Medicare Advantage plan costs

• In a Medicare Advantage plans (private health plans) you generally must pay the Medicare Part B premium. Some Medicare Advantage plans may also charge you an additional premium. In some cases, the plan may pay part of your Part B premium.

• Medicare Advantage plans generally do not make you pay a deductible for doctor visits. However, they may charge a deductible for hospital visits and prescription drugs.

• Medicare Advantage plans usually charge you a copayment—a fixed dollar amount—when you visit a doctor, instead of the 20 percent coinsurance you pay under Original Medicare. 

• All plans must include a limit on the amount of cost-sharing you will pay during the year. These limits include copays and deductibles. These limits may be high, but they will protect you for excessive out of pocket costs if you need a lot of care or expensive treatment. 

• Medicare Advantage plans cannot charge higher copayments than Original Medicare for certain care. This includes chemotherapy, dialysis and durable medical equipment. They can charge you more than Original Medicare for others services, including home health, skilled nursing facility and inpatient hospital services.

• Many Medicare Advantage plans have a network of doctors, hospitals and pharmacies, and provide services only in a certain part of the country. You will have to pay more for your health services if you get care outside of the plan’s network or service area.

• Different plans have different rules for how and where you can get coverage. You may have to pay the full cost of services yourself if you do not follow your Medicare Advantage plan’s rules.

Why should I understand my Medicare health coverage options

There are different ways to get your Medicare benefits. It is important to understand your Medicare options because the way you choose to get your Medicare benefits will affect the care you get. For example, depending on how you get your Medicare benefits, you may only be able to see certain doctors and you may have to get permission before you can access certain health services.

• If you know more about how Original Medicare and Medicare private health plans can work, you will be better equipped to choose the option that works the best for you.
• If you understand how different plans work, you will be more likely to get your care covered. Plan rules for when and where you can get care can greatly affect how much you pay for services. When exploring your coverage options, it is especially important to check whether you will be covered to go to your preferred hospitals, doctors and pharmacies and whether you need to get official permission from the plan (“prior authorization”) before services will be covered.
• Understanding your Medicare options can save you money. Knowing your options may make it easier for you to find a plan that meets your health needs and is affordable for you.
• If you understand your coverage options and choose well, you will have better coverage over the course of the year. In most cases, you can only change how you get Medicare benefits at certain times of the year. Because of this, it is especially important to make careful coverage choices

What will Original Medicare cost in 2011?

As January approaches you may begin thinking about your Medicare costs in 2011. The costs listed below reflect the prices you will pay for Original Medicare beginning January 1, 2011.

For Part A, each month (in 2011) you will pay:

• Nothing if you or your spouse worked and paid Medicare taxes for 10 years or more in the U.S.
• $248 if you or your spouse worked and paid Medicare taxes between 7.5 and 10 years in the U.S.
• $450 if you or your spouse worked and paid Medicare taxes for fewer than 7.5 years in the U.S.

For Part A, (in 2011) your coinsurance will be:

• $0 for days 0-60 each benefit period. A benefit period begins the day you start getting inpatient care. It ends when you’ve been out of the hospital or skilled nursing facility for 60 days in a row.
• $283 each day for days 61-90 each benefit period
• and $566 per day for days 91-150 (lifetime reserve days—total of 60 lifetime reserve days which are non-renewable)

For Part A, (in 2011) your deductible will be:

• $1,132 each benefit period

For Part B, each month (in 2011) you will pay…

If your income is at or below $85,000 ($170,000 for couples)..

• A $96.40 premium each month if have had your premium deducted from your Social Security check starting in or prior to December 2009 and continued to have your premium deducted in 2010 and 2011.
• A $110.50 premium each month if you began having your premium deducted from your Social Security check in 2010 and will continue to have your premiums withheld in 2011. This includes people who are new to Medicare in 2010 who had and continue to have their premiums withheld from their Social Security checks.
• A $115.40 premium each month if you sign up for Part B in 2011, or if you do not have your premium withheld from your Social Security check.

