What is Medicare? Who qualifies?
Medicare is the government financed health insurance program for seniors and others receiving Social Security benefits. All persons aged 65 and over are eligible for Social Security benefits, and disabled persons who have received Social Security for 24 months are eligible for Medicare. Individuals who have Lou Gehrig's disease can receive Medicare immediately upon approval of Social Security Disability Insurance (SSDI).
How does Medicare work?
Medicare has four parts that cover different health care aspects.
Part A pays for hospital stays and other related services like home care, and is free to individuals entitled to Social Security (individuals not entitled to Social Security can purchase Part A coverage for $426 per month in 2013). The deductible for 2014 is $1,216 per 60-day benefit period.
Part B pays for doctor's visits and related costs, and premiums are means-tested, so can range from $104.90 to $335.70 per month in 2013. The deductible is $147 in 2013.
Part C is Medicare Advantage, a program where individuals can opt to receive the same benefits as Part A and B and possibly additional benefits through private companies. These can be various types of insurance, including HMOs, PPOs, SNPs, PFFS or PACE. Subscribers must continue to pay the Part B premium, and possibly an extra premium for Advantage plans.
Part D is Medicare's prescription drug coverage, which can be offered through a Medicare Advantage plan or through a stand-alone plan. Premiums are variable, though assistance is available with premiums and deductibles for low-income persons. Individuals who do not enroll in a Part D plan when eligible will be subject to the Late Enrollment Penalty on premiums should they later sign up for Part D coverage.
Additional coverage is available in the form of Medicare Supplemental Insurance (also known as Medigap policies). These are plans offered by private companies to provide additional benefits including original Medicare deductible and coinsurance coverage, and other benefits. These plans are standardized into Plans A, B, C, D, F, G, K, L, M and N. The factors in choosing supplemental insurance may then largely rely on cost and reputation of the company.
For more in depth information on Medicare topics, please select from the list below. Counselors are available at 303-333-3482 to help with education, enrollment, problems and appeals.You may also find helpful information at Medicare's official site, at the Centers for Medicare and Medicaid Services (CMS), or from Colorado's Senior Health Insurance assistance Program (SHIP).
For more information about 2014 changes to Medicare, watch the clip below:
What do we mean by 'Original' Medicare?
Medicare Parts A and B, together often colloquially known as Original Medicare or Straight Medicare, are the direct government insurance most people think of when they think of Medicare. Together they provide hospitalization and medical services coverage, including doctor's visits, screenings, emergency room care, surgery, medical supplies and equipment, home care, skilled nursing care, hospital inpatient costs and hospice care.
Who is eligible and how much does it cost?
For Parts A and B, anyone 65 and older who is entitled to Social Security is eligible (those who are disabled and have been on Social Security for 24 months are also eligible). Those not eligible for Part A (meaning those individuals or spouses who have not paid into Social Security for at least 40 quarters) can buy-in to Part A (in 2014) for $234 a month (for those with 30-39 quarters) or $426 a month for all others in.
Part B premiums for the upcoming year are means-tested based on your most-recently filed tax return (for 2014 premium, use your 2012 filed amounts):
|Individual Income Limits||Joint Income Limits||Part B Premium|
What is covered?
For hospitalizations in 2014, Part A will pay 100% of inpatient costs for 60 days, after the deductible; 100% of skilled nursing care for 20 days after a 3-day hospital stay, and costs in excess of $152 per day for days 21-100; 100% of hospice care at home, in the hospital or nursing home for terminal patients; will pay for medically necessary home care following a 3-day minimum hospitalization or skilled nursing home stay; up to 3 pints of blood during a hospitalization or nursing home stay.
For doctor's visits and other medical services, Part B pays 80% of approved charge for:
Medicare Part B pays 100% of the cost of preventive services.
Managing Your Medicare
The Initial Enrollment Period is a special period three months prior to, the month of your 65th birthday and three months after in which a person should sign up for the various applicable Medicare services and can do so without any penalties. Most individuals will automatically be enrolled in Medicare during their Initial Enrollment Period. Medicare will mail you your Medicare card and you will receive Original Medicare (Parts A and B) by default. If you do not wish to receive Medicare, you must sign the back of your Medicare card and return it to Medicare to disenroll. If you wish to receive your Medicare coverage through a private insurer (Medicare Advantage/Part C), you must sign-up with a plan during your Initial Enrollment Period.
The General Enrollment Period runs every year from January 1 to March 31 and is the time when you can enroll in Medicare if you did not do so during your Initial Enrollment Period. Coverage will begin effective July 1 of the year of enrollment. Persons will be subject to 10% penalty for each year which they were eligible and did not sign up for Part B after the Initial Enrollment period. In order to enroll in Medicare, individuals should visit their local Social Security office (you can find yours here) or call 1-800-772-1213.
After enrolling in Medicare, you will receive your Medicare card (example) at the address Social Security has on file in approximately 30 days. Individuals should also sign up for MyMedicare.gov, an online management and record-keeping system about your Medicare enrollment, benefit usage, status of claims and customer service venue.
