New to Medicare Enrollment Criteria

Medicare Part A – Help Pays for Hospital Stays, Skilled Nursing Facility, Home Health Care, Hospice care

• A person can enroll in Medicare A at age 65 if they have worked at least 10 years under Medicare/Social Security covered employment.  People pay toward Part A while they work.  If a person has never worked but their spouse has earned 40 quarters (10 years) they can apply for Medicare A by using spouse’s work record.   If a person is receiving Social Security before they turn 65, they will automatically be enrolled, but if they have never applied for Social Security, they need to take their birth certificate to their local Social Security Office and fill out the forms.  The only reason to delay enrolling in Medicare is if you or your spouse is actively employed and your employer is providing group health insurance.

Medicare Part B  – Pays for doctors medical, and other services (e.g., physical therapy, occupational therapy, etc., lab service, home health care, outpatient hospital services, blood

• If already getting benefits from Social Security, you are automatically enrolled in Medicare Part B starting the first day of the month you turn 65.
    
• If already getting benefits from Social Security, you are automatically enrolled in Medicare Part B starting the first day of the month you turn 65.
     
• If you don’t yet receive Social Security, 3 months before you reach age 65, you should contact Social Security to get enrolled in Medicare Part B. The only reason to delay enrolling in Medicare Part B is if you or your spouse is actively employed and your employer is providing group health insurance.

If you do not take Part B when you are first eligible for Medicare at age 65, you may sign up during a General Enrollment Period. This period runs from January 1 through March 31 of each year. The cost of Medicare Part B may go up 10 percent for each twelve-month period that you could have had Part B but did not take it. Your Part B coverage would become effective the following July and you will have to pay the extra 10% for the rest of your life.

Prescription drug coverage is available to everyone with Medicare. Insurance companies and other private companies approved by Medicare offer the drug plans. Drug plans will vary in monthly premiums, list of covered drugs, deductibles and co-pays, and pharmacies accepting the plan.  It is important to review the list of drugs you take and review the plans every year. You may change plans during the open enrollment November 15 – December 31 every year.

Medicare drug plans vary based on which drugs are covered, your out of pocket costs, and which pharmacies you can use.

• Coverage – Medicare prescription drug plans cover generic and brand name drugs. Each plan can choose what specific drugs they cover in each drug category.
• Cost – Monthly premiums and your share (co-payment) of the cost of your prescription vary depending on which plan you choose.
• Restrictions – Does the plan limit the quantity (how many pills you can get at a time), require prior authorization (before the plan will pay for your prescriptions, your doctor must show the plan that the drug is medically necessary for it to be covered), step therapy (the plan may require a lower cost drug to be tried before the plan will pay for the prescribed drug)?
• Convenience – does your local pharmacy accept the plan; does the plan have a mail order option?

Supplementing Medicare

Medicare is the federal health insurance program for people over 65 or people under 65 who qualify because of a disability.  It is NOT designed to cover all the cost of medical care.  Deductibles, co-payments and medical services not covered by Medicare can be expensive. 

Most Medicare beneficiaries select one of three options to fill these gaps:  (only Medicare approved services are covered)

I.  Purchase a Medigap insurance policy as a supplement to Medicare

• A Medigap policy supplements the Original Medicare Plan to help pay for the “gaps” like co-payments, coinsurance, and deductibles that the Original Medicare Plan does not cover.
• The policies are standardized (A-L), each type of policy offering the same basic benefits no matter which insurance company sells it.  The only difference between policies is the cost. A policy covers only one person; so a couple must each buy separate policies. Private insurance companies sell these policies.
• A person has an open enrollment period for 6 months, beginning on the first day of the month in which you were eligible for Medicare and enrolled in Medicare Part B. During this period, an insurance company: 
                            a. Must sell you a Plan.
                            b. Cannot make you wait for coverage to start.
                            c. Cannot charge more for a Medigap policy because of health problems.
• A Person can get the names of Medigap Policies approved to be sold in Maryland and their yearly costs by referring to http://www.mdinsurance.state.md.us/, Go to consumer information; publications; Medicare; and Medigap policies.  People can also call SHIP at 410-887-2059 and they will send you a list.

