Medicare 101 Nov. 9, Greg Burn

Transcription

1 Medicare 101 Nov. 9, 2016 Greg Burn

2 Important Note The Centers for Medicare and Medicaid Services (CMS) regulations change on a regular basis. The information in this presentation is provided for general educational purposes only. It is not intended to be, nor should it be construed as, regulatory or legal advice. Be sure to review all information you may provide regarding Medicare with appropriate legal counsel. Regulations apply at both the state and federal level. 2

3 The Big Picture A Sampling of International Health Comparisons Country Per Capita Expenditures on Health Life Expectancy at Birth Infant Mortality Per 1,000 Births USA $9, Japan $3, England $3, Germany $5, France $4, Canada $5, Australia $6, Switzerland $9, Russia $ China $ Sources: CIA World Factbook ( and World Bank (

4 A History Lesson O July 1, 1966: Medicare was authorized by Title XVIII of the Social Security Act O Part B premium was set at $3/month O In 1972, Medicare was expanded to cover those under age 65 receiving Social Security disability payments O Jan. 1, 2006: Part D benefits added When President Lyndon B. Johnson signed Medicare into law on July 30, 1965 at the Harry S. Truman Library, he told the nation that it had all started with the man from Independence. Harry Truman was issued the first Medicare ID card. 4

5 Who pays for Medicare? O Individuals during lifetime with payroll taxes (1.45%) O Employers through payroll taxes (1.45%) O Beneficiaries with premiums, deductibles and cost-sharing in benefit structures 5

6 Medicare as a Share of the Federal Budget, Source: Kaiser Family Foundation

7 Update What is the spending on Medicare? In FY 2016, the federal government spent $595 billion net on Medicare. (Net Medicare at $595 billion = Gross Medicare at $696 billion less Medicare premiums and collections at $101 billion) 7 Source: usgovernmentspending.com

8 Eligibility O Age 65 or older and legal residents of US for at least 5 years O Under age 65 if SSI disability qualified for 24 months O Part A premium waived if they or their spouse have paid Medicare taxes for at least 10 years O ESRD provisions O Dual eligibility with Medicaid 8

9 When and how to enroll in Medicare? Most people enroll in Medicare when they turn 65. A 7-month window exists (3 months prior and 3 months after 65 th birthday). If you re on Social Security, you should receive a Medicare card about three months before your 65 th birthday. If you are not on Social Security, you will need to contact Social Security to enroll in Medicare. This can be done online. You may want to enroll in Part A even if you are employed and on your employer s group coverage. If you re still working and covered under your employer s plan, you may want to delay enrolling in Part B until you retire. Some diagnoses, such as ESRD or ALS, accelerate a person s Medicare eligibility date. Call Medicare at MEDICARE ( ) 24 hours a day, seven days a week with enrollment questions. 9

10 Enrollment / Underwriting O Medicare Supplements Enrollment Period (6-month window at 65 th birthday and enrolled in Part B) Year round (2-month window for loss of coverage, such as retirement) O Medicare Part D AEP, Age-in or SEP Lock-out otherwise Usually underwritten otherwise O Medicare Advantage AEP, Age-in or SEP Lock-out otherwise 10

11 When can you join a Part D drug plan? O When you first become eligible for Medicare the seven-month period that begins three months before you turn 65 (including the month you turn 65) and ends three months after you turn 65 O If you get Medicare due to disability, you can join during the three months before to three months after your 25 th month of disability 11

12 What are the basic parts of Medicare? PART A Hospital stays Skilled nursing Home health Hospice care PART B Doctor s services Durable medical equipment Hospital outpatient care, lab, X-rays Mental health, home health Preventive services 12

13 PART A + PART B = ORIGINAL MEDICARE Original Medicare consists of Part A and Part B Outpatient prescription drugs are not covered under original Medicare No out-of-pocket protection with original Medicare 13

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19 Medicare Part D Two Ways to Get Prescription Drug Coverage 19

20 2016 Outpatient Prescription Drug Coverage Medicare Part D plans have 4 stages: 1. Deductible stage 2. Initial coverage limit 3. Coverage gap (donut hole) 4. Catastrophic coverage 20

21 Part D Benefits O Stage 1 Deductible stage Some MAPD plans have Rx deductibles, some do not O Stage 2 Initial coverage limit $0 - $3,310 total drug cost ($3,700 in 2017) Copays usually apply in this stage 21

22 Part D Benefits O Stage 3 Coverage gap (donut hole) Begins at $3,310 total drug cost ($3,700 in 2017) Ends at $4,850 member out of pocket ($4,950 in 2017) Members receive a discount while in the coverage gap Members will pay no more than 45% (40%) of the plan s cost for brand drugs and 58% (51%) of the plan s costs for generics until their yearly out-of-pocket costs reach $4,850 ($4,950) Discount drugs paid by drug manufacturers for brand name drugs in the donut hole count toward a member s true out-of-pocket amount. This amount will increase each year until

23 Part D Benefits O Stage 4 Catastrophic coverage Begins at $4,851 member out of pocket ($4,951 in 2017) Members pay the greater of: $2.95 for generics ($3.30 in 2017) $7.40 for all other drugs ($8.25 in 2017) OR 5% of total drug cost 23

