Medicare and Medicaid Coordination of Benefits

Medicare and Medicaid Coordination of Benefits Rebecca Phillips Training Specialist

MMAP Inc. • We are Michigan’s State Health Insurance Assistance Program (SHIP) • MMAP (Michigan Medicare/Medicaid Assistance Program) • Federal funding for the program began in 1991 • Each state has their own SHIP • Most SHIPs are operated by the State, however, MMAP Inc. is a non-profit • All rely heavily on volunteers

MMAP’s Mission To educate, counsel and empower Michigan’s older adults and individuals with disabilities, and those who serve them, so that they can make informed health benefit decisions

MMAP’s Vision MMAP is the recognized leader in providing high quality and accessible health benefit information and counseling supported by a statewide network of unpaid and paid skilled professionals.

What is Medicare?

What is Medicare? • Federal Health Insurance for: • People 65 years of age or older • Some persons with disabilities, after a 24 month waiting period – Must be deemed by Social Security • People with End-Stage Renal Disease • People with Amyotrophic Lateral Sclerosis (ALS)

Medicare Plan Choices • Original Medicare • Part A- Hospital Insurance • Part B- Medical Insurance • Part D- optional Prescription Insurance • Medicare Advantage • Health Plan (HMO, PPO, PFFS) offered by private health plans • Sometimes referred to as Part C

Original Medicare • Part A- Hospital Insurance • Covers • Hospital stays • Skilled nursing facility care • Hospice care • Costs • $1068 deductible a hospital stay of 1-60 • $267 per day for days 61-90 hospitalization • Paid for through FICA taxes; therefore anyone who has 40 work credits (about 10 years) does not pay a premium for Part A

Original Medicare- Part A cont. • Also covers skilled nursing facility after a 3 day hospital stay for care relating to hospital treatment • Covered in full for first 20 days.

Original Medicare • Part B- Medical Insurance • Covers • Outpatient services, such as doctor’s visits, ambulance, lab, x-rays, medical equipment • Costs • Monthly premium of $96.40 for most people • Annual deductible of $135 • 20% co-pay for most services

Medigap • Sold by private insurance companies • Fills the gaps of Original Medicare • Currently 12 standard plans “A-L” • Set core benefits for each standard plan • Costs vary • MIPPA – number of changes to Medigaps coming in June of 2010

Medigap • Helps pay the costs with Original Medicare • Don’t need Medigap if you are • In a Medicare Advantage plan • Have retiree coverage • Have Medicaid

What Medigap Pays • Co-insurance amounts for Part B (20%) • Some policies cover deductibles for Part A and/or Part B • Some policies offer additional benefits, like Foreign Travel Emergency or Routine Checkups

Part D- Prescription Coverage • Medicare Prescription Drug Coverage is part of the Medicare Prescription Drug Improvement and Modernization Act of 2003 (MMA) • First time Medicare provided prescription coverage for outpatient prescription drugs

Who is Eligible for Part D? • Anyone who has Medicare Part A and/or Part B • Enrollment is voluntary • In most cases, beneficiary must choose and join a Medicare drug plan to get coverage

Medicare Part D Costs • For coverage in 2009, beneficiaries will generally pay… • A monthly premium • $295 deductible • 25% of yearly drug costs from $295 to $2700 • 100% of drug costs from $2700 to $6153.75 • 5% of drug costs (or smaller co-payment) after $4350 true out-of-pocket expenses

Standard Benefit Structure Chart Out-of-Pocket Drug Spending in 2009 for Medicare Part D Basic Benefit Beneficiary Spending Medicare Part D Benefit Catastrophic Coverage 5% $6,153.75* $3,453.75 Gap NoCoverage $2,700* Partial Coverage 25% Deductible $295* + Monthly Premium * Numbers represent actual prescription drug cost.

Types of Part D Plans • Offered by private companies • Approved by Medicare • Two Types • Prescription Drug Plans (PDPs) • Medicare Advantage (MA-PDs)

Medicare Advantage • Changes the structure of Medicare benefits • Offered by Private Insurance companies who have contracted with Medicare • Medicare Advantage Plan is primary • Subject to co-pays • Plans can be HMO, PPO, Private Fee for Service – basically these are Managed Care plans • Medicare Advantage wraps Medicare, supplement and prescription drugs into one policy • Must be enrolled in both A & B

Medicare Advantage Costs • Still Pay Part B premium • May have a Medicare Advantage Premium • Pay associated co-pays and deductibles for medical care

What is Medicaid?

What is Medicaid? • Medicaid provides medical insurance to groups of low-income individuals and families that may have inadequate or no medical insurance. • In Michigan, Medicaid has over 30 health care programs for children, families and adults who meet eligibility criteria. • This presentation will focus on those that are 65 or older, blind, or disabled.