People with high incomes have a higher Part B premium.

Medicare Part B Coverage

Medicare Part B helps pay for many common types of health care:

• Doctors' services.
• Durable medical equipment (DME)¹ if medical in nature and bought or rented from a Medicare-certified provider
• Medicare Part B helps pay for many common types of health care:
  • Doctors' services.
  • Durable medical equipment (DME)¹ if medical in nature and bought or rented from a Medicare-certified provider
  • Outpatient physical, speech, and occupational therapy services provided by a Medicare-certified physical, speech, or occupational therapist.
  • • Chiropractic care when manipulation of the spine is medically necessary to fix a subluxation of the spine. A subluxation is when one or more of the bones of the spine move out of position.
    • Outpatient mental health services.
    • Home health services if you are homebound and have a skilled nursing need
    • X-rays and lab tests.
    • A few prescription drugs, such as immunosuppresant drugs, some anti-cancer drugs, some anti-emetic drugs, some dialysis drugs and physician-administered drugs that persons do not usually administer themselves.
    • Medicare does not cover all health care services. Medicare will only pay for Part B services and items (except most prescription drugs) that are ordered or prescribed by a Medicare-enrolled provider.

Medicare Advantage Change is Coming!

Higher costs are already starting to impact Medicare Advantage plans. A report from research firm Avalere Health found that premiums rose by an average of 14.2% from 2009 to 2010, led by a 31.2% increase in PFFS premiums. The 14.2% average increase assumes that enrollees shopped around for the best deal; Medicare Advantage enrollees who merely stayed in the same plan would have seen rates go up by 22% this year, according to Avalere.
One reason premiums are increasing is because Medicaid will be cutting its payments to Medicare Advantage plans by 3% to 5% in 2010. Even greater reductions in federal spending may be on the way; President Obama has said overpayments to Medicare Advantage plans average 13%. "If a program was supposed to save 5%, compared to original Medicare, but now costs 13% more, something's got to give," says Peter Wetzel, president of American Medicare Counselors, an insurance agency in St. Louis. "Large cuts in federal spending are very possible."
The Medicare Advantage program has become a political football in Washington. The Democratic leadership and the White House have targeted Advantage overpayments-13% more per beneficiary on average than the government pays for seniors in traditional Medicare-as a giveaway to insurance companies that unfairly raises premiums for all Medicare beneficiaries.
Already, there are signs of a pullback. At the end of 2009, insurers Coventry, Health Net, WellCare and Aetna stopped offering individual PFFS Medicare Advantage plans. In 2010, there will be 18% fewer Medicare Advantage plans available to seniors than there were in 2009, according to the Kaiser Family Foundation. Seven percent of the roughly 10 million beneficiaries who are enrolled in these plans will have to switch, according to the federal Centers for Medicare and Medicaid Services.
Ten years ago, large cuts led to fewer people enrolled in Medicare Advantage and more in original Medicare, Senkewicz recalls. "The program was known as Medicare + Choice then. Plans dropped out of Medicare, and many people were displaced." From 1998 to 2002, some 2.4 million Medicare beneficiaries were dropped by HMOs that either left Medicare altogether or reduced their service areas, citing inadequate federal funding. Some of those seniors found other Medicare HMOs, but some moved to original Medicare.
If Medicare Advantage plans lose appeal or availability again, more seniors will turn to original Medicare, which now attracts about three-fourths of all enrollees. Many financial planning clients already prefer original Medicare, which lets participants choose their own doctors. Therefore, planners are likely to find increased interest in Medicare supplement policies, which help fill the gaps in original Medicare coverage, such as the 20% of doctors' bills that are the patient's responsibility.
"Many clients find the selection process extremely confusing," Wetzel says. "Medicare now has Part A (hospital care), B (outpatient medical expenses), C (private plans) and D (prescription drugs). At the same time, Medigap has standardized policies labeled A, B, C, D and so forth."

