Topics Covered -
Medicare is the federal government's principal health care insurance program for
people 65 years of age and over. In addition, the program covers people of any age
who are permanently disabled or who have end-
Although Medicare was originally conceived as a program that would relieve older
persons of the burden of paying for health care, Medicare beneficiaries now pay a
greater percentage of their incomes for out-
For the most part, Medicare pays only for "acute" care -
Medicare consists of four major programs: Part A, which covers hospital stays; Part
B, which covers physician fees; Part C, which permits Medicare beneficiaries to receive
their medical care from among a number of delivery options; and the recently-
For more on the basics of Medicare, Medicare.gov has a booklet designed for friends and family of Medicare members.
There are two parts of Medicare, each with their own eligibility requirements. Medicare Part A is available for anyone who is over age 65 or who is permanently disabled and who is eligible for Social Security.
You are eligible for Medicare Part A if you:
Medicare Part B is available for anyone over age 65 regardless of Social Security eligibility.
Medicare Part A covers institutional care in hospitals and skilled nursing facilities, as well as certain care given by home health agencies and care provided in hospices. Any person who has reached age 65 and who is entitled to Social Security benefits is eligible for Medicare Part A without charge. That is, there are no premiums for this part of the Medicare program.
Medicare pays for 90 days of hospital care per "spell of illness," plus an additional lifetime reserve of 60 days. A single "spell of illness" begins when the patient is admitted to a hospital or other covered facility, and ends when the patient has gone 60 days without being readmitted to a hospital or other facility. There is no limit on the number of spells of illness. However, the patient must satisfy a deductible before Medicare begins paying for treatment. This deductible, which changes annually, is $1,100 in 2010.
After the deductible is satisfied, Medicare will pay for virtually all hospital charges during the first 60 days of a recipient's hospital stay, other than telephone and television expenses. What Medicare covers includes:
However, Medicare will not pay for treatments or procedures that it considers medically
unproven or experimental. If the hospital stay extends beyond 60 days, the Medicare
beneficiary begins shouldering more of the cost of his or her care. From day 61 through
day 90, the patient pays coinsurance of $275 a day in 2010. Beyond the 90th day,
the patient begins to tap into his or her 60-
Medicare Part A also pays for stays in psychiatric hospitals, but payment is limited to a total of 190 days of inpatient psychiatric hospital services during a beneficiary's lifetime.
Fighting a Hosptial Discharge
If you are admitted to a hospital as a Medicare patient, the hospital may try to discharge you before you are ready. While the hospital can't force you to leave, it can begin charging you for services. Therefore, it is important to know your rights and how to appeal. Even if you don't win your appeal, appealing can buy you crucial extra days of Medicare coverage.
Starting July 1, 2007, new notice requirements for Medicare patients being discharged
from the hospital go into effect. The notices give Medicare patients information
about their discharge and appeal rights. Previously hospitals were required to give
patients a written notice before discharge called "Hospital-
Within two days of admission to a hospital, the hospital must give you a notice called "An Important Message from Medicare about Your Rights" (IM) explaining your discharge and appeal rights. You must read the notice, sign it, and date it. Two days before discharge, the hospital must give you another copy of the IM. If you are in the hospital for three days or less, the hospital only needs to give you one notice.
Once you receive a discharge decision and you are not ready to leave, you should immediately contact your local Medicare Quality Improvement Organization (QIO). A QIO is a group of doctors and other professionals who monitor the quality of care delivered to Medicare beneficiaries. They are paid by the federal government and not affiliated with a hospital or HMO. The phone number should be on the IM.
It is very important to contact the QIO right away. You must contact the QIO by noon on the first business day after you receive the discharge notice. If you do this, you will not have to pay for your care while you wait for your discharge to be reviewed. If you don't contact the QIO by noon, the hospital can begin charging you on the third day after you receive the discharge notice.
Once you request a QIO review, the hospital is required to give you a "Detailed Notice of Discharge." You should receive the notice no later than noon the day after you request a QIO review. The detailed notice explains the medical reason behind the discharge.
The QIO will conduct a review of the discharge. The QIO doctors will review the medical necessity, appropriateness, and the quality of hospital treatment furnished to you. The hospital cannot discharge you while the QIO is reviewing the discharge decision, and you will not have to pay for the additional days in the hospital. If you don't agree with the QIO's decision, you can ask it to reconsider. It must issue a decision within three days.
