MEDICARE  MADE  EASY - YEAR 2016

 

Medicare is not medical insurance. It is not a complete health coverage plan, and it was never meant to be. Medicare covers a limited portion of an individual's health care costs - and a portion of other medically-related services.


What does basic Medicare cover? Under Parts A and B, if you go into the hospital, you pay the first $1288 for the first 60 days; this is your per benefit period deductible (a new benefit period starts every 60 days). After day 60, if you’re still hospitalized, you are responsible for the first $322 per day for the next 30 days. If you are still hospitalized after that, you are responsible for the first $644 per day of the next 60 days. If you are hospitalized beyond that, you are on your own; Medicare pays nothing. This $1288 deductible recurs every 60 days if you are hospitalized more than once.
 
If you go into a skilled nursing facility and are considered in "recovery mode" (too well to remain in the hospital but too ill to return home), Medicare picks up 100% of an approved amount for the first 20 days. From day 21 through day 100, you are responsible for the first $161 per day. Beyond day 100, Medicare pays nothing - you are on your own. If you are looking for long term care (an insurance plan geared toward nursing home, adult day care, assisted living facilities, home health care, etc..... ), that is not part of Medicare nor is it covered by Medicare; you need to talk to your insurance agent about a "long term care plan." Like many forms of insurance, long term care coverage is never as inexpensive as it is the day you apply for it, and rates usually lock in for the duration. Underwriting is substantially more liberal than it is for regular health coverage.
 
Of medical expenses, doctor's fees and outpatient hospital services, Medicare pays 80% of the "approved" amount, after a $166 per calendar year deductible. You  are responsible for the other 20%. If the doctor you see does not take Medicare assignment, you may also be responsible for an additional 15% of the Medicare allowed charges – called “excess”.

The above describes Medicare Parts A and B, the basic plan which all Medicare-qualified applicants receive. Medicare itself is not always automatic; in many cases you must apply for it. And to be eligible for Medicare benefits at all, you must have paid into Social Security a specific number of quarters during your working years. However, if you are 62 and already receiving Social Security benefits, you are automatically enrolled in Medicare Parts A and B starting with the first day of the month in which you turn 65. Note that enrollment simply means you don't have to make formal application when you turn 65; Medicare benefits cannot be used until the month in which you turn 65. If you are working and are covered by a group insurance plan, you can postpone enrolling in Part B; then, your open enrollment for a Medicare supplement will start the month in which you enroll in Part B. Supplements are not automatic; they must be applied for.
 
Again, basic Medicare Parts A and B (not to be confused with Plan A and B) cover a portion of actual medical costs you are likely to incur.
 
Medicare Plan C picks up that $161 per day of skilled nursing facility care which Medicare Part A does not cover (beyond the first 20 days), as well as your $1288 per benefit period hospital deductible and $166 per calendar year medical expenses deductible. It will also provide limited coverage if you travel outside the United States.
 
Medicare Plan F covers the same things as Plan C and also picks up the 20% coinsurance from Medicare Part B's medical expenses.
 
The "high option" Plan F, is as described above but has a $2180 deductible and is lower in price, due to the fact that you take responsibility for the first $2180 of allowable medical expenses before either Medicare or the supplement kick in (medications do not count toward the deductible on this or any other Medigap plan). Mathematically, this option makes good sense, as the amount of premium you would save on High Option F over regular F is about $800-1500 per year. Only a few carriers offer High Option F and fewer people ask for it.
 
Plan G does not cover the doctor deductible but is otherwise identical to Plan F, and costs less.

Plans K through M ….. There is a lot of cost-sharing with these plans, which are described on the inside cover of the rate book. They do not pick up the Part B deductible, pick up only 50% of the coinsurance for doctors and skilled nursing facility, provide no foreign travel or preventative wellness benefits. The out-of-pocket limit on these plans is $2000-$4000.

Plan N is comparable to plan G but you also have a $50 co-pay for Emergency Room, $20 co-pay for doctors (after the deductible, not in addition to it) and the potential 15% excess.

