What Is Medicare?

1. What Is Medicare? • A health insurance program for • People 65 years of age and older • People under age 65 with certain disabilities • Administered by Centers for Medicare & Medicaid Services (CMS) • Enrollment Parts A&B:through Social Security Administration (SSA) or Railroad Retirement Board (RRB) • Enrollment in Part D – through CMS or directly through Part D plan • Enrollment in Part C / Medicare Advantage–directly through plan SHINE Program 11/07/2008

2. MEDICARE • Medicare has 3 parts – You have choices in how you get your Medicare health and drug coverage: • Medicare Health Insurance • Part A – Hospital coverage • Part B – Medical coverage • Part D – Prescription drug coverage SHINE Program 11/07/2008

3. Medicare Coverage Basics SHINE Program 11/07/2008

4. Applying for MedicarePart A • Enrollment is automatic if receiving Social Security benefits at age 65 • Otherwise, you need to sign up within 3 months of your 65th birthday • If you are covered by an “active” employer plan at 65, you may defer part of Medicare. SHINE Program 11/07/2008

5. Enrolling in Medicare Part B • Pay monthly Part B premium • $96.40 in 2009 – NO CHANGE FROM 2008 • Amount may be higher if you pay a late enrollment penalty fee • Amount may be higher based on your income. • Initial Enrollment Period – 7 month period begins 3 months before your 65th birthday and ends 3 months after your 65th birthday • General Enrollment Periodfrom January 1-March 31 of each year Begins July 1 of that same year. • Special Enrollment Period if you have group health coverage through your or your spouses’ employer or union. You can sign up during the 8 month period that begins the month the employment ends, or the group coverage ends, which ever happened first. • Premium penalty • 10% for each 12-month period eligible but not enrolled • Paid for as long as the person has Part B SHINE Program 11/07/2008

6. Enrollment in Medicare D • Pay monthly Part D premium directly to plan • 2009 range is $14.60 - $99.50 • Amount may be higher if you pay a late enrollment penalty fee • Initial Enrollment Period – begins 3 months before your 65th birthday and ends 3 months after your 65th birthday • Annual Coordination of Benefits from November 15th – December 31st of each year Begins January 1st of the following year. • Special Enrollment Period if you have group health coverage through your or your spouses’ employer or union. You have 63 days to enroll prior to incurring a late enrollment penalty. • Late enrollment penalty discussed later in session • COBRA Coverage that has Creditable Part D benefits: Unlike Parts A & B Medicare classifies loss of COBRA coverage as a Special Event. SHINE Program 11/07/2008

7. Medigap • Health insurance policy • Sold by private insurance companies • Must say “Medicare Supplement Insurance” • Covers “gaps” in the Original Medicare Plan • Deductibles, coinsurance, copayments • Does not work with Medicare Advantage Plans • The benefits in any Medigap plan are the same for any insurance company. It’s important to compare Medigap policies, because costs can vary. Each company decides which Medigap policies it will sell and the price for each plan, with state review and approval. SHINE Program 11/07/2008

8. Medigap • Works with Medicare • Private Company, may charge a monthly premium • Medigap policy may help you lower your out-of-pocket costs SHINE Program 11/07/2008

9. Other Supplemental Insurance • Group health coverage • Employer • Union • Organization or association • TRICARE for Life • COBRA • Understand your benefits and costs SHINE Program 11/07/2008

10. SHINE Program 11/07/2008

11. Part D • Plans must offer the Standard Benefit outline. Can offer enhanced benefits • May not include all Medicare-covered drugs • Usually cover similar drugs • Safe and effective • May have different levels (“tiers”) • Choosing generic drugs can save money • May require: • Prior authorization • Step therapy • Quantity limits • Plans must have processes in place • Members obtain medically necessary prescriptions • Request coverage determinations and appeals SHINE Program 11/07/2008

12. Medicare Prescription Drug Coverage • Coverage began January 1, 2006 • Available to all people with Medicare • Provided through • Medicare Prescription Drug Plans • Medicare Advantage and other Medicare plans • Some employers and unions SHINE Program 11/07/2008

13. Part D • Definition of Part D covered drugs • Available only by prescription • Used and sold in the United States • Used for a medically accepted indication • Includes supplies associated with injection of insulin • Syringes, needles, alcohol swabs, gauze SHINE Program 11/07/2008

14. Part D Benefit Outline 2009 SHINE Program 11/07/2008

15. Part D Enrollment • Initial Enrollment ended May 15, 2006 for those enrolled in Medicare A or B prior to January 1, 2006 • Initial Enrollment – follows eligibility for Medicare Parts A or B • Special Enrollment – • Type 1 follows Medicare Parts A or B Special Enrollment • Type 2 applies to those eligible for Medicare’s Low-Income Subsidy programs. • Annual Coordination of Benefits • November 15-December 31 • Can enroll in a plan or choose a new plan • New plan goes into effect January 1 SHINE Program 11/07/2008

16. Late Enrollment Penalty • Initial enrollment ended May 15, 2006 • Late Enrollment is defined as those: • Who were enrolled in Medicare prior to January 1, 2006 and did not join a Part D plan by May 15, 2006. • Who have not had “creditable Part D coverage” for 63 days or more • Life time penalty. You will pay an additional 1% of national base premium for every month eligible but not enrolled. The base premium can change each year, which means the amount of your penalty may also change each year. 2009 base premium is $31.74 Exception: Enrollment in “Extra Help” /”Low Income Subsidy programs. Penalty is waived through December 31, 2009 SHINE Program 11/07/2008