UNDERSTANDING YOUR HEALTH INSURANCE CHOICES This booklet will provide you with a general overview of health insurance plan types, common terminology and factors to consider when choosing health insurance. The information is divided into two categories: the first category is for those who may be eligible for Medicare, and the second category is for those who may be eligible for private health insurance. The distinction between government sponsored healthcare plans, such as Medicare, and private health insurance plans is very important as the rules, benefits, and design of these plans can differ greatly. While there are many government healthcare plans, such as the Veterans Administration (VA), Medicaid, TRICARE, employer sponsored health plans for retirees, and others, this booklet primarily focuses only on Medicare, the largest of all government healthcare plans. The most common type of private health insurance is offered through your employer and likely administered by companies you may be familiar with such as Aetna, Cigna, and Kaiser, just to name a few. You may also purchase a private health plan through a Health Insurance Exchange (Affordable Care Act) or on your own through a third-party healthcare broker. While much of the terminology and information is similar between the two types of coverage, this document will highlight a few key differences which will help you as you make decisions that are best for your healthcare needs.
TABLE OF CONTENTS Choosing a Plan Considerations and Choices 4 Medicare Plans Plan Types 5 Eligibility 5 Extra Help 7 Coverage Gap (Donut Hole) 7 Plan Rating System 8 How to Enroll 8 Summary Checklist 8 Private Health Insurance Understanding Your Private Health Insurance 10 Considerations and Choices 11 Understanding the Language 11 Glossary Medicare/Private Health Insurance Glossary 14 References and Resources 16
MEDICARE 3
CONSIDERATIONS WHEN CHOOSING A PLAN Considerations Before and During Enrollment Every fall, all Medicare plans and the majority of private insurance plans offer an open enrollment period to allow you to sign up for the plan you need for the coming year. Currently, Medicare open enrollment is October 15 to December 7, however be sure to verify the enrollment dates each year on the Medicare website. For the health insurance exchange, open enrollment is November 1 through December 15. If you receive coverage from your employer, ask your Human Resources department about your open enrollment period, and whether or not any action is required (active/passive enrollment). As the plan you choose has a direct effect on the benefits you and in some cases, your family, receive and how much it will cost, the considerations below are provided as a guide to help you make the most of your open enrollment opportunity. What type of changes should you look for during open enrollment? Every year health plans may make changes to coverage and benefits. Even if you like your plan and want to keep the same one, it is important to review every year and learn as much as you can about your plan. We have highlighted a few possible changes below that may be important in this review. One important change to look for is a change to the prescription medication formulary (list of medications covered under a specific plan). While a change to the prescription medication formulary is not the only type of change to look for, formulary changes often create the most financial difficulty. 1. A plan may impose restrictions on the amount of medication you can get per refill. 2. A plan may request additional information from your doctor before granting approval for the prescription. This is sometimes referred to as a prior authorization but may be referred to differently by insurance company (example: request for additional information). 3. A plan may no longer cover costs of your medication, or may change the amount it covers by moving the medication to a different tier (example: tier 2 to tier 4). 4. A plan may require you to fill your prescriptions at a specific in network retail pharmacy or only by mail order pharmacy. In addition to these prescription medication formulary changes, plans may change the physicians and hospital networks that are covered year to year. Confirming your current physician is in-network is important in order to keep your out-of-pocket costs as low as possible. 4