If individuals need to order a replacement Medicare card, they can do so from MyMedicare.gov or from the Social Security Administration. If individuals have questions about Medicare, they can call 1-800-MEDICARE (1-800-633-42273) for personalized assistance.
What are Medicare Advantage Plans?
Though it is a different 'part' of Medicare, Part C or Medicare Advantage is a method for beneficiaries to receive their standard Medicare benefits (Parts A and B) through a private carrier, possibly with additional benefits and/or costs. The federal government pays each Advantage plan a monthly amount to provide the same care as Original Medicare. Medicare Advantage plans may offer additional benefits as well.
There are seven types of Medicare Advantage Plans available in Colorado. Each operates differently in terms of networks, coverage and cost.
How to enroll in a Medicare Advantage Plan
All Medicare beneficiaries may enroll or disenroll from Medicare Advantage Plans during the Annual Election Period from October 15 to December 7 every year, or during their Initial Enrollment Period (three months prior to, the month of, and three months subsequent to the individual's date of Medicare eligibility).
Beneficiaries may receive a Special Election Period if they permanently move to a new service area and lose coverage (63 days to choose a new plan), or if they have both Medicare and Medicaid (can change monthly), or if they move in or out of an institution such as a nursing home or hospital.
Individuals can disenroll by notifying the plan in writing, by phone or by calling 1-800-MEDICARE. Disenrollment will be effective the first of the month following the notice. Disenrollment can also occur for non-payment of premiums after 120 days.
Choosing a Medicare Advantage Plan
Companies offering Medicare Advantage Plans must have them approved annually for sale in certain service areas. All plans may not be available in all areas.
When choosing an Advantage Plan, it is important to consider the network of physicians and specialists, nursing homes, home care agencies, hospitals, durable medical equipment providers and pharmacies to ensure the providers will meet your needs. Beneficiaries should review the formulary for prescription drugs to determine if the drugs they currently are taking are on the formulary and possibly those they may need to take in the future. Individuals should also compare premiums, co-payments and other out of pocket costs.
On the Medicare website, you can search by plans available in your area. Click here to search for plans available to your ZIP code.
What is Part D?
Part D is how Medicare provides prescription drug coverage to Medicare beneficiaries. Coverage is provided solely through private insurance carriers, and is available as a stand-alone prescription drug plan (PDP) or as part of a Medicare Advantage Plan.
Coverage is available for generic and name-brand drugs under a formulary. Plans are not allowed to discontinue coverage of a drug during the course of treatment. Plans must cover at least two drugs in each drug class, except for anorexia, facial hair, weight gain or loss, fertility, cosmetic drugs, cold medicine, vitamins and minerals, and over the counter drugs. Plans must cover most or all drugs for antidepressants, anticonvulsants, antipscyhotics, antiretrovirals, anticancer and immunosuppressants.
Some additional coverage may be available to Medicaid recipients through Extra Help. Denials of drugs can be appealed through the Exception Process, when initiated by a physician.
How to enroll and choose plans
Like enrolling in Medicare's other parts, individuals have a seven month Initial Enrollment Period of three months before, the month of, and three months after the date of Medicare eligibility to enroll in a prescription drug plan.
Individuals may choose and change their prescription drug coverage annually during the Annual Enrollment Period from October 15 to December 7, with new coverage effective January 1. Beneficiaries who receive Medicaid can change plans anytime during the year, with new coverage effective the first of the following month.
When choosing plans, it is important to compare drug coverage, deductibles and co-payments as well as benefits during the coverage gap. Medicare has an online plan finder where individuals can enter their drugs, frequency, and doses to find a plan that fits them best. You can visit the plan finder here. The Colorado Division of Insurance also publishes a stand-alone guide to Medicare Prescription Drug coverage in Colorado, which is available here.
What is the Standard Benefit?
In 2014, after an individual pays the deductible of $310, the prescription drug plan pays 75% of the drug costs until the total annual cost of the drugs reaches $2,850. Then the Medicare beneficiary reaches the coverage gap (or the doughnut hole. The beneficiary is in the doughnut hole when the cost of the drugs is between $2851 and $6455. When the individual is in the coverage gap, the beneficiary is responsible for 47.5% of the cost for brand-name drugs and 72% for generics. Catastrophic coverage resumes after the total cost of drugs exceeds $6455. During catastrophic coverage, the beneficiary pays 5% of drug costs, the prescription drug plan pays 15% and Medicare pays 80%.
As part of health care reform, the coverage gap is being phased out over the next decade. Starting from 2011, beneficiaries have begun receiving discounts and assistance in the coverage gap (before this there was no coverage at all in the gap). In 2014, individuals will receive a 47.5% discount on brand-name drugs in the coverage gap (approximately 31% on generics). This discount will be increased gradually until it reaches 75% in 2020, at which point there will be no gap in coverage between the deductible and catastrophic coverage. The individual will be responsible for 25% of the prescription drug costs.
What is the Late Enrollment Penalty?
