Understanding Medicare Basics with edits by Illinois SHIP

1. Understanding Medicare Basics with edits by Illinois SHIP Module 1B

2. What is Medicare? • A health insurance for people • 65 and older • Under 65 with certain disabilities • Any age with End-Stage Renal Disease (ESRD) • Administration • Centers for Medicare & Medicaid Services • Enrollment • Social Security Administration for most • Railroad Retirement Board (RRB) Understanding Medicare

3. Different Parts of Medicare • Medicare Has four Parts • Part A: Hospital Insurance • Part B: Medical Insurance • Part C: Medicare Advantage • HMO, PPO, Private-Fee-For-Service, Special Needs Plan • Also referred to has Medicare Health Plans • Part D: Prescription Drug Coverage “Original Medicare” Understanding Medicare

4. Ways to receive Medicare Medicare Advantage (HMO, PPO, etc) Original Medicare Part – B Part A & B Part – A Part – DorSecondary MedSup or Secondary Some will include Part D Understanding Medicare

5. Social Security Administration • Responsible for eligibility and enrollment • People aged 65yrs or older • Contributed into FICA 40 quarters (10yrs) • Married and receiving benefits under a spouse’s work record • Must have been married a minimum of 10yrs to receive benefits under a former spouse • Under age 65yrs • Receiving disability benefits under SSA or Railroad retirement systems for 24 months • Any Age • Receiving regular dialysis • Amyotrophic Lateral Sclerosis (ALS) • a.k.a Lou Gehrig’s Disease Understanding Medicare

6. Medicare for Disabled Individuals • Disability Defined: • Inability to work • Expected to last for 1 year or result in death • Can be the result of blindness • Visual acuity 20/200 or less with correcting lens in better eye OR • Visual field of 20 degrees or less Note: SSA is responsible for disability determination Understanding Medicare

7. Qualifying for Disability Benefits • Meet requirements • Definition of disability • Work credits • Or relationship to someone with work credits • 5-month waiting period • Exceptions • People eligible for childhood disability benefits • Some people previously entitled to disability benefits Understanding Medicare

8. Applying for Disability Benefits • Call SSA at 800-772-1213 • Necessary documentation needed • Social security number • Proof of age • Health-care provider information • Medical records • Work history • Including W-2 for the past two years • Don’t wait to apply Understanding Medicare

9. Qualifying for Medicare due to Disability • 24-month waiting period • Exceptions for people with ALS • No additional waiting period • Medicare starts with first month of benefits • Medicare usually begins 30th month after disability began • 5 months + 24 months = 29 month wait Understanding Medicare

10. ESRD Disability For Medicare • Coverage begins: • Fourth month of dialysis • First month if certain conditions are met • Month you receive kidney transplant • Month you are admitted to approved hospital • For transplant of procedures preliminary to transplant • 2 months before month of transplant • If transplant is delayed more than 2 months Understanding Medicare

11. Enrollment Periods • Initial Enrollment Period (IEP) • 3month before, month of, 3months after • Person’s 65th birthday • 30th month for Medicare due to disability • General Enrollment Period (GEP) • January 1st through March 31st of each year • Medicare coverage begins July 1st of same year • Penalties will usually apply • Special Enrollment Period (SEP) • Working or covered by a working spouse • Medicare Part B – 8 months from when retirement begins • Medicare Part D – 63days from when retirement begins • Only if already enrolled into Medicare Part A Understanding Medicare

12. Original Medicare • Go to any provider that accepts Medicare • Enrolled into Medicare Part A • Premium free for most people • Paid 40 quarters (10yrs) into FICA • Others may be able to purchase • If a U.S. citizen; or • Legal U.S. resident of 5 continuous years or more • Enroll into Medicare Part B • Pay monthly premium • Starting in 2007 some individuals have their premiums based on their taxable income • Pay Part A and Part B • Deductible • Coinsurance or co-payment Understanding Medicare

13. Medicare Card (front) Jane Doe Understanding Medicare

14. Understanding Medicare

15. Benefit Period • Part A (Hospital Insurance) charges are based on “benefit period” • Inpatient hospital care and skilled nursing facility (SNF) services • Begins first day of inpatient hospital care • Ends when you have been out of a hospital or SNF for 60 days in a row • Benefit period is not based on a calendar year • You pay deductible for each benefit period • No limit to number of benefit periods Understanding Medicare

16. Understanding Medicare

17. Understanding Medicare

18. Paying the Part B Premium • Taken out of one of the following monthly payments: • Social Security • Railroad Retirement • Federal Government Retirement • For information about premiums • Call SSA or RRB • Office of Personnel Management if a retired Federal employee • Will be billed every 3 months • If not receiving SSA or RRB benefits Understanding Medicare