If, after the reconsideration, the QIO still agrees with the hospital's decision, you can appeal to an administrative law judge (ALJ). You will probably need legal counsel to help you through this process. You can appeal the ALJ's decision to the Department of Health and Human Services, Departmental Appeals Board (DAB). Finally, if you don't agree with the DAB decision, you can appeal to federal court as long as at least $1,000 is at stake.
States may have their own discharge protections. You can find the law in your state from the QIO in your state.
Medicare Part A covers up to 100 days of "skilled nursing" care per spell of illness. However, the conditions for obtaining Medicare coverage of a nursing home stay are quite stringent. Here are the main requirements:
As soon as the nursing facility determines that a patient is no longer receiving
a skilled level of care, the Medicare coverage ends. And, beginning on day 21 of
the nursing home stay, there is a significant copayment equal to one-
A new spell of illness can begin if the patient has not received skilled care, either in a skilled nursing facility (SNF) or in a hospital, for a period of 60 consecutive days. The patient can remain in the SNF and still qualify as long as he or she does not receive a skilled level of care during that 60 days.
Nursing homes often terminate Medicare coverage for SNF care before they should. Two misunderstandings most often result in inappropriate denial of Medicare coverage to SNF patients. First, many nursing homes assume in error that if a patient has stopped making progress towards recovery then Medicare coverage should end. In fact, if the patient needs continued skilled care simply to maintain his or her status (or to slow deterioration) then the care should be provided and is covered by Medicare.
Second, nursing homes may wrongly believe that care requiring only supervision (rather than direct administration) by a skilled nurse is excluded from Medicare's SNF benefit. In fact, patients often receive an array of treatments that don't need to be carried out by a skilled nurse but which may, in combination, require skilled supervision. In these instances, if the potential for adverse interactions among multiple treatments requires that a skilled nurse monitor the patient's care and status, then Medicare will continue to provide coverage.
When a patient leaves a hospital and moves to a nursing home that provides Medicare
coverage, the nursing home must give the patient written notice of whether the nursing
home believes that the patient requires a skilled level of care and thus merits Medicare
coverage. Even in cases where the SNF initially treats the patient as a Medicare
recipient, after two or more weeks, often, the SNF will determine that the patient
no longer needs a skilled level of care and will issue a "Notice of Non-
Whether the non-
The review costs the patient nothing and may result in more Medicare coverage. While the review is being conducted, the patient is not obligated to pay the nursing home. However, if the appeal is denied, the patient will owe the facility retroactively for the period under review. If the fiscal intermediary agrees with the nursing home that the patient no longer requires a skilled level of care, the next level of appeal is to an Administrative Law Judge. This appeal can take a year and involves hiring a lawyer. It should be pursued only if, after reviewing the patient's medical records, the lawyer believes that the patient was receiving a skilled level of care that should have been covered by Medicare. If you are turned down at this appeal level, there are subsequent appeals to the Appeals Council in Washington, and then to federal court.
If the Medicare beneficiary has no more than six months to live, Medicare will pay
for unlimited hospice care. This can be at home or in a hospice facility, and includes
services not generally covered by Medicare. These services include home health aide
and homemaker services, physical therapy, counseling, as well as physician and nursing
services. There is also a provision for "respite care"-
Hospice benefit recipients are responsible for up to a $5 copayment for each prescription drug, but otherwise there are no deductibles or other copayments for this benefit. Bear in mind, however, that in electing hospice care, the beneficiary is choosing to receive noncurative medical and support services rather than treatment toward a cure for the terminal illness.
Because Medicare's hospice home care benefit does not cover full-
Medicare Part B basically covers "outpatient" care: office visits to medical specialists, ambulance transportation, diagnostic tests performed in a doctor's office or in a hospital on an outpatient basis, physician visits while the patient is in the hospital, and various outpatient therapies that are prescribed by a physician. Part B also covers a number of preventive services. In addition, Part B covers home health services if the beneficiary is not enrolled in Medicare Part A. (See The Medicare Home Health Benefit below.)
Medicare recipients who are eligible for Part A are automatically enrolled in Part
B unless they opt out. Part B enrollees pay a monthly premium that is adjusted annually.
This premium, which is $110.50 a month in 2010, pays for about one-
Beginning in January 2010, higher income beneficiaries will pay higher Part B premiums.