You can be declined supplemental coverage based on health history if you wait until after you are 65-1/2 to apply for your supplement (exception: HMOs will always take an applicant, where HMOs are offered, so long as the applicant does not have End Stage Renal Disorder). Cost of a supplemental plan will depend on whom you choose to provide coverage. Coverage can be purchased through HMO/PPO's in the more populated areas (primarily Maricopa, Pinal and Pima counties) or some of the regular health insurance carriers. It is easy to get an HMO after you have had a Medigap plan; it is almost impossible to get a Medigap plan if you are coming from an Advantage plan. The “Annual Enrollment Period” does not apply to people wanting to go from Advantage Plans to Medigap plans or even from Medigap to Medigap plan.<>
 
The most frequently-asked question we hear is why basic Medicare doesn't cover prescription drugs (which the new Part D does as of January 1, 2006 or a small monthly premium) and how come nursing home isn't covered except in a "recovery mode" and long term care isn't covered at all? Statistically, less than 4% of all nursing home or extended care facility charges qualify under Medicare. Most of those costs are paid for by private long term care plans.

Long term care plans cover not only nursing home but other charges, such as at-home health care, assisted living and adult day care, and other long term care-related medical expenses - services that Medicare won't provide. If you were diagnosed with Alzheimer's or Parkinson's, or any number of other physical ailments, Medicare wouldn't cover any of the medical costs - because these are not conditions from which one recovers, they are progressive (degenerative) conditions.

You will receive basic information related to Medicare months before you turn 65, which is when everyone starts being inundated with brochures, etc. The sooner you have information on Medicare, the better decision you will make when you need it. You don’t need to be on Social Security to get Medicare; however, if you are not, then enrollment in Medicare is not automatic and you need to apply for Parts A and B of Medicare, and you can go online and do this at www.med.gov.

 

 

WHAT IS THE DIFFERENCE BETWEEN:

 AN ADVANTAGE PLAN (HMO / PPO) AND A MEDIGAP PLAN?

 

Medigap plans are the original true Medicare insurance supplement plans. Plan F, the most popular and offered by all carriers who offer Medicare insurance plans, picks up 100% of whatever Medicare doesn’t pay, for services that Medicare otherwise approves. If you take Plan G, you will be responsible for the Part B deductible ($166 per year) and Part B is anything that occurs outside of a hospital, such as diagnostics or doctor appointments), but the plan then still picks up 100% after that, and of everything else. Plan G is offered by only a few carriers. 

Plan F costs between $135 and $185 per month, depending on the carrier and zip code; Plan G normally runs about 10-12% less. Any doctor who takes Medicare will take a Medigap plan, no matter who the carrier is. Medigap plans are standardized - that means that the Plan F through BCBS is the same as the Plan F through AARP which is the same as the Plan F through Mutual of Omaha or Equitable; the only difference in plans is price. However, some carriers pay claims more quickly than others. When you see a doctor who takes Medigap plans, he sends the claim to Medicare; the name of your carrier doesn’t matter to him - unless it is an Advantage plan, as a number of doctors do not take them. With a Medigap plan, you can go to any doctor, anywhere, anytime, who takes Medicare.  Period. You can move with it, you can travel with it; you don’t need referrals. 

If you have an Advantage plan, much of that changes.

Many doctors who take Medicare do not take Advantage plans. When you have an Advantage plan, you are restricted to the doctors in that plan’s network (usually within the county, though some let you go to "any participating doctor" - but their plan will spell that out). With an HMO, you usually select a primary care doctor from their list of participating providers and that is the doctor you see whenever you need medical attention. If you need to see a specialist, your primary care doctor will then write a referral so you can go see another doctor (also on the list). If you have an Advantage PPO (not as easy to find) you can go to any doctor on the list of participating providers without a referral - just like a major medical PPO. Again, carriers offering Advantage plans have a PPO option. 

With an Advantage Plan, you technically disenroll from Medicare Parts A and B as the Advantage plan becomes your primary plan. So “original” Medicare is no longer the deciding factor in how much is paid toward your eligible expenses, nor can you file a claim directly to Medicare since - technically - you no longer have original Medicare. Generally, whatever Medicare approves, the Advantage plan does, also. However, you will still go out of pocket for a portion of the hospital, out-patient, labs, x-rays, doctor appointments, etc.  