Medicaid - Administration • The Federal government sets general guidelines for the Medicaid program, but each state determines the policy rules and regulations of their program. • The Michigan the Department of Community Health (MDCH) oversees this program and local Department of Human Services (DHS) offices administer the program. • DHS offices are usually located at the County level.

What does Medicaid Cover? • Federal law and regulations require that states provide to qualifying older adults and person with disabilities a set of mandatory benefits: • Inpatient hospital services • Outpatient hospital services and rural health clinic services • Other lab and x-ray services • Skilled nursing facility services • Physicians’ services • Home heath care services

What does Medicaid Cover? • Many states offer a some optional benefits as well, which may include: • Dental • Chiropractic • Hearing aid services • Podiatry • Vision • Occupational and speech therapy

Medicare Savings Programs • These are programs developed to help pay the premiums, deductibles, and copays for Medicare. • QMB (Qualified Medicare Beneficiary) – pays Part B premium, Part A & B deductibles, and all Medicare copays. • SLMB (Specified Limited Medicare Beneficiary) – pays Medicare Part B premium. • ALMB-QI-1 (Additional Low-Income Medicare Beneficiary) – pays Medicare Part B premium (not an entitlement) • These programs are administered by Medicaid and they have asset and income limits • A beneficiary may have both Medicaid and a Medicare Savings Program

Medicare Secondary Payer Rule and Coordination of Benefits

Medicare Secondary Payer Rule and Coordination of Benefits • Medicare Secondary Payer (MSP) Rule requires other insurers to pay before Medicare • Federal law passed in 1980 created this rule, prior to this Medicare was always primary • Determination is made based on other available insurance • MSP applies if the other insurance available is: • Employer Group Health Plans for current employees and their dependents (the “working aged”) • Worker’s Compensation Insurance • Automobile and Liability Insurance

Medicare Secondary Payer Rule and Coordination of Benefits • Medicare Secondary Payer Rule and Employer Group Health Plans (EGHP) • If the person covered by Medicare or his/her spouse is still working and covered by EGHP, the EGHP is primary for: • Employers with 20 or more employees • For persons with disabilities, rule applies to employers with 100 or more employees • These beneficiaries do not need to take Part B while they are covered by the EGHP. Once they retire or lose the EGHP they will need to enroll in Part B.

Medicare Secondary Payer Rule and Coordination of Benefits • Medicare is primary with the following: • Medicare Supplement (Medigap) insurance • Retiree group insurance – acts as a supplement • TRICARE for Life for military retirees • Medicaid • Generally, where the terms of the contract say that the insurance pays second to Medicare

Medicare • General rule with Medicare: If Medicare is Primary, the beneficiary must have both A and B before a secondary insurance will pick up any part of a claim. • Side note: if the beneficiary does not enroll in Part B when he/she first became eligible he/she may have to pay a late enrollment penalty.

Crossover Agreement • Medicare has agreement with other insurance companies that allows Medicare to send claims directly to the other insurance carrier automatically for processing. • This eases the claims process for the beneficiary.

Medicaid • General rule with Medicaid: Medicaid always pays last. • If there is a possibility that another insurer or payer is available to pick up a claim Medicaid will not pay for that claim until it is proven otherwise.

Common Areas of Confusion • COBRA • Medicare is primary with COBRA (except for when End-Stage Renal Disease is involved) • Delay in disability claims at Social Security complicates this issue • Since SSA is sometimes years behind in processing disability claims it is not uncommon for someone to be eligible for Medicare retroactively. • When this happens the COBRA coverage will take back their payments to providers stating that Medicare should have paid. • This is where I see the most problems with beneficiaries being sent to claims.

Common Areas of Confusion • Medicare Advantage Plans • Will not coordinate with Medigap Plans • Most are not set up to coordinate with Medicaid or other insurance benefits (retiree) • May be able to get secondary insurance (Medicaid) to pick up deductibles or copayments but if a contract is not in place the chances are very slim. • Exception - Special Needs Plans (SNPs): Medicare Advantage plans that have a contract with Medicaid

Common Areas of Confusion • What if someone has Medicare, a retiree plan and Medicaid? • Medicare would be primary • The Retiree plan would pick up the pieces it will cover after Medicare pays their part. • Medicaid will then come in and possibly pick up anything that is left. In reality, there usually would be very little for Medicaid to pick up in this situtation.

Contact Information: Rebecca Phillips rebecca@mmapinc.org 517-886-1242 ext 12 MMAP 1-800-803-7174

Medicare and Medicaid Coordination of Benefits