Following are the higher premium rates:
Moreover, there is a financial incentive not to delay enrollment; those who wait to enroll in Part B after they become eligible for Medicare will pay a penalty. For each year that an individual puts off enrolling, his or her monthly premium increases by 10 percent -
The specifics of what is covered and what is not covered under Part B are complex
and change periodically in response to efforts to contain health care costs. Following
are some of the items that are excluded from coverage:
Medicare Part B recipients must satisfy an annual deductible of $155 (in 2010). Once the deductible has been met, Medicare pays 80 percent of what Medicare considers a "reasonable charge" for the item or service. The beneficiary is responsible for the other 20 percent.
However, in most cases what Medicare calls a "reasonable charge" is less than what
a doctor or other medical provider normally charges for a service. Whether a Medicare
beneficiary must pay part of the difference between the Medicare-
If the provider participates in Medicare, he or she "accepts assignment," which means that the provider agrees that the total charge for the covered service will be the amount approved by Medicare. Medicare then pays the provider 80 percent of its approved amount, after subtracting any part of the beneficiary's annual deductible that has not already been met. The provider then charges the beneficiary the remaining 20 percent of the approved "reasonable" charge, plus any part of the deductible that has not been satisfied.
Some states either require all licensed physicians to participate in the Medicare
program or require even non-
But many states have no such requirements. If a Medicare beneficiary in one of these
states is treated by a non-
It is against the law for providers in any state to charge Medicare patients more
than an additional 15 percent of the Medicare-
Example: Doctor Jones bills Mrs. Smith $150 for an office visit that Medicare says
should cost only $100. Mrs. Smith must pay Dr. Jones $35 -
In such "non-
Other physician practices that violate Medicare Part B's rules include:
Medicare patients do not have to share the cost of all services under Medicare Part B. Medicare pays for certain services in full, including diagnostic laboratory tests, home health services, second opinions on surgery (or third opinions if the two earlier opinions disagree), expenses for pneumococcal vaccine, and costs to kidney transplant donors. In all these cases, the $155 (in 2010) deductible does not apply and the 20 percent copayment is waived. On the other hand, Medicare will pay only 50 percent of the "approved" rate for the treatment of mental disorders on an outpatient basis.
If you qualify, Medicare will cover your home health benefits entirely, and while under the law there's no limit on the length of time you will be covered, in practice coverage is limited.
Nevertheless, Medicare home health benefits can mean the difference between you or a family member continuing to stay at home, or your health deteriorating until hospital care or nursing home placement become necessary.
You are entitled to Medicare coverage of your home health care if you meet the following
What you get:
If you need an element of "skilled" care, then you will also be entitled to Medicare
coverage of social services, part-
What you pay:
Nothing, with the exception of 20 percent of the cost of medical supplies and equipment, which is covered by some Medigap policies.
While the government insists that it has not changed the criteria for who is eligible for home care services, home health agencies have inevitably cut back on services they provide in order to make their own budgets balance.
What you can do:
All this means that Medicare recipients must advocate for the services they need. If you have to appeal a termination of service, the good news is that most people who appeal Medicare home health benefits win their cases. At the first level of review, 39 percent are successful, and on appeal to an administrative law judge, 81 percent are successful. The bad news is that you have to pay privately for the care in order to have an appealable issue. This is because the issue on appeal is not the termination of a service, but the denial of Medicare payment for the service. As a result, many beneficiaries simply try to make do without the care or hire help on their ownwithout the training and supervision provided by home health agencies.
Most Medicare beneficiaries are not informed of their appeal rights when given notice
that their home health care benefits will be terminated. Attorneys have filed a nationwide
class action suit on behalf of homebound seniors seeking advance notice of any termination
of benefits for Medicare home health coverage, as well as notice of the ability to
appeal such a denial before the termination occurs. If your benefits or those of
a family member are reduced or terminated, you should take the following steps:
While the federal government makes the rules about Medicare, the day-
Sometimes an intermediary, carrier or QIO will decide that a particular treatment or service is not be covered by Medicare and will deny the beneficiary's claim. Many of these decisions are highly subjective and involve determining, for example, what is "medically and reasonably necessary" or what constitutes "custodial care." If a beneficiary disagrees with a decision, there are reconsideration and appeals procedures within the Medicare program. Once Medicare's review process has been exhausted, the matter can be taken to court if the amount of money in dispute exceeds either $1,000 or $2,000, depending on the type of claim. Medicare beneficiaries can represent themselves during these appeal proceedings, or they can be represented by a personal representative or an attorney. The Medicare Rights Center estimates that only about 2 percent of Medicare beneficiaries appeal denials of care, but 80 percent of those who do appeal win more care.