24 Extra Help Program: Save On Drug Costs O Those who meet certain income and resource limits may qualify for Extra Help from Medicare to pay the costs of Medicare prescription drug coverage. O In 2016, costs are no more than $2.95 ($3.30) for each generic /$7.40 ($8.25) for each brand-name covered drug. O Other people pay only a portion of their Medicare drug plan premium and deductibles based on their income level. O In 2016, Medicare eligibles may qualify if they have up to $17,820 in yearly income ($24,030 for a married couple) and up to $13,640 in resources ($27,250 for a married couple). O For those who don t qualify for Extra Help, their state may have programs that can help pay prescription drug costs. Contact the Medicaid office or State Health Insurance Assistance Program (SHIP) for more information. Individuals can reapply for Extra Help at any time if their income and resources change. 24 Source:

25 2016 Medicare Part B Premium Income Thresholds for New Enrollees High income earners pay more for their Medicare Part B premiums. The income is determined by your tax return two years prior. If your first year on Medicare is 2016, your 2014 modified adjusted gross income (MAGI) will be used to determine your premium amounts. Note: If your income has decreased from two years ago, you may contact Social Security to determine if you are not subject to the higher premium. Single Tax Filer MAGI Limits for Medicare Part B Premiums If MAGI is: NEW ENROLLEES 2016 monthly premium is: MOST EXISTING ENROLLEES 2015 was: Less than $85,000 $ $ $85,001 to $107,000 $ $ $107,001 to $160,000 $ $ $160,001 to $214,000 $ $ Greater than $214,000 $ $ Changes are announced annually (early to mid-november)

26 Comparison Chart: Original Medicare (A & B) vs. Medicare Supplement vs. PDP vs. Medicare Advantage Plan Type Original Medicare (A & B) Medicare Supplement (Plans F, G, N) Medical Inpt. & Outpt. Coverage Prescription Drug Coverage Deductibles, Copays, Coins. Max. OOP Protection Access to all Medicare Providers Marketplace Premium Range Est. Yes No Yes No Yes $104.90* Yes No No Plan F Yes Part B Ded. for G & N Yes Yes $150-$300 PDP No Yes Yes No No $18 to $100 Medicare Advantage (MAPD) KEY DECISION FACTORS Yes Yes Yes Yes (medical) No $0 to $150 *Monthly premium for Part B generally deducted from member s Social Security check. Actual amount may vary depending on income and year of entry into Medicare system. 26

27 Part B and Part D Late Enrollment Penalties 27

28 Part B Late Enrollment Penalty In most cases, if you don't sign up for Part B when you're first eligible, you'll have to pay a late enrollment penalty for as long as you have Part B. Your monthly premium for Part B may go up 10% for each full 12-month period that you could have had Part B, but didn't sign up for it. Also, you may have to wait until the General Enrollment Period (from January 1 to March 31) to enroll in Part B, and coverage will start July 1 of that year. Usually, you don't pay a late enrollment penalty if you meet certain conditions that allow you to sign up for Part B during a Special Enrollment Period. If you have limited income and resources, your state may help you pay for Part A, and/or Part B. You may also qualify for Extra Help to pay for your Medicare prescription drug coverage. Example Your Initial Enrollment Period ended September 30, You waited to sign up for Part B until the General Enrollment Period in March Your Part B premium penalty is 20%. (While you waited a total of 30 months to sign up, this included only 2 full 12-month periods.) You ll have to pay this penalty for as long as you have Part B. 28 Source:

29 The Part D Penalty Can Also Add Up O Late enrollment penalty cost depends on length of time without creditable prescription drug coverage O Penalty is calculated by multiplying 1% of the national base beneficiary premium times the number of full, uncovered months that the member was eligible and went without creditable Rx coverage O Final amount is rounded to nearest $.10 and added to the monthly premium O Since the national base beneficiary premium may increase each year, so will the penalty amount O Penalty stays in force as long as the beneficiary is enrolled in Part D 29

30 A Word (or two) on Agent Oversight and Regulation A K A Be careful who you take to lunch! 30

31 Medicare Marketing Guidelines 125 Pages 31

32 Know Who Pays First if You Have Other Health Insurance or Coverage 32 Source:

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36 Be Sure to Ask About a Most Telling Statistic 2015 Medicare Advantage Health and Drug Plan Disenrollment Reasons Survey Results Report for Carrier XYZ Issued July 2015 by the Centers for Medicare & Medicaid Services Table 1.1 Rates of Voluntary Disenrollment Carrier XYZ Contract # National Average? 13% Significantly Different from National Average? Yes (Lower) or No (Higher) 36

37 Be Sure to Ask About a Another Telling Statistic The Carrier s Star Rating 37

38 Choices, Choices, Choices! A B C D??? 38

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41 What products do Medicare eligibles choose? Data as of July 2016 USA State Six-County Area Total Medicare Eligibles 54,800, , ,643 MA Market Penetration 33.2% 17.2% 27.8% Stand-Alone PDP Penetration Medicare Supplement Penetration 45.3% 50.6% 45.0% 21.9% 25.6% 23.0% Data collected from cms.gov/ma Enrollment by State/County/Contract and Farrah & Associates reports. Market penetrations do not total 100%. Medicare eligibles may enroll in both Medicare Supplement and PDP plans. 41

42 THANK YOU! 42