Medicare "101"   -  Keeping you informed

Update:   Medicare Part D

Medicare Supplemental Plan

We know that understanding what Medicare covers and what it doesn't is an important part of protecting yourself against unexpected medical expenses. That's why we have included this guide for you.

MEDICARE: The Vision Versus the Reality

When Medicare was created, its proponents had a vision that older Americans should be able to enjoy their golden years without the worry that major medical illness and chronic medical conditions could wipe out their life's savings.

It was this vision that led to the creation of the Medicare system. Unfortunately, many people think that they are fully protected under Medicare, and do not discover the truth until it is too late.

As valuable as Medicare is, it has its limitations. It cannot be all things to all people. It covers all or part of many medical expenses -- both hospital and doctor fees. But you are still responsible for deductible and coinsurance payments. Plus, if your doctor does not accept Medicare assignment, your medical expenses could exceed Medicare's approved charges and you would be required to pay the difference out of your pocket.

The problem is that what Medicare covers and what you have to pay creates "gaps" in your coverage that can add up very quickly.

Protecting yourself against these expensive gaps in Medicare coverage is what supplemental or "Medigap" plans are all about.

At Cal-Health-Plans Insurance Services, we offer Supplemental Medicare plans from Blue Cross of California, to fill the gaps associated with Medicare.

 

What are Medicare Parts A, B, C and D?

Medicare Part A typically pays for your inpatient hospital expenses.
There is no fee charged for this coverage.

Medicare Part B typically covers your outpatient healthcare expenses, including doctor fees. There is a premium for this part of your coverage.

Medicare Part C offers a choice of options, including Medicare Managed Care plans (like Medicare HMOs and PPOs) and Medicare private fee-for-service plans. In 2006 these will be known as Medicare Advantage Plans.

Medicare Part D is the new prescription drug benefit resulting from the Medicare Modernization Act of 2003, providing all beneficiaries with the option to add prescription drug coverage. A premium will be charged for Part D in the same way there is a premium for Part B benefits. It is important to note that some prescription medications may be excluded from this program.

Click here for a complete guide to Medicare Part D
Prescription Drug Plan

How the Part D Plan Works

You will have to pay a premium each month for the Part D benefit. The premium for Part D is approximately $35-$37 a month. Each enrollee wishing to participate will have to elect the part D coverage and choose a corresponding Prescription drug plan (PDP) or a Medicare Advantage Plan (MA-PD).  

The Standard Benefit in 2006

In 2006, the beneficiary pays a $35 per month premium ($420 per year) if they want Part D coverage. Beneficiaries are not required to enroll in Part D, but if they enroll at a later date, they will pay a higher monthly premium. 

■ Beneficiary pays $250 annual deductible before Medicare pays anything.

■ Beneficiary pays 25% of the costs of the next $2,000 of drug expenses (beneficiary pays $500 of next $2,000 of drugs costs plus all of the first $250 of drug costs for a total of up to $750).

■ After $2,250 of drug costs, there is no coverage until the beneficiary has paid another $2,850 worth of drug expenses (beneficiary pays up to $3,600 for up to $5,100 in drug costs).

■ Catastrophic coverage begins after beneficiary has paid $3,600 of out-of-pocket expenses ($5,100 total drug costs). The beneficiary pays $2 for generic, $5 for brand name drugs, or 5 percent of the drug’s cost, whichever is greater.

December of 2005 and January of 2006
You should receive an enrollment package from United States Social Security Agency in the early fall. For everyone else, the Initial Enrollment Period is similar to the Initial Enrollment Period for Part B.

FREQUENTLY ASKED QUESTIONS - Part D

I have NO prescription coverage now, how do I enroll in Medicare Part D?

The initial enrollment period will be November 15, 2005 to May 15, 2006, for people who are currently eligible or will become eligible in November and December of 2005 and January of 2006. You should receive an enrollment package from United States Social Security Agency in the early fall. For eve ryone else, the Initial Enrollment Period is similar to the Initial Enrollment Period for Part B.

Presently I am under a Medicare + Choice program (Part C). What changes can I expect with the new Medicare Part D Prescription plan?

Medicare Pa rt C is being restructured to Medicare Advantage (MA) Plans. Medicare Advantage Plans are made available through private health care companies. Medicare Advantage Plans may be a HMO (Health Maintenance Organization), POS (Point of Service) plan, PFFA (Private Fee-For-Service) plan or PPO (Preferred Provider

Organization). Each MA will offer varied benefits, depending on the plan you select. If you choose a MA that does not offer prescription drug coverage, you may participate in the Medicare Part D program.

I have prescription coverage through my employer -sponsored retirement plan. Do I need to enroll in Medicare Part D?

This decision will have to be made once your former employer decides whether or not they are going to maintain coverage for retirees. Companies have the option to either maintain their current drug benefits, or to reduce or eliminate prescription drug coverage for Medicare-eligible beneficiaries. Employers must notify their Medicare eligible retirees prior to November 10, 2005 of their decision to discontinue, reduce or maintain drug coverage. Beneficiaries must compare the benefits available to them and select the option that best suits their needs.

I have both Medicare and Medicaid (with prescription coverage). Do I need to enroll in Medicare Part D?

Beneficiaries who are dually eligible for both Medicare and Medicaid must enroll in Medicare Part D by December 31st, 2005. After that date, the Medicaid program will no longer provide prescription drugs for dual-eligibles. All other health related services you receive under Medicaid will continue. You will need to select a prescription drug plan (PDP) under Part D that best suits your medication needs. You will now have a co-payment on every prescription drug, which will be based on your income. There will be premium assistance available for low income beneficiaries.  

■ Beneficiaries that are dually eligible for Medicare and Medicaid with assets of less than $2,000 for a single person and $3,000 for couples-

- No monthly premium or annual deductible

- Beneficiary pays $1 for generic and $3 for brand name drugs if below poverty level or pays $2 for generic or $5 for brand name drugs if income is above poverty level and below 135% of the poverty level

- Medicare pays all other drug costs (no “gaps” in service)

■ Beneficiaries below 135% of the poverty with higher assets ($6,000 for a single person and $9,000 for couples)-

- No monthly premium or annual deductible.

- Beneficiary pays $2 for generic or $5 for brand name drugs

- Medicare pays all other drug costs (no “gaps” in service)

■ Beneficiaries below 150% of pove rty level, not eligible for above programs, and have assets, excluding the home you live in, below $10,000 for a single person or $20,000 for couples-

- Monthly premium based on sliding fee scale $50 annual deductible after the deductible, beneficiary pays 15% of drug costs for the next $2,200 of d rug costs

- Medicare pays until $5,100 of drug costs

- After $5,100 of drug costs, beneficiary pays $2 for generic or $5 for brand name drugs (www.egyptianaaa.org)

Will I be penalized for not enrolling in Part D?

If the beneficiary enrolling in Part D does not have credible drug coverage (defined as at least as good as Part D), then they will be penalized for not enrolling by May 15, 2006. Penalties take the form of increased monthly premium charges. Rates will be determined by the length of your delayed enrollment. If the enrollee does have credible coverage, he/she will be able to enroll in Part D at a later date with no penalty.

What about my current Medigap coverage? Will it continue to cover my prescription drugs?

Medigap policies that include a prescription drug benefit will NOT be sold, issued or renewed as of 1/1/06. You will need to enroll in Medicare Part D or one of the Medicare Advantage Plans to have prescription drug coverage. Medigap will have plans K & L that will remain available, but will not provide prescription drug coverage.