Even if Medicare ultimately rejects a disputed claim, a beneficiary may not necessarily have to pay for the care he or she received. If a recipient did not know or could not have been expected to know that Medicare coverage would be denied for certain services, the recipient is granted a "waiver of liability" and the health care provider is the one who suffers the economic loss. In cases where this limited waiver of liability does not apply, however, the beneficiary is liable for any costs of care that Medicare does not cover. For example, a patient is financially responsible for any services normally provided under Medicare Part B if provided by a nonparticipating provider who did not "accept assignment" of the claim.
With all the deductibles, copayments and coverage exclusions, Medicare now pays for
only about half of the medical costs of America's senior citizens. Much of the balance
not covered by Medicare can be covered by purchasing a so-
Insurance companies may sell only policies that fall into one of 12 standard benefit
packages, ranging from basic coverage to the most comprehensive coverage. The 12
available Medigap policy packages are identified by the letters A through L (see
chart below). Each plan package offers a different combination of benefits, allowing
purchasers to choose the combination that is right for them. However, each plan package
is the same across insurance companies -
In addition plans A through J also cover the following:
Plan K offers the following benefits:
Plan L offers the following benefits:
The plans provide a combination of eight other areas of coverage on top of the basic set. These areas of coverage include the coinsurance for days 21 to 100 in a skilled nursing facility, the Part A and Part B deductibles, foreign travel emergencies, and prescription drug coverage.
States may authorize the sale by insurance companies of the basic plan package and any number of the other nine approved combinations of benefits, so there may be fewer than 12 options to choose from in your state. Also, if you live in Massachusetts, Minnesota or Wisconsin, different types of standardized Medigap plans from the ones outlined below are sold.
A Medicare recipient cannot be denied a Medigap policy if he or she applies for one
within six months of enrolling in Medicare Part B. Otherwise, claims relating to
Medigap policies do not fill all the gaps in Medicare coverage. The biggest gap they
fail to bridge is for custodial care in a nursing facility or for skilled care in
a nursing home beyond the first 100 days. For coverage of this type of care, you
must either purchase long-
Medigap also does not cover vision care, eyeglasses, hearing aids or dental care unless such treatment or equipment is needed as the result of an injury. In addition, Medigap plans do not cover prescription drugs. Before January 1, 2006, prescription drugs were covered in three plan packages (plans H, I and J). But under the Medicare Improvement Act, which created a Medicare prescription drug program, Medigap policies offering prescription drug coverage may no longer be sold. For more on this, see the discussion on Prescription Drug Coverage below.
A 2001 report by the General Accounting Office found that it pays to shop around
for a policy. Premiums vary widely not only from state to state, but within states
as well. For example, researchers found that in Texas a 65-
To help you find and compare Medigap programs available in your area, the Medicare
program offers a Web site called Medigap Compare. This interactive tool gives contact
information for insurance companies in your state that sell Medigap policies, and
offers basic information about the policies of some (but by no means all) of these
insurers, including which plans they offer; if the plans are offered to persons at
or over age 65, under 65 with disabilities and/or End-
Also, the Center for Medicare Advocacy offers excellent online information about Medigap. Click on: www.medicareadvocacy.org/FAQ_Medigap.htm
If you don't qualify for Medicaid and can't afford a Medigap policy, you may be able to get help paying for the costs of Medicare.
There are three Medicare assistance programs, called Medicare Savings Plans:
To qualify for these programs, you must be eligible for Medicare Part A (even if you are not enrolled) and have limited income and resources. The income and resource requirements can vary from state to state, so check with your state before applying. In general the following limits are applied.
Program Income Limits
Personal assets, including cash, bank accounts, stocks and bonds must not exceed
$4,000 for an individual and $6,000 for married couples. Your house and car do not
count as personal assets. Some states allow additional resources above these figures,
for example, New York has no resource limits for the QI-
To apply for one of these programs, contact your state Department of Social Services office or the equivalent agency in your state.
If you have Medicare Parts A and B, you can join a Medicare Advantage plan. Under
Medicare Advantage beneficiaries may choose from a number of private health plans,
Once you choose a plan, you can only change plans during certain times of the year. You can switch once during the Annual Coordinated Election Period which runs from November 15 through December 31 every year. You can also join a Medicare drug plan during that period. You can switch once during the Open Enrollment Period which runs from January 1 through March 31 every year. Beneficiaries who are happy with the way they are receiving Medicare can stay with that program, unless the program stops participating in Medicare. New Medicare enrollees who do not choose a particular program will automatically be enrolled in traditional Medicare.