II.  Join a Medicare Advantage plan. See list of current plans in the back of your Medicare and You Book.

There are currently five main types of Medicare Advantage Plans:

1.  Medicare Health Maintenance Organizations (HMO) covers all Part A and B services and may provide extra services. People who join a Medicare HMO Plan may be asked to choose a primary care doctor they see first for most health problems.  They usually need a referral to see a specialist (such as a cardiologist) or to get certain services.   People who are considering joining a Medicare HMO and want to keep seeing their current doctor should find out if their doctor is in the plan’s network.

2.  Medicare Preferred Provider Organization (PPO) is similar to an HMO plan but members in a Medicare PPO generally can see any doctor or provider that accepts Medicare, but they will usually pay less if they see the plans network of preferred doctors or specialists. In a PPO, a member does not need a referral to see a specialist.  Each PPO may charge a different monthly premium and co-payment amounts.

3.  Medicare Special Needs Plans (SNP) membership is limited to certain groups of people, such as those with certain chronic or disabling conditions or in some institution like a nursing home.   Medicare Special Needs Plans are Medicare Advantage plans designed to provide focused care management, special expertise of the plan’s providers, and benefits tailored to enrollee conditions.  These plans provide case management, care monitoring, health education, and monitoring tools, if needed, to provide specialized care.
 
4.  Medicare Private Fee-for-Service (PFFS) members can go to any provider that accepts the plan’s terms and conditions of payment, and they may get extra benefits.  A Private Fee-for-Service plan is a Medicare Advantage Plan offered by a private insurance company under contract to the Medicare program.  The private company decides how much it will pay and how much members pay for services.   A member can go to any Medicare-approved doctor or hospital, but that provider must accept the terms and conditions of their plan’s payment.   Members may get extra benefits not covered under the Original Medicare Plan.   Doctors can also join or leave these plans at any time.

5.  Medicare Medical Savings Account (MSA) combines a high deductible Medicare Advantage Plan and a bank account.  These Medicare plans are similar to Health Savings Account plans available outside of Medicare, and they have two parts. The first part is a Medicare Advantage Plan with a high deductible.  The second part is a Medical Savings Account into which Medicare deposits money that the person with Medicare may use to pay health care costs until the deductible is met.  After the deductible is met, Medicare will pay 100% of Medicare covered services.  If the funds are not used, they will remain in the account.

There are three other types of Medicare plans.  One is a Medicare Cost Plan, which is similar to an HMO, but services received outside the plan are covered under the Original Medicare Plan (Kaiser Permanente).  There are Medicare Demonstrations and Pilot Programs that test possible future improvements in Medicare coverage, costs, and quality of care.  Finally, PACE (Programs of All-inclusive Care for the Elderly), combines medical, social, and long-term care services for frail elderly people.

III.  Continue health insurance coverage through an employer retirement plan such as the Federal Employee Health Benefits Program (FEHBP)

Medicare Savings

If a person is income eligible, they can apply for Medicaid, Qualified Medicare Beneficiary Program (QMB) or Specified Low Income Medicare Beneficiary (SLMB), which provides assistance to people with low income and limited assets.

The Qualified Medicare Beneficiary Program (QMB) will pay the premiums, deductibles and co-insurance payments of the Medicare Program for older and disabled individuals who are financially eligible.

The Specified Low Income Medicare Beneficiary Program (SLMB) is similar to QMB but pays only the Part B premium ($96.40 in 2009).

Low Income Subsidy (LIS) Medicare Beneficiaries who qualify based on low income and limited assets will receive a subsidy to pay for Medicare Part D premiums, co-payments, deductible, and coverage gap (donut hole).

Senior Prescription Drug Assistance Program (SPDAP) The State of Maryland will pay up to $25 each month toward the Medicare Prescription Drug plan premium. SPDAP may also pay up to $1,200 for the cost of drugs for people in the “gap” or “donut hole”.

Summary

1.  A person signs up for Medicare A and B at Social Security.

2.  A person needs to review the eligibility for assistance in paying for Medicare Part A, Part B, and Part D (LIS – Low income Subsidy).

3.  If not eligible for assistance, a person needs to get a supplement to Medicare to pay the expenses that Medicare does not pay. Either a Medigap policy, Medicare Advantage Plan, or sign up for their companies retired employee plan if they have one that qualifies.

4.  Make sure you sign up for Prescription Drug coverage.

Revised November 26, 2008