
Missing this enrollment
deadline may limit your options
and lead to penalties.
3/9/2016 9

10. Penalties for late enrollment
Part B
Monthly
penalty
Part D
Monthly
Penalty
Part B
Annual
penalty
Part D
Annual
Penalty
Total
Annual
Penalties
Lifetime
Penalty
Amounts
1 Year late
enrollment
$10.50 $3.90 $126 $46.80 $172.80 $3,283.20
3 years late
enrollment
$31.50 $11.70 $378 $140.40 $518.40 $8,812.80
5 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 85
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11. What is not Covered by Medicare
 Certain services such as long-term care, acupuncture,
cosmetic surgery, routine dental care and routine
vision care are not covered by Medicare
 These services may be covered through part C
Medicare Advantage, though an additional premium
may be charged
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12. Four types of Coverage
 Part A Hospital
Insurance
 Part B Medical
Insurance
 Part C Medicare
Advantage Plans
 Part D Prescription
Drug Coverage
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13. Medicare Hospital Insurance
(Part A)
 It helps pay for inpatient hospital care, skilled nursing
care, and hospice care
 No physical exam is required
 You may go to any hospital that takes Medicare
 No referral is needed
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14. Medicare Hospital Insurance
(Part A) Costs
 Usually there is no premium if you or your spouse paid
Medicare taxes while working
 Deductible, coinsurance and copayments apply
 Some people who do not qualify for premium-free coverage
can pay a premium to obtain it
 For 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
3/9/2016 14

15. Inpatient Hospital Care (Part A)
 Eligible if:
1. Doctor makes official
order which says you
need 2 or more
midnights of medically
necessary inpatient
hospital care to treat
illness or injury
2. Need type of care only
given in hospital
3. Hospital accepts
Medicare
 Covers:
 Hospital services*
 Semi-private rooms
 Meals
 General nursing
 Drugs as part of inpatient
treatment
 Does not cover:
 Private room
 Private duty nursing
 T.V or telephone in room
 Personal 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 system3/9/2016 15

16. Part A hospital inpatient costs
 You pay:
 $1,216 deductible for each benefit period
 Days 1-60: $0 copayment for each benefit period
 Days 61-90: $304 copayment per day of each benefit
period
 Days 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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17. Requirements for Skilled Nursing
Facility (SNF) Part A
 Eligible if:
 been a hospital inpatient at least 3 days not including
day of discharge
 Doctor has decided you need daily skilled care given by
skilled nursing staff
 Skilled Nursing Facility is certified by Medicare
 You need these skilled services for a medical condition
that was either:
 A hospital related medical condition
 A condition that started while you were getting care in the
skilled nursing facility for a hospital related medical condition
3/9/2016 17

18. Costs in Original Medicare for
Skilled Nursing Facilities
 Days 1–20: $0 for each benefit period
 Days 21–100: $152 copayment per day of each benefit
period
 Days 101 and beyond: all costs
If break in skilled care lasts more then 30 days, you need
a new 3-day hospital stay
If break in skilled care lasts at least 60 days in a row this
ends your current benefit period and renews your SNF
benefits
3/9/2016 18

19. Hospice and respite care Part A
 Eligible if:
 You have part A Medicare
 Your doctor certifies that you are terminally ill and have 6 or
less months to live
 You accept palliative care instead of care to cure illness
 You sign a statement choosing hospice care instead of routine
Medicare covered benefits for your terminal illness
3/9/2016 19

20. Costs for Hospice and Respite care
under Original Medicare
 $0 copayment for hospice care
 May need to pay a copayment of no more than $5 for
each prescription drug and other similar products for
pain relief and symptom control
 May need to pay 5% of Medicare approved amount for
inpatient respite care
 Room and Board
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21. Medicare Medical Insurance
(Part B)
 Covers two types of services:
1. Medically necessary services-services or supplies that are needed to
diagnose or treat your medical condition and that meet accepted
standards of medical practice
2. Preventive services-healthcare to prevent illness (like the flu) or
detect it at an early stage, when treatment is most likely to work best
 Covers things like:
 Clinical research
 Ambulance services
 Durable medical equipment
 Outpatient mental health
 Getting a second opinion before surgery
 Drugs given to you by a hospital
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22. Medicare Medical Insurance Costs
 For 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 deductible
 You generally pay 20% of the Medicare approved amount
for the doctor or other health care provider's services
 Copayment for each service you get in an outpatient
hospital
 Late enrollment penalty may apply
 10% increase on monthly premium for every 12 months period
you could have had part B Medicare
3/9/2016 22