The Medicare Prescription Drug, Improvement, and Modernization Act (MMA), enacted
in 2003, changed the name of these private Medicare alternatives to Medicare Advantage
and raised payment levels to local plans and would-
We've all heard about managed care, and many of us have first-
The basic idea of managed care is that a health plan is paid a flat monthly fee for each patient under its care. If the plan's costs in caring for that patient are less than the fixed fee, the plan makes money. But if the patient is quite sick and requires many costly medical services, then the plan may lose money on that particular patient. In this way, plans have an investment in keeping costs down.
When Medicare costs started skyrocketing along with the rest of the health care sector, Congress looked to managed care as a partial remedy. As a consequence, the Medicare program now contracts with managed care plans to provide services to Medicare beneficiaries who choose the managed care option (now called Medicare Advantage). The managed care plan receives a fixed monthly fee to provide services to each Medicare beneficiary under its care. As a Medicare managed care enrollee, you receive all the coverage you would receive under regular Medicare, except without the large copayments and deductibles you would normally pay. In addition, you often receive coverage for products and services that Medicare doesn't cover, such as prescription drugs or custodial care. Generally, you do not need a supplemental Medigap policy if you join a managed care plan. Sound too good to be true? In a way, it is.
Restrictions on Providers and Services
First, managed care plans keep their costs down by limiting a patient's freedom to choose which doctors and other providers the patient can see. The most prominent type of managed care plan, the health maintenance organization (HMO), maintains a list or network of health care providers (doctors, hospitals, etc.) that their patients are allowed to use. The plan has negotiated special rates with these network providers. If you see a provider who is not in the network, the plan will not pay the bill, and neither will Medicare.
If a managed care plan you are considering joining restricts access to providers, it is important to determine whether your doctors and other providers are in the plan's network. But bear in mind that managed care plans drop providers from their networks if they start costing the plan too much money. So just because your doctor is a member of the network now doesn't guarantee that he or she will be part of the network later.
Another way plans strive to reduce costs is to require that all care be funneled through a primary care physician. This doctor makes all decisions about whether or not to refer you to a specialist. You cannot make an appointment with a specialist on your own. The primary care physician is strongly encouraged to take care of all medical problems herself and refer you to a specialist only when absolutely necessary. Medicare does require, however, that managed care plans allow patients with serious conditions, such as heart disease, kidney failure and cancer, to see specialists without referrals from their primary care physicians. Also, routine preventive women's health care screening must be available without a referral.
For many, managed care's most disagreeable cost-
Not all managed care plans are so restrictive, but the less restrictive plans are
more expensive. Some offer what's known as a "point of service" option that allows
you to see physicians or other providers that are not in their network. If you go
outside of the network, however, you will pay a higher portion of the bill than if
you saw an in-
In addition, a report by the Medicare Rights Center finds that Medicare Advantage plans have serious disadvantages over original Medicare. The report, based on thousands of beneficiary calls to the Medicare Rights Center, lists nine common problems with Medicare Advantage plans, including problems getting emergency or urgent care, problems getting care while away from home, and problems getting continuity of care.
Given the restrictions of managed care, if you are considering joining a particular plan, it is a good idea to talk with your doctor about his experiences with that plan. How is the plan about approving treatments, referring patients to specialists or allowing patients to remain in the hospital if they are not ready to leave? Does the plan frequently overrule the doctor? You might also want to ask the same questions of the doctor's billing staff.
The True Cost of Medicare Managed Care
Given all these restrictions, you would think that managed care would cost less than a Medigap policy. Maybe, maybe not. While many managed care plans charge you no premium over and above your Medicare Part B premium, others, such as those offering a "point of service" option or unlimited prescription drug coverage, charge a small additional premium.
In addition, you may be responsible for copayments. These are charges plan members must pay out of pocket when they receive certain kinds of care, such as an office visit or a prescription drug. The copayment usually ranges from $5 to $15, depending on the managed care plan. If you see a lot of doctors or take an array of prescribed medications, the costs can add up. The plan may also only cover medications listed in its "formulary"the list of drugs it approves. For drugs not in the formulary, the copayment may be higher or the plan may pay nothing at all. Bear in mind that managed care plans often change the drugs in their formulary, so a medication covered now may not be covered later.
Another consideration is the extent of the plan's service area. If your plan's service area is limited, you may lack access to a broad range of providers.