Example: Medicare’s hospital deductible is $1288 per hospitalization and re-sets every 60 days. Medicare picks up 100% after the first $1288 per hospitalization; your Medigap plan pays that $1288 every time, with no out of pocket to you. With an Advantage plan, you may pay anywhere from $250-500 per hospitalization to as much as $250 per day (up to six days) depending on the plan. With a Medigap plan, you pay nothing, at any time.

In some cases, you may be responsible for the 20% of diagnostic and other out-patient services that Medicare itself would normally not pay but that a Medigap plan would usually pick up at 100%.

Example: cancer treatment. Medicare approves chemotherapy and picks up 80% of the approved cost. A Medigap plan picks up the other 20%. Many Advantage plans cover only the 80% that Medicare would have paid and leave you to pay the balance (an average round of chemo is $3500 and treatment usually consists of four to eight rounds). However, Medicare approves only about 40-50% of the cost of chemo and the patient’s 20% would relate to the Medicare allowed amount, not the billed amount. 

Travel: most Advantage plans cover you only in the US and, if outside your local provider network, only for life-threatening illness or injuries. A few plans do offer emerency out-of-state coverage. Medigap plans provide emergency foreign travel health coverage, up to $50,000.

Relocation: if you move outside your provider service area, you cannot take an Advantage plan with you. You must apply for a new plan wherever you move, and Advantage plans are not plentiful in a majority of rural counties. So at that time you would have a new but short enrollment period in which you could then apply for a new Advantage plan or even a Medigap plan, as that might be all that is available in your new location. Losing an Advantage plan through no fault of your own creates a "Guaranteed Issue" enrollment period, whereby you can apply for a Plan F Medigap plan with no underwriting.  Plan G, in an Guaranteed issue scenario, requires underwriting with most carriers.

Advantage plans are contractual. If you have an Advantage plan and in July decide you don’t want it, you cannot cancel it until the annual enrollment period (every October 15 through December 7). Exception: if you move outside your coverage area, per above. The AEP (annual enrollment period) applies to Advantage plans and drug plans, not to Medigap plans. During the AEP you could cancel and change to a different Advantage plan or try to apply for a Medigap plan; for the latter, you will be underwritten and can be declined coverage.

Advantage plans are cheaper than Medigap insurance plans - of course they are: you have more out of pocket expense on an Advantage plan, that a Medigap plan would cover at 100%. You have a limited number of doctors and providers to choose from. You still have deductibles and co-pays. In other words, you pay less premium because you pay more in medical costs.
 
Every Advantage plan will indicate, in its literature, what its maximum out-of-pocket expenses are. Usually, that maximum is $3200 to $7200 per year (excluding prescription drugs). On a Medigap plan, that annual maximum averages $0 to $166 – a little bit more on Plan N.
 
Advantage plans often include drug coverage; basically, Part D is part of most Advantage plans. If you have a Medigap plan there is no drug coverage but you can get a stand-alone drug pan (if you even need one) for about $20-75 per month. It works the same way that it does in the Advantage plan.
 
So, the basic differences: flexibility, portability, coverage, benefits and overall out of pocket costs.

 

 

PRESCRIPTION  HINTS  AND  HELPS
 
WHERE CAN I GET THE BEST PRICES ON PRESCRIPTION DRUGS?


 

First of all, whether you are 25, 45 or over 65, prescription costs can be a bear. Some carriers won't cover certain drugs, some drugs haven't been in wide spread use long enough to be approved by various carriers, some are excluded due to sheer cost….. but there is help!

 

There are many avenues to saving money if you don't have a health plan that covers your particular medication needs - or if you don't have a plan at all.

 

First….. doctor's samples. Almost every prescription that a doctor can write has been given to him in sample form, by pharmaceutical reps. If nothing else, a doctor should be able to give you a two week to two month supply of samples. Some doctors have kept patients going indefinitely on samples.

 

Second….. ask if the prescription comes in a generic form. It is surprising how many doctors just write out the prescription for the brand name, even when there is a generic.

 

Third….. if you take a medication that is in a breakable tablet form, ask your doctor to write it for double your usual strength with the instructions to break it in half. The price difference between 20 and 40mgs of a drug is often less than 20%. Sometimes, there is no difference.

 

Fourth….. shop around! Many of the stores have those wonderful $4 generics. For the most part, the least expensive retail store I have seen for brand name is Costco. Go to www.costco.com and check out any of your prescriptions - you may be surprised by some of those rates.