23. Part B premiums by income
File Individual
Tax Return
File joint tax
return
File married &
separate tax
return
Premium
amount you pay
in 2014
$85,000 or less $170,000 or less $85,000 or less $104.90
Above $85,0000 up
to $107,000
above $170,000 up
to $214,000
N/A $146.90
Above $107,000 up
to $160,000
above $214,000 up
to $320,000
N/A $209.80
Above $160,000 up
tp $214,000
above $320,000 up
to $428,000
above $85,000 and
up to $129,000
$272.70
Above $214,000 above $428,000 above $129,000 $335.70
**Less then 5% of people pay a higher monthly premium
3/9/2016 23

24. 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 programs
 Different 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 network
 Must pay monthly premium for Medicare Advantage Plans,
along with Part B Premiums
3/9/2016 24

25. Medicare Advantage Plan Cont.
 Coverage for routine hearing exams and vision care
 Allowances toward eyewear
 Routine preventive dental care
 Prevention and wellness programs
 Worldwide coverage for emergency care
 Some include Prescription Drug plans (Part D)
 Have out-of-pocket limits
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26. Typical Health Maintenance
Organization (HMO)
 Least expensive and most restrictive Medicare Advantage
plan
 Restrictive in the doctors and other health care providers
available to patient, must be part of network or you pay
entire bill
 Has to have a primary care physician in which the patient
sees first at all times
 Need a referral from patient care physician to see other
doctor
 Need to get prior approval from primary care physician for
certain medical services
3/9/2016 26

27. Typical Preferred Provider
Organization (PPO)
 More attractive and more expensive
 Allows a member to see physicians and other providers
not in HMO network and allows for self-referring
 If you go outside the plan or self-refer the plan pays
smaller part of bill then if you followed the rules
 Member pays a higher premium for the plan and a
higher copayment each time the option is used
 Also pay a deductible which is usually less then a
traditional insurance plan
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28. 3/9/2016 28

29. Medicare Prescription Drug
Insurance (Part D)
 Protection is provided for people with high drug costs
 Both brand-name and generic prescription drugs are
covered.
 It is offered through private insurance companies
approved by and under contract with Medicare
 About 40% of Americans age 65 and older take 5 or
more prescription drugs a month
3/9/2016 29

30. Prescription Drug Insurance Costs
 In general, you pay a monthly premium, along with
cost-sharing amounts for each prescription
 Plans have a coverage gap–after 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.
3/9/2016 30

31. Part D Premium based on Income
File individual
tax return
File joint tax
return
File married &
separate tax
return
Monthly
premium for 2014
$85,000 or less $170,000 or less $85,000 or less your plan
premium
above $85,000 up
to $107,000
above $170,000 up
to $214,000
N/A $12.10 + your plan
premium
above $107,000 up
to $160,000
above $214,000 up
to $320,000
N/A $31.10 + your plan
premium
above $160,000 up
to $214,000
above $320,000 up
to $428,000
above $85,000 up
to $129,000
$50.20 + your plan
premium
above $214,000 above $428,000 above $129,000 $69.30 + your plan
premium
3/9/2016 31

32. Donut Hole Diagram
•You pay:
•100% of deductible ($310)
•25% of costs between $310
and $2,850
•47.5% for brand name
drugs and 72% for generic
drugs while in doughnut
hole (between $2,850 and
$4,550)
•5% after $4,550
3/9/2016 32

33. Brand Name Drugs vs. Generic
Drugs
Brand Name
and Strength
Brand
Name Cost
Generic
Cost
Generic Name Generic
Savings
Claravis 40 mg $1700.40 $615.00 Isotretinoin $1,085.40
Percocet 10-325
mg
$1,128.00 $52.50 Oxycodone HCI/
acetaminophen
$1,075.50
Glucophage
500mg
$67.20 $3.60 Metformin HCI $63.60
Plavix 75 mg $231.90 $13.50 Clopidogrel
bisulfate
$218.40
3/9/2016 33

34. 3/9/2016 34

35. Medigap
 Supplemental to Original Medicare, Parts A and B
 Designed to fill gaps in coverage such as copayments,
coinsurance, and deductibles
 Sold by private companies
 Policy covers only one person
 Medigap is guaranteed renewable even if you have
health problems
3/9/2016 35

36. Medigap Core Policy
Massachusetts
 Covers 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
3/9/2016 36

37. Supplement 1 Massachusetts
Medigap Plan
 Pays Part A deductible ($1216)
 Pays all copayments for Inpatient hospital care, days 1- 150
 Covers additional 365 Lifetime Hospital days paid in full
 Covers 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 abroad
 Covers additional 120 days in Mental Health Hospital per benefit
period
 Covers $10 per day in Skilled Nursing coinsurance for days 101-365
 Monthly cost is about $175, prices vary depending on insurance
company
3/9/2016 37