CHOOSING YOUR MEDICARE PLAN When choosing Medicare coverage each year, it is important to look beyond the monthly premium (cost). Medicare plans vary greatly and many times choosing a plan with the lowest monthly premium does not necessarily mean you are choosing the least expensive plan. Medicare Part D and Medicare Advantage plans tend to change the most from year to year, so evaluating these plans before choosing is very important. A good habit to develop is to check your plan every year for needed coverage and benefits prior to enrollment/re-enrollment. What is a Medicare plan? When we refer to a plan, we are simply speaking about the particular set of benefits you have chosen. Medicare offers many options for healthcare plans including Medicare Part D prescription drug coverage, Medicare Advantage plans and others Eligibility for Medicare IIn general, you may qualify for full Medicare benefits at age 65 or older if: you are a U.S. citizen or a permanent legal resident who has lived in the United States for at least five years; and you or your spouse has worked long enough to be eligible for Social Security or railroad retirement benefits usually about 10 years of work even if you are not yet receiving these benefits; or you or your spouse is a government employee or retiree who has not paid into Social Security but has paid Medicare payroll taxes while working. There are other ways to qualify; check with Medicare to find out whether or not you may be eligible. Please see the resource guide at the end of this booklet. 5
What are the A,B,C,Ds of Medicare Plans? Medicare Part A - This is sometimes referred to as Original Medicare along with Part B and this generally covers inpatient care in facilities such as hospitals and skilled nursing facilities. Part A also covers hospice care and limited home health care. In some cases, beneficiaries do not have to pay a premium for Part A. Medicare Part B - This covers doctor visits, medically necessary services and supplies, preventive services, and certain other items and services. Beneficiaries typically must pay a premium to receive Part B coverage. Part B also covers a limited number of prescription medications, normally those medications that are administered in the doctor s office. Medicare Part C - This is more commonly referred to as Medicare Advantage and these plans represent another way you can get your Original Medicare, Part A and Part B, coverage. Most Medicare Advantage plans also include prescription drug coverage. These plans are run by private companies that contract with Medicare to provide benefits. These plans may also offer, for an additional price, supplemental benefits such as vision, hearing, and dental care. One additional consideration with Medicare Advantage Plans is that these plans do not allow the use of Medigap supplemental policies. If you have or are considering a Medigap Plan, you should factor this into your decision to purchase a Medicare Advantage Plan. Medicare Part D - This program offers outpatient prescription drug coverage to people with Medicare. Part D programs can normally be purchased as a stand-alone prescription drug plan to work in conjunction with Original Medicare coverage. Medigap - These are supplemental insurance plans, sold and managed by private companies, that can help pay some of the healthcare costs that Original Medicare Part A and B do not cover, such as copays, coinsurance, and deductibles for medical services. Some Medigap plans may offer coverage for services such as medical coverage for travel outside of the United States. Each Medigap plan offers different coverage so researching your plan choices is very important. When you have a Medigap plan, Medicare pays its share of the Medicare approved amount for covered healthcare costs, after which your Medigap policy pays its share in the same way most supplemental insurance plans work. Two important factors to keep in mind regarding Medigap plans: A Medigap supplemental plan may not be used in combination with Medicare Advantage Plans (Medicare Part C) A Medigap policy only supplements your Medicare Part A and Part B; Medigap does not replace Medicare Part A and B To learn more about Medigap plans and rules, visit www.medicare.gov 6
Do you qualify for Extra Help? For those with Medicare Part D, there may be extra help available to cover the cost of prescription drugs. Medicare offers a Low-Income Subsidy or Extra Help program, which is designed to provide lower-cost medications and benefits to patients who meet certain financial criteria. In most cases, those who qualify receive reduced premiums, deductibles and copay amounts on their prescription drugs. To get more information on this program or to check your eligibility and apply, you can call 1-800-772-1213 or visit the website at Medicare Extra Help. What is the Coverage Gap or Donut Hole? Most Medicare Part D plans have a coverage gap, which is often referred to as the donut hole. The coverage gap or donut hole is simply the gap in dollar terms between your initial coverage limit and the time you enter catastrophic coverage. The amount of these limits is set by Medicare each year. It is very important to understand how you may be affected by this coverage gap and any changes that take place from year to year. 2019 Donut Hole 2019 Coverage Gap or Donut Hole Beginning in 2019, Medicare Part D patients will