Designed to encourage maximum participation in Part D, the Late Enrollment Penalty is an increase in premiums for those who do not sign up for Part D immediately when eligible. Individuals without creditable coverage (meaning prescription drug coverage from another insurer, such as an employer, that is equivalent or superior to Part D) after 63 days from the end of the Initial Enrollment Period, will face the Late Enrollment Penalty. If such individuals should later sign up for Part D coverage, they will pay 1% in addition to the applicable premium for every full month they were not covered.
Individuals who are unable to meet the Part D co-payments may be eligible for Extra Help, a program that is administered through Medicaid to help pay for drugs; they may also be eligible for Medicare Savings Program to pay for Part A and B deductibles, premiums and co-pays.
To talk with a counselor about prescription drug coverage, including assistance with selecting a plan, enrollment questions or questions on Extra Help, call 303-333-3482.
Medicare Supplemental Insurance policies (also known as Medigap policies) are sold by private insurance carriers in order to complement Original Medicare or Medicare Advantage and offer coverage for other treatments and services not approved by Medicare. These policies are regulated by federal and state governments, and must be offered in standardized form. Eleven plans can be offered, but all carriers must offer at least the standard benefit Plan A.
The benefits are standardized so as to be comparable between Plans A, B, C, D, F, F+ (High Deductible), G, K, L, M and N. Plan A or the basic supplemental insurance policy must:
Except for Plans K and L, policies are usually intended to cover deductibles, co-insurance, excesses, and foreign travel. Plans K and L cover percentages of standardized services. The two plans pay 50% and 75% respectively of the following services including Part A and B deductibles, Part B co-insurance and excesses, skilled nursing co-pays, and foreign travel. They also have out of pocket annual limits of $4,940 and $2,400 in 2014, respectively.
The following table summarizes Plans A-N coverage:
|•||•||•||•||•||•||•||50%*||75%*||•||Pays 100% of the Part B
coinsurance except up
to $20 copayment for
office visits and up to
$50 for emergency
|Part B Excess of
* Except for Part A hospitalization and Part B preventive services, which are covered at 100%.
+ High Deductible is $2,140 in 2014
Because Medicare Supplements are standardized, cost and reputation of the insurance company are two factors to be considered before deciding to buy. Insurance companies price plans according to several factors, including the individual's age, projected rate of inflation, and resultant increases in medical costs. In addition to cost comparisons, purchasers should consider the financial stability of the insurance company and the integrity of the sales representative.
Steps to take before choosing a Medicare Supplement
The Colorado Department of Insurance prepares a listing of the costs of Medicare Supplements for comparison shopping and is available here.
To talk with a counselor about Medicare Supplements, call 303-333-3482.
For individuals who receive Part D prescription drug coverage and are low-income, there is assistance available for the costs of deductibles and co-pays. This Extra Help is also known as the Low Income Subsidy (or LIS).
Who is eligible?
To receive Extra Help, persons must be eligible for Medicare Part D and have income less than 100% of the Federal Poverty Level for a full benefit or less than 150% of the Poverty Level for a partial benefit.
What are the benefits?
Benefits vary based on the recipient's income and on living situation. In general Extra Help will pay for a person's monthly drug plan premium for an Extra Help approved plan. It will also pay the annual deductible amount ($310 in 2014), though it will leave $66 for partial subsidy recipients to pay out of pocket. Extra Help will also cover all drugs in the coverage gap, or doughnut hole, or 85% of drug costs for partial subsidy recipients.
Once recipients have spent $2,850 in prescription costs, the coverage gap begins; however, individuals who are receiving Extra Help will continue to pay co-payments between $1.20 and $6.35. Individuals who receive partial subsidy will pay 15% of the co-pay for the drugs.
Onece individuals have reached $6,455 in prescription drug costs, they will enter the catstrophic coverage level. Individuals who are receiving Extra Help (either full or partial subsidy pays will pay between $1.20 to $6.35 for generics and name brand drugs or 5% of the drug cost, whichever is greater.
The variable benefits are summarized below:
|Beneficiaries Eligible||Maximum Income
|Benefits (Deductibles, Co-pays, Out of pocket)|
|Institutionalized in a nursing home or hospital||Deductibles and Co-pays $0.00|
Income ≤ 100% Poverty
Premium Excess of $32.42
Out of pocket-$0
Income > 100% Poverty
or Medicare Savings Enrollees
Premium Excess of $32.42
Out of pocket-$0
|Non-institutionalized (Partial Subsidy)
Income ≤ 150% Poverty
Premium Excess of $32.42
Generics or multi-source drugs that retail under $51;5% for those that retail over $51-$2.55
Name Brands-$6.35 for those with a retail price under $127 and 5% for those with a retail price over $127
Out of pocket-$0
Individuals who in addition to Medicare, receive Medicaid, Supplemental Security Income or a Medicare Savings Program (Qualified Medicare Benefit - QMB, Qualified Individual 1 - QI-1, or Special Low Income Medicare Beneficiary - SLIM-B) will be automatically enrolled in Extra Help. Auto-enrollees may be asked for verification documentation of lawful presence, income and resources by their county department of social services.
Individuals who are not auto-enrolled must apply through the Social Security Administration or individuals can enroll over the phone (1-800-772-1213). To talk to a counselor about completing an application, call 303-333-3482.