What insurance can I buy to fill gaps in Original Medicare?

You may be able to buy a supplemental coverage policy that is designed to fill gaps in Original Medicare. Such a policy is called a “Medigap.” Medigaps can help cover Original Medicare deductibles, coinsurances and some additional benefits. If you do not have other supplemental coverage, such as a retiree plan, you might want to consider purchasing a Medigap policy.

There are different standardized Medigap plans, labeled by letters. Not all plans are available in all areas.  

The plans that were available before June 1, 2010, are labeled by letters A-L.

Starting June 1, 2010, there will be two new Medigap plans (M and N), and four plans (E, H, I and J) will no longer be sold.

• If you bought a plan before June 1, 2010, you can usually keep it as long as you like. The benefits will not change. 
• In general, if you are happy with your current plan, there is no reason to switch. If you decide to switch, you should get unbiased advice to make sure that the plan you pick fits your needs.
• Remember that plans are not required to sell you a policy if you are not within a time that you have the right to purchase a Medigap.

Note: Massachusetts, Minnesota and Wisconsin have different standardized Medigap plans that you can buy.

Each Medigap plan pays for a particular set of benefits. Plan A offers the fewest benefits and is usually the least expensive. Plans that offer more benefits, like Plan F, are generally more expensive.

The most popular Medigap plans are C and F, because they cover major benefits and are less expensive than many other plans.

Prior to June 1, 2010 all Medigap plans were required to include the following basic benefits:

• Hospital coinsurance coverage
• 365 additional days of full hospital coverage
• Full or partial coverage for the 20 percent coinsurance for doctor charges and other Part B services
• Full or partial coverage for the first 3 pints of blood you need each year

All Medigap plans sold starting June 1, 2010 (including new plans M and N) must offer these basic benefits and also pay all or part of the hospice coinsurance for drugs and respite care.

Depending on which Medigap plan you choose, you can get coverage for additional expenses Medicare doesn't cover, including:

• Hospital deductible
• Skilled nursing facility coinsurance*
• Part B deductible
• Emergency care outside the U.S.
• At-home recovery**
• Preventive care that Medicare does not cover**
• Excess doctor charges. “Excess charges” refer to the amount above the Medicare-approved amount “non-participating doctors” can charge. New plans M and N will offer some of these additional benefits.  Plan M will cover the basic benefits and also cover half of the Part A deductible, skilled nursing facility coinsurance, and some of the cost of foreign travel emergencies. Plan N will also cover the basic benefits except for $20 copayments for office visits and $50 copayments for emergency room visits. Plan N will also offer foreign travel emergency coverage and cover the full Part A deductible as well as skilled nursing facility coinsurance.

*Note: Medigap plans K and L will only pay for a portion of the cost that Medicare does not cover until you reach a yearly out-of-pocket limit. In some areas, Medigap plans F and J are offered as high-deductible plans, which will only cover you after you have met an annual deductible.  Plans J and high-deductible J will no longer be offered after June 1, 2010. If you currently have plan J or high-deductible J you can keep it as long as you like, and your benefits will usually not change.

**Note: Plans purchased between July 31, 1992, and May 31, 2010, may include the at-home recovery benefit and preventive care that Medicare d

What insurance can I buy to fill gaps in Original Medicare?

You may be able to buy a supplemental coverage policy that is designed to fill gaps in Original Medicare. Such a policy is called a “Medigap.” Medigaps can help cover Original Medicare deductibles, coinsurances and some additional benefits. If you do not have other supplemental coverage, such as a retiree plan, you might want to consider purchasing a Medigap policy.

There are different standardized Medigap plans, labeled by letters. Not all plans are available in all areas.  

The plans that were available before June 1, 2010, are labeled by letters A-L.

Starting June 1, 2010, there will be two new Medigap plans (M and N), and four plans (E, H, I and J) will no longer be sold.