38. Benefits of Medicare
Core Policy
•Additional Coverage
1. Covers Part A
Deductible ($1,216 per
benefit period)
2. Covers Skilled Nursing
Facility Coinsurance
(days 21-100 $152 per day
per benefit period)
3. Covers Part B Annual
Deductible ($147)
4. Covers Foreign Travel
Health Care
Benefits of Medicare
Supplement 1
PolicyShared Coverage
•Hospitalization
Part A
Copayments
•365 additional
lifetime hospital
days- paid in full
•Part B
Coinsurance
•Parts A and B
blood- first 3
pints
•Less expensive
Massachusetts Supplemental Policies Comparison
3/9/2016 38

39. Type of pricing How it's priced
What pricing may mean for
you
Examples
Community-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 Policies
The premium is based on the age
you are when you buy (are
"issued") the Medigap policy.
Premiums are lower for younger
buyers and won’t 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 Policies
The 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 $126
•At age 67, her premium goes up
to $132
•Mr. 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. Smith’s
because it is based on his
current age. Mr. Dodd’s
premium will go up every year.
At age 73, his premium goes up
to $1713/9/2016 39

40. Popular Medigap Plans
 60% of Medigap plans are spent on Plan F
 Plan F is the only plan that offers 100% coverage on Part
B excess charges and the Part B deductible
 Plan C is the second most popular with 21%
 Plans B and D are about 5% each
3/9/2016 40

41. 3/9/2016 41

42. Examples of Medigap prices
3/9/2016 42

43. Step 1: Enroll in Medicare during the appropriate enrollment period
Step 2: Decide which plan is right for you
Original Medicare
Part A
Hospital
Insurance
Part B
Medical
Insurance
Medicare 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 coverage
Part D:
Prescription Drug Coverage (if
not already included)
Part D
Prescription Drug Coverage
Step 4: Decide if you need to add
supplemental coverage
Medigap (Supplement
Insurance Policy)
If you join Medicare Advantage
Plan, you don’t need and can’t
be sold a Medigap policy
3/9/2016 43

44. Benefits to having
Medicare Advantage
Plans
Benefits to having
Original Medicare +
Medigap
1. Often charge lower
copayments
2. Coverage is
consolidated into 1 plan
3. Monthly premiums are
lower
4. Can include drug
coverage for no extra
cost
5. Additional coverage
1. Larger network of
providers to choose
from
2. Limits out-of-pocket
expenses
3. Safer option in long run
Medicare Advantage vs. Original
Medicare + Medigap
3/9/2016 44

45. 3/9/2016 45

46. Maximization Strategies
 Sign up for Medicare in appropriate enrollment period
 Avoids coverage gap and potential penalty
 Sign up for Medigap within 6 month enrollment period
 To maximize Medigap options
 Determine what benefits you need
 If you are living on a fixed income and are only able to afford basic coverage, favor
Plan A
 Consider Family History
 If your family’s medical history is such that you want to be prepared for nursing
care, consider Plan C
 Compare the Premiums
 Remember all identical Medigap plans provide same coverage but prices may vary.
Important to get cheapest price
 Check to see if your doctor is in Medicare Advantage plans network
 Costs rise dramatically if you see a doctor outside of network
3/9/2016 46

47. Maximization Strategies Cont.
 Consider Foreign Travel
 If you travel overseas extensively, you can get coverage for emergency
care in a foreign country with Plans C through G, M and N
 Medigap is for one individual
 You and your significant other can have different plans
 Sign up for a catastrophic insurance policy
 Do 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
limits
 Know how your Medigap plans are priced
 Premiums may increase over time depending on how Medigap is priced
 Try and work 10 years paying Medicare payroll taxes
 If so, you Part A Hospital Insurance will be free
3/9/2016 47

48. Maximization Strategies (Part D)
Maximization tips to avoid donut hole:
 Know the cost of your prescription drugs
 Use generic brand drugs
 Explore different drug prices
 Buy drugs in bulk or online
 Double the dosage and split the pill
 Compare different prescription drug plans
 Switching Pharmacies
3/9/2016 48

49. 3/9/2016 49

50. Brief Overview of Medicaid
 Medicaid (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.
3/9/2016 50

51. The Affordable Care Act and
Medicaid
 The 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.
3/9/2016 51

52. 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.
3/9/2016 52

53. Financing the Affordable Care Act
 Before 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.
3/9/2016 53

54. States that DO NOT Expand
Medicaid
 At 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 ACA’s 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.
3/9/2016 54

55. Medicaid Eligibility
 The 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
Hawaii’s FPLs are set at $27,940 and $25,710
respectively.
3/9/2016 55

56. 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.
3/9/2016 56

57. Medicaid Eligibility (Cont.)
 If your state hasn’t 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 hasn’t expanded Medicaid and you make
$23,550 or more, as a family of 4, then you will be able
to buy private health insurance.
3/9/2016 57

58. Medicaid Coverage Gap
 If a state hasn’t 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.
3/9/2016 58