 

Fifth…..  I have never heard a horror story about prescriptions filled in Mexico but, since those factories are simply independently contracted and Canada's are owned and operated by many of the manufacturer's themselves, I would tend to trust Canada more…

 

Sixth….. Canadian mail order. For some reason, some folks think this isn't around anymore. The only ones complaining about Canadian mail order are all the "middle men" involved in the distribution of prescription drugs who won't get their "cut" if you buy your prescription outside the US. By the time a medication leaves the factory and gets to your drug store, it goes through about six distribution points, each with their own fee tacked on. Try www.candrugstore.com. This is a very easy-to-use website, they are on the west coast of Canada and open on Saturdays. Or call them at 866-444-6376 to place your order (you do need a copy of your prescription, which they will verify with the physician). This group does not, never has and never will order from China due to quality control issues.

 

                 NOTE: the patent on brand name drugs is only good in the US. Many of the same companies who manufacture prescription drugs in the US make them in Canada and other countries, also - in their own
                 facilities and in ageneric form. This is true - and the cost, ordering through Canada, is anywhere from 35% to 75% less the cost of the brand name equivalent. Even brand names, pruchased through

            Canada, can be a good 15-35% lower than in the US - and again, these are the brand nane.

 

Seventh….. if you are low income or simply have some really costly meds, you can contact the manufacturer directly and ask if they participate in any prescription assistance programs. Many do and none advertise this. All it takes is for you and your doctor to fill out a form and send it in. Many drugs costing in the $75 to $300 range are dispensed at little or no charge by the manufacturers.


 

Eighth.....   Medicare itself can assist those with a low income to get a Part D plan with no premium; consult your Medicare & You booklet or go wo www.medicare.gov for more information.


Bear in mind, too, that many brand name and some generics, are manufactured in China, regardless of where you are buying them. There have been some recalls of prescription drugs manufactured in China that contain heparin. The Internet is a valuable tool is keeping up with this type of information. 

 

The above tips are for everyone - not just the over-65, the unemployed, the disabled…. everyone.

 

HOW ABOUT PRESCRIPTION DRUG PLANS?

In January 2006, Medicare came out with Part D (not to be confused with a Plan D), an option offering prescription benefits. This costs between $19 - $85 per month, depending on where you purchase it. Under the original  Medicare guidelines, you can be responsible for up to the first $360 in drug costs (2016) - some Part D plans waive this deductible. Of the first $3310 in drug costs, Medicare will cover approximately 80%. Once you and Medicare have paid out a [combined] total of $3310, you are on your own until your out-of-pocket reaches $4,850. At that point, Medicare will generally cover 90-95% of the drugs on their approved formulary list. If your prescription is not on the list, it will not receive any discount. This "on your own" period, called the "doughnut hole" or "gap" changed in 2011, when these plans started covering 27% of the cost of generics and 53% of the cost of brand name drugs in that "hole."  Now, in the "hole", the carriers pay a slightly higher amount. Eventually, closer to 2020, the "hole" will go away altogether.

HOWEVER - most carriers came out with their own version of Part D, and half offer plans with no deductible (for a higher premium, of course) - and even on the plans with a deductible, Tier 1 and Tier 2 usually do not come under that deductible.

Note: it does not matter who you have your supplemental benefits through - you may buy Part D from any entity offering it. The exception is those who are on an Advantage Plan - they cannot buy Part D as it is aleady incorporated into their plans' benefits automatically.

Call for further information or application.
 
 

WHO DO I CALL FOR LONG TERM CARE PLAN INFORMATION?

In the central and west Maricopa County areas, call Dick Miller at 623-939-8759

Dick has over 25 years' experience in long term care - in addition to having had to use it himself and knowing first hand just how well it works. However, Dick does not go travel outside of Maricopa county 

If you are outside Maricopa County or on the east or south side, call Melissa Myers; she works in the financial planning and long term care areas and her agency services most of the state. Her number is 602-424-7503 or 877-280-2304 outside maricopa county.
 

Don't wait until you or a loved one has a need for long term care, at home assistance, or nursing home or adult day care; once the need has been established, these plans cannot be obtained. Like most other types of insurance, it must be purchased while the individual is in fairly good health.