• If you bought a plan before June 1, 2010, you can usually keep it as long as you like. The benefits will not change. 
• In general, if you are happy with your current plan, there is no reason to switch. If you decide to switch, you should get unbiased advice to make sure that the plan you pick fits your needs.
• Remember that plans are not required to sell you a policy if you are not within a time that you have the right to purchase a Medigap.

Note: Massachusetts, Minnesota and Wisconsin have different standardized Medigap plans that you can buy.

Each Medigap plan pays for a particular set of benefits. Plan A offers the fewest benefits and is usually the least expensive. Plans that offer more benefits, like Plan F, are generally more expensive.

The most popular Medigap plans are C and F, because they cover major benefits and are less expensive than many other plans.

Prior to June 1, 2010 all Medigap plans were required to include the following basic benefits:

• Hospital coinsurance coverage
• 365 additional days of full hospital coverage
• Full or partial coverage for the 20 percent coinsurance for doctor charges and other Part B services
• Full or partial coverage for the first 3 pints of blood you need each year

All Medigap plans sold starting June 1, 2010 (including new plans M and N) must offer these basic benefits and also pay all or part of the hospice coinsurance for drugs and respite care.

Depending on which Medigap plan you choose, you can get coverage for additional expenses Medicare doesn't cover, including:

• Hospital deductible
• Skilled nursing facility coinsurance*
• Part B deductible
• Emergency care outside the U.S.
• At-home recovery**
• Preventive care that Medicare does not cover**
• Excess doctor charges. “Excess charges” refer to the amount above the Medicare-approved amount “non-participating doctors” can charge.New plans M and N will offer some of these additional benefits.  Plan M will cover the basic benefits and also cover half of the Part A deductible, skilled nursing facility coinsurance, and some of the cost of foreign travel emergencies. Plan N will also cover the basic benefits except for $20 copayments for office visits and $50 copayments for emergency room visits. Plan N will also offer foreign travel emergency coverage and cover the full Part A deductible as well as skilled nursing facility coinsurance.

*Note: Medigap plans K and L will only pay for a portion of the cost that Medicare does not cover until you reach a yearly out-of-pocket limit. In some areas, Medigap plans F and J are offered as high-deductible plans, which will only cover you after you have met an annual deductible.  Plans J and high-deductible J will no longer be offered after June 1, 2010. If you currently have plan J or high-deductible J you can keep it as long as you like, and your benefits will usually not change.

**Note: Plans purchased between July 31, 1992, and May 31, 2010, may include the at-home recovery benefit and preventive care that Medicare does not cover. Plans purchased on or after June 1, 2010, will no longer include the at-home recovery benefit and the preventive care benefit 

 Before 2006, Medigap plans H, I and J were sold with drug coverage. These plans are no longer sold with drug coverage. If you bought a Medigap plan H, I or J with drug coverage before 2006, you can keep the drug coverage benefit. However, it is not considered as good as the Medicare drug benefit (“creditable”). You may pay a penalty if you do not enroll in a Medicare private drug plan when you are first eligible.  If you do enroll in the Medicare drug benefit, your plan must automatically remove the drug coverage from your benefits and adjust your premium. Plans H, I and J will no longer be offered beginning June 1, 2010. If you purchased one of these plans you can usually keep it for as long as you would like, and your benefits will not change.

oes not cover. Plans purchased on or after June 1, 2010, will no longer include the at-home recovery benefit and the preventive care benefit.

Original Medicare

Original Medicare is the traditional fee-for-service program offered directly through the federal government.

Under Original Medicare, the government pays directly for the health care services you receive. You can see any doctor that takes Medicare (and most do) anywhere in the country. Original Medicare is sometimes called “traditional” Medicare.

Unless you make another choice, you will have Original Medicare. You can also choose to get your Medicare benefits from a Medicare private health plan. Medicare private health plans must offer at least the same benefits as Original Medicare but can do so with different rules, costs and restrictions. You may be automatically enrolled in a Medicare private health plan if your employer sponsors one when you become eligible for Medicare.