On the plus side, managed care plans may offer coverage that goes well beyond regular
Medicare coverage, including:
Comparison Shop Online
Medicare operates a helpful Web site that allows you to compare health insurers that offer Medicare managed care plans in your area. You can see how the plans stack up according to such useful indices as premium, prescription drug coverage, doctor and hospital choice, outpatient surgery costs, and much more. Also included is information on plan members leaving managed care plans. Starting in 2001, Medicare began asking people who chose to leave a managed care plan the reasons why they left. These reasons will soon become part of the Medicare Compare site.
Another great source of information for those trying to negotiate the managed care
maze is the Health Insurance Counseling and Advocacy Program (HICAP). This independent
group, which is funded by state agencies on aging and by private donations, counsels
seniors about Medicare managed care and Medigap policies available to them in their
area. HICAP offices have a different (usually toll-
You can also contact your State Health Insurance Assistance Program (SHIP). The telephone
number for the SHIP in your State is available by calling 1-
Appealing Managed Care Plan Decisions
Your plan may overrule your doctor and refuse to cover a treatment or procedure that
it deems to be medically unnecessary or experimental. By one count, nearly one-
Medicare managed care beneficiaries sued the Medicare program, claiming that it was
not adequately protecting their right to appeal adverse decisions by managed care
plans. This suit was settled and resulted in new regulations that strengthen Medicare
beneficiaries' appeal rights under managed care. Medicare must now require managed
care plans to let you know four days before they end your home health, nursing home,
or certain outpatient rehabilitation care. This advance written notice must explain:
Medicare officials are also revising some of the requirements covering managed care organizations that terminate hospital services for Medicare beneficiaries.
You should check your plan's membership materials or contact the plan for details about your appeal rights.
Entering and Leaving Medicare Managed Care
You generally must be enrolled in Medicare Part A and Part B before you can enroll in a Medicare managed care plan. If you want to join a Medicare managed care plan, you should contact the plan and ask if it is accepting new member enrollments or if it has a waiting list. Plans must accept you if you apply within the first six months of signing up for both Parts A and B of Medicare. They also must enroll you during the "open enrollment" period between November 15 and December 31 for coverage beginning January 1. In addition, you can join a Medicare managed care plan between January 1 and March 31 of each year. However, you can't join or switch to a plan with prescription drug coverage during this time unless you already have Medicare prescription drug coverage (Part D). You also can't drop a plan with prescription drug coverage or join, switch, or drop a Medicare Medical Savings Account Plan during this period.
Managed care plans do not always have to accept new enrollments, however. Some plans have approved limits on the number of beneficiaries they can enroll (called "capacity limits"). Once a plan has reached its capacity limit, it does not have to accept any new enrollments. Still, if a managed care plan refuses to accept your enrollment, it must provide a written denial.
Once you choose a plan, you can only leave a plan at certain times of the year. You can switch once during the Annual Coordinated Election Period which runs from November 15 through December 31 every year. Or you can switch during the Open Enrollment Period which runs from January 1 through March 31 every year.
You can leave a plan in one of three ways. You can:
You need not fill out a disenrollment form if you decide to join another managed care plan. You will be automatically disenrolled from your old plan when your new plan enrollment becomes effective.
After you leave Medicare managed care, you automatically return to the regular Medicare program. It is very likely you will be able to continue seeing the same doctors and other providers you were seeing in the managed care plan, if this is your wish.
Avoiding the Medigap Gap
One risk of enrolling in Medicare managed care is that when you leave you may not
be eligible for the Medigap policy you had before you shifted to Medicare managed
care. When you return to regular Medicare, you are only guaranteed the right to buy
a Medigap policy designated "A", "B", "C", or "F" that is offered by insurers in
your state. None of these policy types offers a prescription drug plan. Medigap policies
that contain prescription drug coverage are available, but insurers may refuse to
sell you a policy because of your health status, may impose waiting periods for pre-
Before you disenroll from your managed care plan you should make sure the Medigap policy you had is still available from the original insurer.
Plan Withdrawals From Medicare
Managed care plans voluntarily enter into 12-
In a PFFS, Medicare pays a set amount each month to a private insurer to provide
health coverage on a fee-
Although the additional benefits offered through a PFFS plan may seem advantageous,
a report by the Medicare Rights Center finds that private Medicare plans actually
offer many disadvantages compared to original Medicare. For example, care can be
more expensive because co-
Before you enroll in a PFFS plan, look closely at the monthly premium, co-
Prescription drug coverage
Some PFFS plans offer prescription drug coverage. If the plan you choose has drug coverage, you must use the coverage offered by that plan. You may not enroll in a separate drug plan. If your PFFS plan does not offer prescription drug coverage, you can either switch to another plan that has drug coverage or add this coverage separately.