pay 25 percent of the cost of all their prescription drugs from the time they enter the gap until they reach catastrophic coverage. In 2019, patients will enter the coverage gap, or donut hole, after they have spent $3,810 and will exit the coverage gap when they have spent $5,100. Medicare Part D patients will receive a 75% donut hole discount on the total cost of their brand-name drugs while in the donut hole. The discount includes, a 70% discount paid by the brand-name drug manufacturer and a 5% discount paid by your Medi care Part D plan. The 70% paid by the drug manufacturer combined with the 25% you pay, count toward your donut hole exit point. Example 1: If you are in the 2019 donut hole and your generic medication has a retail cost of $100, you will pay $37. And the $37 that you spend for a formulary drug will count toward your 2019 true out-of-pocket spending limit or TrOOP or Example 2: If you reach the 2019 Donut Hole and purchase a brand-name medication with a retail cost of $100, you will pay $25 for the formulary medication, and receive $95 credit toward meeting your 2019 out-of-pocket spending limit or Donut Hole exit point. 7
CONSIDERATIONS WHEN CHOOSING A PLAN Can you stay with your doctor(s)? It is critical to review the plan to make sure your healthcare providers are in the plan network. Using healthcare providers and facilities that are out of the plan network may increase your out-of-pocket costs drastically. Talk with your healthcare providers to determine which plans they participate in and whether they expect to stay in the plans long term. Are you using the Star Rating System? Medicare uses a 5-star rating scale to rate plans on quality and performance for the types of services they offer. A growing number of plans have achieved 4 and 5-star ratings in recent years, making it well worth the time to research these plans. Plan finder Medicare s website offers a Plan Finder tool that allows you to sort and compare plans in your area and provides details on how plan ratings were achieved. The plan finder tool can be found here: www.medicare.gov/find-aplan/questions/home.aspx?aspxautodetectcookiesupport=1 How to enroll Many experts now recommend completing your actual enrollment over the phone with Medicare (1-800-MEDICARE or 1-800-633-4227) or online to create an official record of your selection. Having a record may be crucial if you find errors in your enrollment and need to work with Medicare to have your selections updated. The Medicare Rights Center maintains a free telephone hotline (1-800-333-4114) that can walk beneficiaries through the differences between traditional Medicare plans, prescription drug plans and Medicare Advantage Plans. Checklist for enrollment: When choosing a new Medicare plan or re-enrolling for a plan, ask yourself the following questions: ü Do I qualify for the Extra Help plan (Low Income Subsidy)? If so, when will I apply? ü What benefits do I need most in my plan? ü Does my current plan, or the plan I am considering, cover the medications I need? ü What expenses will I incur through the plan I am considering? ü Are my doctor, preferred hospital and pharmacy considered in network with the plan I am considering? ü Have I compared the benefits and costs of Medicare Part D plans? ü Is a Medigap policy right for me? ü Does my plan have a strong rating? ü Do I have all the information I need to enroll in my chosen plan? 8
PRIVATE HEALTH INSURANCE 9
UNDERSTANDING YOUR PRIVATE HEALTH INSURANCE A private health insurance plan pays a portion of your covered healthcare services if you get sick or injured and must visit a doctor s office or hospital. Some plans also specify that the insurance company will pay a portion of your preventative healthcare services, such as paying for annual physicals or immunizations, and some medications. However, what an insurance plan will cover and how much it will pay can vary greatly depending on the policy you choose. The policy spells out what the insurance company will pay for and how much of the bill (out-of-pocket costs) you will have to pay. For example, the policy may cover an office visit, but you may have to pay a $20 co-payment. Or, the policy may not cover anything until you ve paid a specific out of your pocket amount, which is known as a deductible. These deductibles and co-payments, along with any other non-reimbursable expense you may pay, is referred to as an out-of-pocket expense. Other policies may have coinsurance, which is a percentage of the bill that you re required to pay, this may be in addition to your deductible and co-payment. The total out-of-pocket costs you may incur may be capped by a policy s out-of-pocket maximum. You may reach those out-of-pocket costs through payments toward your deductible, through copays or coinsurance. The policy will also state the amount you must pay each month for the coverage, known as the premium. 10