In Original Medicare:

• You go directly to the doctor or hospital when you think you need care. You do not need to get permission first.
• You pay a coinsurance for each service you receive ("fee-for-service").

There are limits on how much doctors and hospitals can charge you.

Original Medicare includes:

• Part A (Inpatient coverage)
• Part B (Outpatient coverage)

Part A is sometimes called “hospital insurance” and Part B is sometimes called “medical insurance.” If you want Medicare drug coverage (Part D) with Original Medicare, in most cases you will need to actively choose and join a stand-alone Medicare private drug plan (PDP).

It is a good idea to have supplemental insurance or your out-of-pocket costs with Original Medicare can be very high. You may get supplemental insurance, for example, from an employer or a “Medigap” policy that works specifically with Original Medicare. Supplemental coverage allows you to keep the flexibility of Original Medicare.  If you have low income, you may qualify for “Medicare Savings Programs” (MSPs) that help pay for the out-of-pocket costs of Medicare.

Medicare Part B Coverage

Medicare Part B helps pay for many common types of health care:

•Doctors' services.
•Durable medical equipment (DME)1 if medical in nature and bought or rented from a Medicare-certified provider

Ambulance services if your health requires ambulance transport and you are traveling to or from certain locations.

Many preventive care services

Outpatient physical, speech, and occupational therapy services provided by a Medicare-certified physical, speech, or occupational therapist.

• Chiropractic care when manipulation of the spine is medically necessary to fix a subluxation of the spine. A subluxation is when one or more of the bones of the spine move out of position.
• Outpatient mental health services.
• Home health services if you are homebound and have a skilled nursing need.
• X-rays and lab tests.
• A few prescription drugs, such as immunosuppresant drugs, some anti-cancer drugs, some anti-emetic drugs, some dialysis drugs and physician-administered drugs that persons do not usually administer themselves.
• Medicare does not cover all health care services. Medicare will only pay for Part B services and items (except most prescription drugs) that are ordered or prescribed by a Medicare-enrolled provider.

When can I enroll in Medicare Part D Prescription Plan

If you are enrolled in Medicare Part A and/or Part B and live in your plan’s service area, you can enroll in the Medicare drug benefit (Part D) during your Initial Enrollment Period (IEP).

Your IEP for Part D will usually be the same as for Part B: the seven-month period that includes the three months before the month you become eligible for Medicare, the month you are eligible, and three months after the month you become eligible. For example, if you become eligible for Medicare when you turn 65 on May 15, your IEP will be February 1 to August 31.

Note: If you are disabled and are turning 65 you will qualify for a new Part D IEP.  That IEP will last seven months including the three months before you turn 65, the month you turn 65, and the three months after you turn 65.  If you were paying a Medicare drug benefit premium penalty because you signed up late for Part D before you turned 65, you will no longer have to pay this once your Part D IEP begins.

If you join a Medicare private drug plan during the three months before you are eligible for Medicare, your coverage will start the month you become eligible. If you join a Medicare private drug plan during the month you become eligible, or during the three months afterwards, your drug coverage will start the first of the month after you enroll. You should enroll early during your IEP to make sure that your coverage begins as soon as you are eligible.

If you do not join a Medicare private drug plan during your Initial Enrollment Period, you may not be able to enroll until Fall Open Enrollment (sometimes called the Annual Coordinated Election Period – ACEP), which is November 15 to December 31 of 2010, for coverage beginning January 1. You may also have to pay a premium penalty.

Note: Beginning in October of 2011 Fall Open Enrollment will start earlier and end earlier. Fall Open Enrollment in 2011 and beyond will be from October 15 to December 7. Changes and enrollments made during Fall Open Enrollment will still become effective January 1.