19. Medicare Penalties • Part A • Penalty will only apply if a beneficiary has to purchase Medicare Part A • 10% a year for twice the number of years Example: Mrs. Robinson has delayed enrollment into Part A for 2 years, her penalty will be 10% a year for 4 years. • Part B • If a person delayed enrollment into Part B, their penalty will be 10% for each year and will remain with them for as long as they are on Medicare Example: Ms. Debbie has delayed enrollment into Part B for 3 years, she will have to pay a 30% penalty including her monthly premium for as long as she is on Medicare. Understanding Medicare

20. Medicare Supplement Insurance Understanding Medicare

21. 2010’s MedSup Policy – Core Benefit Core Benefits for Plans A, B, C, D, F, G, M, N include: • All Part A coinsurance expenses for : • $283 per day for 61st through 90th day; • $566 per day for 91st through 150th day; • Part A Hospice coinsurance • Upon exhaustion of Part A hospitalization benefits, full coverage of an additional 365 days per lifetime; • Part B coinsurance or copayment; • including Part B Preventive Services • First three pints of blood each calendar year • *Core benefits for Plan K and L are the same as listed above with the exception of 50% (Plan K) and 75% (Plan L) payment for the Part A deductible, Part B coinsurance, the blood deductible, hospice care coinsurance and Skilled Nursing Facility coinsurance. Understanding Medicare

22. Understanding Medicare

23. What is a MedSup Policy? • Health insurance policy • Provided by private insurance companies • Used with “Original Medicare” only • Must have both Medicare Part A and Part B • Covers the major gaps in Medicare • Medicare-approved charges • All policies are standardized • Each policy will be identical from company to company • Except in Massachusetts, Minnesota, and Wisconsin Understanding Medicare

24. Understanding Medicare

25. High Deductible Option • Another variation of a Medicare Supplement Policy offered is a “high-deductible option” • Offered only with a standardize Plan F • Plan will not pay it’s portion of benefits until deductible has been met • $2,000 in 2011 • Deductible is adjusted each year Understanding Medicare

26. What is a MedSelect Policy? • Health Insurance Policy • Provided by private insurance companies • Used with “Original Medicare” only • Must have both Medicare Part A and Part B • Covers the major gaps in Medicare • Medicare-approved charges • Conforms to the Standardize plans • Each policy will be identical from company to company • Except in Massachusetts, Minnesota, and Wisconsin • Must use specific hospital contract with MedSelect plan • For inpatient hospital services • May have to use specific physicians • Must live within 30 miles of a contracted hospital Understanding Medicare

27. Medicare Supplement Open Enrollment • One-time 6-month window • Have or enrolling into Part A • Enrolling into Part B for first time • Including those enrolling due to disability • Cannot be denied a policy • Join any plan from any company • May require a pre-existing condition waiting period • No more than 6 months Understanding Medicare

28. Medicare Disabled Beneficiary • Illinois Public Act 95-0436 • Began June 1, 2008 • Provided same open enrollment rights for Medicare Supplement Insurance • 6 months Open Enrollment Period (OEP) upon entitlement to Medicare Part B • To purchase any policy from almost any company, regardless of health history • Company cannot charge a rate higher then their highest rate • Registered with the Illinois Department of Insurance • Once a beneficiary turns 65 yrs-old, they will be entitled to a new 6 months OEP Understanding Medicare

29. Medicare Disabled Beneficiary2011 Guarantee Enrollment Period • Guaranteed enrollment for disabled Medicare beneficiaries - November 15 through December 31 • Guaranteed issue of a Medigap with 3 companies • AARP/ United Healthcare, Blue Cross Blue Shield, and Health Alliance. Understanding Medicare

30. Rights and Guarantees • Loss of Medicare Supplement • Company pulls out of the market • Must be provided with another policy • Loss of other coverage • Employer group health plan • 63-day Guaranteed Issue • May purchase Plan A, B, C, F, K or L • Medicare Advantage (MA) • Leave MA plan with first 12 months of first enrollment • Plan is pulled from the market Understanding Medicare

31. Understanding Medicare

32. What is Secondary Insurance? • Secondary insurance is other insurance that is provided by • Employment sponsored health and/or drug coverage • Retirement health and/or drug coverage • Union sponsored health and/or drug coverage • Not offered by or contracted with Medicare • Company may choose; • Who they will cover • How and what coverage will be offered • if it will provide any additional coverage for Medicare beneficiaries Note: Medicare beneficiaries should contact their benefits office to see how it will work with Medicare. Understanding Medicare