CONSIDERATIONS WHEN CHOOSING A PLAN What counts as an out-of-pocket cost? An out-of-pocket cost is the amount paid by a patient. Out-of-pocket costs are payments toward your deductible, co-payment, or coinsurance. Once you have reached the out of pocket maximum, the insurance company pays all of your expenses and you have to pay only your monthly premium. You may also have to pay out-of-pocket costs for any medical benefits that your health plan doesn t consider covered services. Out-of-pocket maximum This is the maximum amount you will have to pay for healthcare services. The out-of-pocket maximum resets each year (generally, January 1st along with your deductible). As an example, if your plan has a $3,000 out-of-pocket maximum, once you pay $3,000 in deductibles, coinsurance, and co-payments, the health plan will pay 100% for any covered services above that amount for the remainder of the year. What is an insurance premium? The premium is the amount you are required to pay to maintain health insurance coverage. Premiums are most commonly paid monthly. If your plan is sponsored or provided by your employer, your employer pays their portion of the monthly premium and typically deducts the remainder from your paycheck. What are annual deductibles? A deductible is the amount you pay for covered health services before the healthcare plan starts to pay its share of the medical/prescription costs. In other words, the deductible is the amount you must pay before your insurance benefits kick in to help. This varies greatly by plan and affects the amount of your premium (just like your home owner s insurance). This is important to understand when choosing a plan. Plans typically apply the out-of-pockets costs you pay, such as doctor visits and prescriptions, toward your deductible however some plans do not include prescription cost in your deductible; however, so be sure to understand the difference when selecting the right plan to you. In other words, these out-of-pocket expenses are deducted from the total amount you owe on your annual deductible. Once you have satisfied your deductible, your insurance company begins to cover some or all of the costs of your covered services, depending on the specific plan you have chosen. Plan deductibles can vary greatly with deductibles ranging from $500 to $3,000+. Plans with higher deductibles are commonly referred to a high-deductible healthcare plan. As mentioned earlier, some plans offer preventive services, such as routine check-ups and screenings at no cost to you, even before you ve met your deductible. 11
What is coinsurance? Coinsurance is a percentage of costs of a covered healthcare service you pay rather than a fixed dollar amount. For example, if you have a plan with a $1,000 deductible and 20% coinsurance, it would work like this for a $3,000 claim: you are responsible for the first $1,000 to meet your annual deductible, you are then responsible for 20% of the remaining $2,000 ($400) and the insurance company will pay the other 80%. This cost-sharing ends when you reach your out-of-pocket maximum. Key terms that may help you understand your health insurance Provider networks Most insurance plans enroll you in a network of doctors and hospitals which provide care at negotiated rate to patients of these plans. These are referred to as in-network providers and anyone not participating in that network is referred to as non-network providers. This is extremely important as you may have reduced coverage or no coverage at all if you choose to use a doctor or hospital that is not in your plan network. When you are considering different health plans, be sure to look at which providers and hospitals are in the plan network. Group health insurance Most people under the age of 65 have medical insurance through their employers group insurance. This is usually because employers and other organizations can get better rates as they have a large number of people to cover and can get a bulk discount, so to speak. Normally, this translates into premiums that are much lower than those found in individual health insurance plans and are the same price for everyone in the group regardless of their health. What is a Co-pay Accumulator Program? Co-pay accumulators or accumulator adjustment programs are relatively new policies that some pharmacy benefit managers (PBMs) and insurers are using to prohibit manufacturer (pharmaceutical company) co-payment cards or other forms of manufacturer assistance from being used to pay down a patient s deductible or out-ofpocket maximum. So, for example, if a patient must meet a $2,000 deductible for a certain medicine but pays only $100 after the manufacturer coupon, PBMs would only count $100 of cost-sharing towards the patient s annual deductible instead of the original drug price of $2,000. This has the effect of prolonging the patient s obligation toward an annual deductible. Traditionally, a combination of patient payments and manufacturer coupons would count toward the annual deductible and thus lead to patients meeting their annual deductible early in the year. However, the new payment structure created by accumulator adjustment programs could hinder a patient s ability to meet their annual deductible with copay assistance, causing patients to pay significantly more out-of-pocket each year. 12