You may also have a Special Enrollment Period to enroll in Part D under special circumstances, including if:

• you get Extra Help; or
• you lose employer drug coverage

What is a Medicare HMO

Medicare Health Maintenance Organizations (HMOs) are private companies that are paid by the federal government to provide individuals with Medicare-covered health benefits. Some HMOs offer additional benefits such as vision and hearing care. Medicare HMOs must cover all Medicare-covered services.

If you join a Medicare HMO, you still have Medicare rights and protections.

You must have both Medicare Part A and Part B to join, and generally must continue to pay your Medicare Part B monthly premium. Some Medicare HMOs will pay part of your Part B premium. You cannot join most Medicare HMOs if you have End-Stage Renal Disease (ESRD) unless it is a "Special Needs Plan" that specifically accepts people with ESRD. (If you were already in an HMO when you developed ESRD, you can stay in that plan. If that HMO leaves your area, you can join another HMO in your area.)

You can also get your Medicare prescription drug benefits (Part D) through a Medicare HMO.

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Medicare 2010

The Social Security Administration advises people to apply for Medicare benefits 3 months before age 65. People do not have to be retired to get Medicare. Unlike Social Security (for which the full retirement age is gradually increasing to 67), people can still receive full Medicare benefits at age 65.

Medicare benefits can begin no earlier than age 65 except for some people with a disability or End-Stage Renal Disease.

People who are already receiving Social Security benefits (for example, getting early retirement) will be automatically enrolled in Medicare without an additional application. They will receive a Medicare card and other information about 3 months before age 65 or their 25th month of disability benefits.

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Compare Medicare Options

Medicare Insurance

In the first part of this module we’ll be talking about the basics of Medigap. The topics we’ll cover are:

•An overview of Medigap

•The benefits of Medigap

•The different standard Medigap plans available

•Medigap costs

•Where to get more information

 

  

What is a Medigap policy?

Original Medicare pays for many health care services and supplies, but it doesn’t pay all of your health care costs. There are costs you must pay, like deductibles, coinsurance, and copayments. These costs are sometimes called “gaps” in Medicare coverage.

A Medigap policy (also called Medicare Supplement Insurance) is a health insurance policy sold by private insurance companies to fill the “gaps” in Original Medicare coverage. The companies must follow Federal and state laws that protect people with Medicare. The front of the Medigap policy must clearly identify it as “Medicare Supplement Insurance"

LOSE WEIGHT FAST

Why the Different Plans?

Medicare has the following parts:

•Part A helps pay for inpatient hospital stays but also helps cover skilled nursing care, home health care, and hospice care.

•Part B helps cover medically necessary services like doctors visits and outpatient care.  Part B also covers some preventive services including screening tests and shots, diagnostic tests, some therapies, and durable medical equipment like wheelchairs and walkers.

•Part C is another way to get your Medicare Benefits.  It combines Parts A and B, and sometimes Part D (prescription drug coverage).  Medicare Advantage Plans are managed by private insurance companies approved by Medicare.  These plans must cover medically necessary services.  However, plans can charge different copayments, coinsurance, or deductibles for these services.

•Part D Medicare drug coverage helps pay for outpatient prescription drugs.

 

People can choose to get Medicare health care coverage in several ways. The Medicare plan people choose affects their costs, benefits, and convenience, and their doctor, hospital, and pharmacy choices. No matter how people choose to get their Medicare health care, they are still in the Medicare Program.

Original Medicare is available nationwide. It is also known as “fee-for-service.” We will talk about this more in depth in a few minutes. However, there are other plans besides Original Medicare that people can choose to get their Medicare health coverage.

Congress created Medicare Advantage, also called Medicare Part C, to let private insurance companies offer choices in coverage to people with Medicare. There are several types of Medicare Advantage Plans, as well as other types of Medicare Plans, which we will discuss in a few minutes.

Some people get their Medicare prescription drug coverage as part of these Medicare Advantage Plans and other Medicare plans. There are also Medicare Prescription Drug Plans that add coverage to Original Medicare and some other Medicare plans.