You can only switch to a different PFFS plans or back to original Medicare at certain
times of the year. You can switch during the election period from November 15 -
What does the drug benefit cost and what do you get?
Medicare recipients who elect to be covered by the drug benefit will pay premiums averaging $37 a month in 2009. This is an average; some plans will charge more, some less. Some plans will reportedly charge premiums of $20 a month or even less.
After meeting a $310 (in 2010) deductible, you will pay 25 percent of drug costs
up to $2,520 (in 2010) in a year, with Medicare footing the bill for the other 75
percent. The plan will pay $1,890 and you will pay $630. Coverage will then stop
completely until total out-
This means that beneficiaries must have $4,550 in out-
Bear in mind that only payments for drugs that are covered by your plan (see below)
count towards the out-
What will you save?
Fortunately, you don't need an advanced degree in statistics to determine what the
drug benefit will mean to you. AARP, which used its considerable political might
to assure passage of the new drug benefit, has created a calculator for beneficiaries
to determine their potential savings under Medicare Part D. (Note that the calculations
apply only to individuals who pay 100 percent of their prescription drug costs. Results
will not be accurate for low-
Will drugs you take be covered?
All Part D enrollees should have at least two Medicare private drug plans to choose
from. The insurers choose the medicines -
Since each drug plan offers a different formulary, and the same drug may vary in
price from plan to plan, the most important job for a Medicare beneficiary signing
up for Part D is to determine whether the prescription drugs they need or anticipate
Plans differ in the monthly premiums they charge, deductibles, the drugs they cover,
the cost of those drugs, limitations on drug purchases, and the convenience of the
plan's pharmacy network, among other factors. A comparison tool is available on Medicare's
Web site www.medicare.gov that allows you to search for Medicare private drug plans
in your region and compare their costs, covered drugs and pharmacy networks. The
information is also available by calling 1-
But it's possible that all your diligent research could come to nothing because after you have enrolled in what seems to be the best plan, the plan may discontinue coverage or increase the cost of any particular drug! Can you then switch plans? Only those eligible for both Medicare and Medicaid (see below) may switch plans whenever they want. Other beneficiaries will be locked into their choice for a full year; however, you won't lose coverage for any drugs you are currently taking.
If a company drops coverage for a drug, it must continue to cover participants currently
taking that drug until the end of the year. There are some exceptions -
Medicare Part D does not cover certain drugs, including barbiturates and benzodiazepines, which are prescribed for older people to treat insomnia, seizure disorders, anxiety, panic attacks, and muscle spasms. States have the option of providing Medicaid coverage for the excluded drugs.
Each Medicare drug plan will likely give you a list of local pharmacies where you can obtain their covered drugs.
Who may enroll?
Anyone who has either Medicare Part A or Medicare Part B (or both) can get Medicare Part D, Medicare's prescription drug coverage. Bear in mind, however, that Medicare Part D will not pay for drugs that could have been paid for under Medicare Part A or Medicare Part B. These drugs will not be covered even if the beneficiary does not have either Part A or Part B.
When should you enroll?
To avoid a penalty, you need to enroll during your Initial Enrollment Period (IEP).
Your IEP for Part D is the same as for Part B. It is a seven-
How do you enroll?
Once you have chosen the Medicare private drug plan you want to enroll in, you can contact the company offering the plan and ask for a paper application, or complete an online application on the plan's Web site, if the plan allows online applications. The online application also may be available on Medicare's Web site www.medicare.gov.
If you cannot enroll yourself, a representative who is authorized under state law can enroll for you. This could include a health care proxy, an agent acting under a power of attorney, or another surrogate decision maker as defined by state law.
If you are in a Medicare HMO or PPO, you can enroll in a plan offered by the company that sponsors your Medicare health plan.
Late enrollment penalties
Medicare beneficiaries may be subject to significant financial penalties for late enrollment. For every month you delay enrollment past the Initial Enrollment Period, the Medicare Part D premium will increase at least 1 percent. For example, if the premium is $40 a month, and you delay enrollment for 15 months, your premium penalty would be $6 (1 percent x 15 x $40 = $6), meaning that you would pay $46 a month, not $40, for coverage that year and an extra $6 a month each succeeding year.
Beneficiaries are exempt from these penalties if they did not enroll because they had drug coverage from a private insurer, such as through a retirement plan, at least as good as Medicare's. This is called "creditable coverage. Your insurer should have let you know if their coverage will be considered creditable.