GLOSSARY 13
Medicare/Private Health Insurance Glossary Coverage - Normally refers to both what an insurance company will cover, for example routine check-ups and wellness visits and the amount that will be covered by the insurance company. Co-payment (copay) - A charge paid by the insured patient for medical services or prescriptions. These charges may be fixed charges (ex: $25.00 for each prescription) or they may be a percentage, (ex: 20% of the cost of a hospital visit).this is normally a fixed payment for a covered service, paid when you receive service. The most common examples of copay is the fixed amount you pay at the time of your doctor visit or the fixed amount you pay for your medications at the pharmacy. Coinsurance - An insurance plan design that requires the insured patient to pay a set percentage of a medical charge or drug cost before the plan (not specific to Medicare) will pay the remaining charges. A common coinsurance plan is 80/20, meaning the patient must pay 20% of all charges before the plan will pay the remaining 80%. Deductible - A specified amount that the insured must pay before the insurance company (not only just for Medicare) will pay its portion. Normally deductible amounts influence the price of an insurance policy (premium) and comes into consider ation when choosing a plan. Essential Services - These are categories of healthcare that are considered critical and are generally exempt from lifetime maximums, they normally fall into 10 categories: Ambulatory patient services; Emergency services; Hospitalization; Maternity and newborn care; Mental health and substance use disorder services; including behavioral health treatment; Prescription drugs; Rehabilitative and habilitative services and devices; Laboratory services; Preventive and wellness services and chronic disease management; Pediatric services, including oral and vision care. Formulary - Sometimes called a drug list, this is the list of medications that are covered for eligible patients under a given insurance plan. Health Insurance Exchange - Also called the marketplace, this is a service for finding insurance plans in the state where you live. More information is available at Healthcare Exchange Low Income Subsidy (LIS) - A government program that evaluates income criteria for patients to see if they qualify for reduced financial responsibility for medical services and prescription medications. This is also referred to as Extra Help by the government. Medicare Advantage Plan - This is a managed healthcare plan within Medicare that often offers a prescription drug plan as part of the package. Advantage Plans are normally run by private insurance companies on behalf of Medicare and have spending limitations built in to control costs. Medigap - A supplemental insurance policy for Medicare beneficiaries, which provides additional coverage for many out-of-pocket costs after Medicare pays its portion of medical bills. Medicare Part B - - Helps cover preventative services such as checkups and screenings as well as some durable medical goods and some prescription medications, normally those administered in your doctor s office. Medicare Part D - The outpatient prescription drug plan for Medicare recipients. 14
Network - A group of physicians, hospitals or other healthcare providers that agree to provide medical services at pre-negotiated prices and rates. Depending on the type of insurance plan you have, staying In network can save a significant amount of money. Out of Pocket Maximum - The most you must pay for covered services in a plan year, after you spend this amount on deductibles, co-payment and coinsurance, the plan pays 100% of covered costs. PDP - Prescription Drug Plan; this acronym is often used on the Medicare website and in literature. Pharmacy Networks - Plans increasingly are using preferred pharmacy networks to deliver medications as a cost-control mechanism. These preferred pharmacies may be a big retailer, such as Wal-Mart (WMT), CVS Health (CVS), or Walgreens (WBA), or a delivery-by-mail option. Make sure you are comfortable with the delivery network for plans that you are considering. Plan Year - This may or may not be the same as calendar year; you should check carefully when signing up for an insurance policy as this can affect when your deductibles and other financial obligations change. Premium - The regular and defined payment