Subsidies for low-
To qualify for Extra Help, you must meet the following criteria:
You automatically qualify for Extra Help if you are enrolled in Medicaid (you are a "dual eligible"), you are enrolled in Medicare Savings Programs (MSPs), or you get Supplemental Security Income (SSI).
Depending on your income, you may receive a full or partial subsidy. Medicare will
not pay low-
If you are dual eligible, enrolled in MSPs, or get SSI, you do not need to apply
for the subsidy. Other individuals have to fill out an application in order to see
if they qualify for the subsidy. For more information, contact them by phone at 1-
What if you're enrolled in both Medicare and Medicaid?
If dual eligibles do not enroll in a plan themselves, the Department of Health and
Human Services automatically enrolls them in a plan. If you had original Medicare,
you will have been enrolled in a stand-
If you are a dual eligible, you should make sure the plan you were assigned covers
the drugs you need and the pharmacies you visit. If it doesn't, you will need to
choose a different plan. Call 1-
The program's impact on Medigap drug coverage
Three Medigap plans covered prescription drugs (Plans H, I, and J). If you have one
of these plans, you have several options. You can do one of the following:
The three Medigap plans offering drug coverage cannot be sold after January 1, 2006, to anyone eligible for Medicare Part D. The plans may be sold without the prescription drug coverage. However, existing Medigap policies may be renewed. But be aware that if you keep your Medigap policy and later decide you want to enroll in Medicare, you may have to pay a premium penalty. You won't have to pay a penalty if your Medigap plan is considered as good as the Medicare prescription drug plan. Medigap issuers should have send notice to let you know if your Medigap plan is as good as Medicare prescription coverage.
If you decide to enroll in the Medicare prescription drug benefit, you can either choose a different Medigap policy or you can keep your current Medigap policy and drop the drug benefit. If you keep your current policy, your Medigap premium will be adjusted to reflect the elimination of the drug benefit.
If you want to enroll in the Medicare prescription drug plan and switch Medigap plans, you can enroll in Medigap Plans A, B, C, F, or two new Medigap Plans, K or L.
What if you already get retiree drug coverage from your former employer?
Be careful. Be very, very careful. If you sign up for Medicare Part D, you will lose
your company's retiree drug coverage, and some companies will cancel your medical
insurance as well. If your retiree drug coverage is "creditable" that is, if it is
equal to or better than what Medicare is offering -
Should you sign up?
For those who have high drug costs and no drug coverage now, or who qualify for a
For those who may not be able to afford the premium and who don't have high drug costs, it's a tougher call. Those who can afford it may decide to buy into the program even if they don't have high drug costs as insurance protection against runaway costs later. But those who already have drug coverage through a private plan that they believe will continue need to closely compare the benefits (see section above). The benefit they have now may well be richer than what Medicare is offering. Those who continue with a drug plan that is equal to or better than Medicare's will not be assessed a late enrollment penalty. Those who sign up with Medicare Part D will lose their current drug coverage and risk losing all their health benefits under the private plan.
Bear in mind that except for low-
Restrictions on Drug Plan Marketing
As noted, billions of dollars are at stake in convincing Medicare recipients to sign
up for this new benefit. The Centers for Medicare & Medicaid Services (CMS) has issued
marketing guidelines for companies offering prescription drug plans. Approved drug
plans are prohibited from making door-
Plan marketing representatives are not allowed to request personal information such as Social Security Numbers, bank account numbers, or credit card numbers.
Beware of Scams
Con artists are already using the new drug benefit as a wedge to convince unsuspecting
Medicare recipients to part with personal information like bank account numbers.
Residents of at least 13 states have reported a scam in which criminals attempt to
sell fake Medicare prescription drug cards for the Part D benefit. Since plans can't
market until October, any contacts before that time are suspect. Anyone who is unsure
about a contact should call Medicare at 1-
Social Security will be contacting low-
For more information . . .
(Some of the above documents are in PDF format. If you do not have the free PDF reader installed on your computer, download it here.)
Have further questions about Medicare? The Medicare Rights Center operates a toll-
DISCLAIMER: This information was originally obtained from www.elderlawanswers.com and has been updated. The updated information is based on new and/or revised federal, state, or local laws, with some of the updated information applicable to citizens with residence in the state of Tennessee. The effective date of all changes and/or revisions to the information contained on this site: TUESDAY, JANUARY 1, 2013.
The information on this web site is a public resource of general information, which
is intended, but not promised or guaranteed, to be correct, complete and up-