for your insurance plan. This is very often monthly but may occur at any regular interval. Prior Authorization - Sometimes called a PA is a requirement that your healthcare provider obtain approval from your insurance company to prescribe a certain medication for you. This is very often a form that your healthcare provider fills out. Step Therapy - Plans may require you to start with an alternate medication rather than the medication your physician prescribes. This is called step therapy and is also sometimes called the fail first model, meaning that you as a patient must prove that you have tried and failed an alternate therapy prior to receiving the medication prescribed for you. Tier - A cost level assigned to prescription medication that determines how much a medication may cost you. Veterans Administration - These plans are often referred to simply as VA or (DoD) plans. These plans are normally reserved for active duty military and veterans and cover more than 9 million people in the United States. 15
References and Resources: ADDITIONAL RESOURCES RESOURCE SERVICE PROVIDED CONTACT INFORMATION WEBSITE Medicare Part D Benefits Check Up Partnership for Prescription Assistance (PPARx) Rx Assist These sites contain complete and detailed information on Medicare plan offerings, key dates and details on eligibility and full contact information for patients. This is a service provided by the National Council on Aging that helps find programs for people ages 55 and older, to pay for some of the costs associated with prescription drugs and healthcare services. The PPARx prescription assistance program is designed to help low-income uninsured patients get free or nearly free prescription medicines through patient assistance programs. PPARx does not directly provide assistance but serves as a resource for locating available programs. Rx Assist provides a directory of Patient Assistance Programs run by pharmaceutical companies. These programs provide free medications to people with financial need. available programs may be located by searching drug or manufacturer name. A federal government website managed by the Centers for Medicare & Medicaid Services 7500 Security Boulevard, Baltimore, MD 21244 National Council on Aging 1901 L Street, NW, 4th Floor Washington, D.C. 20036 Phone: 1-202- 479-1200 Phone: 1-888- 4PPA-NOW (1-888-477-2669) Search for available programs by drug or manufacturer name at the Rx Assist website: www.rxassist.org ADDITIONAL RESOURCES FOR ASSISTANCE www.medicare.gov; www.medicare.gov/part-d/ www.benefitscheckup.org www.pparx.org www.rxassist.org RESOURCE SERVICE PROVIDED CONTACT INFORMATION WEBSITE State Health InsuranceAssistance Program (SHIP) State Pharmaceutical Assistance Programs (SPAPs) Manufacturer s Co-Pay Assistance Programs Payer Specific SHIP is a national program that offers one-on-one counseling and assistance to Medicare beneficiaries and their families. SHIP provides free counseling and assistance via telephone and face-to-face interactive sessions, public education presentations and programs, and media activities. Many states offer help in paying drug plan premiums and/or other drug costs. Programs vary by state and may not be available in every state. For more information about the SHIP program in each state, or to contact an area SHIP counselor, please go to: www.shiptalk.org Search available programs by state at the Medicare.gov website. Details regarding the specific programs and their requirement are contained in the dropdown menus. MANUFACTURER COPAY ASSISTANCE PROGRAMS www.shiptalk.org http://www.medicare.gov/ pharmaceutical-assistanceprogram/state-programs. asp Some pharmaceutical manufacturers offer assistance with out-of-pocket costs for the drugs they sell. Support may include savings on private insurance co-pay, deductible, and coinsurance medication costs. NOTE: Use of co-pay assistance cards is prohibited if prescriptions are paid in whole or in part by any state or federally funded programs, including, but not limited to, Medicare or Medicaid, Medigap, VA, DoD, TRICARE or state pharmaceutical assistance programs (SPAPs). The Department of Health and Human Services does not consider Qualified Health Plans (QHPs) to be federal healthcare programs. EXCEPTION REQUESTS Many prescription drug programs allow a request for coverage determination regarding their drug. In some cases the patient s out-of-pocket may be lowered by request. Policies and specific processes may vary by plan. Contact patient s prescription drug plan or pharmacy benefits managerq2p; l. For general information and resources regarding the Medicare Part D exceptions process: www.cms.gov/ MedPrescriptDrugApplGriev This document is designed to serve as a general reference tool to help you navigate the process of a choosing a healthcare plan. 16 2018, UCB, Inc. All Rights Reserved. USP-MP1216-0044a(1)