Medicare

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:

Original Medicare (Parts A and B)

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
$0-85,000 $0-170,000 $104.90
$85,001-107,000 $170,001-214,000 $146.90
$107,001-160,000 $214,001-320,000 $209.80
$160,001-214,000 $320,001-428,000 $272.70
$214,001+ $428,001+ $335.17

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:

  • Physician fees
  • Medical equipment and supplies, including oxygen
  • Emergency room services
  • Outpatient surgery
  • Ambulance services
  • Limited podiatry and chiropractic care
  • Eyeglasses (lenses only after cataract surgery)
  • Kidney dialysis services
  • Second surgical opinions
  • Prescription drugs such as injectable cancer drugs
  • Home health care ($1810 each of physical/speech and occupational)
  • Diabetes supplies
  • Prosthetic/orthotic items
  • Smoking cessation counseling (with a smoking related illness)
  • Colorectal screenings (75%)
  • Labs and x-rays (100%)
  • Outpatient mental health services)60%

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.

  • To find a doctor who accepts Medicare in your area, you can search here.
  • To find and compare information on hospitals accepting Medicare (non-VA), click here.
  • To compare Medicare approved nursing homes, click here.
  • To compare Medicare approved home care agencies, click here
  • To compare Medicare approved dialysis centers, click here
  • To download the current Medicare and You handbook, click here.
  • To talk to a Medicare Counselor for more information or specific questions, please contact our office at 303-333-3482.

Medicare Advantage (Part C)

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.

  • Health Maintenance Organizations (HMO): Requires individuals to receive inpatient, outpatient, home care, nursing care, pharmacy benefits, and durable medical equipment from the plan's network of providers. Individuals are required to have a primary care physician. A referral is required to see a specialist. In emergencies, service can be administered by the nearest care provider. Benefits may include things like vision, dental or wellness programs. Most plans offer prescription drug benefits. There is an annual limit on out of pocket expenses. May require higher co-payments or referrals to see specialists or out-of-network providers. Individuals who receive care (other than emergency care) from providers outside of the network will pay the providers "full" usual and customary costs. None of the costs will be covered by the HMO.
  • Cost Medicare Advantage Health Plans (Cost HMO): Uses the same rules are HMOs, however if a beneficiary goes to a provider outside the network, the individual pays the Parts A and B co-pay and deductibles. Individuals may pay a higher additional co-pays as well. Benefits may include things like vision, dental or wellness programs. Most plans offer prescription drug benefits. There is an annual limit on out of pocket expenses. This offers greater flexibility than straight HMOs, but individuals are required to have a primary care physician. Co-pays are less if the individual sees a specialist with a referral from the primary care physician; but a referral is not required. There is an annual limit on out of pocket co-pays.
  • Preferred Provider Organization Plans (PPO): Similar to HMOs, but beneficiaries can see any doctor or provider that accepts Medicare. Individuals do not need a primary care physician. Referrals are not needed to go out of the network. May pay higher co-pays for specialists or other providers without a referral.May include things like vision, dental or wellness benefits. Most plans offer prescription drug benefits. There is an annual limit on out of pocket expenses.
  • Medicare Special Needs Plans (SNP): Individuals who are institutionalized, frail or needing special services in the community can enroll in SNPs if they are available in the service area. The SNP receives higher reimbursement rates from Medicare and in turn often can offer additional services to those offered by original Medicare, like transportation, care management and dental services. All SNPs must offer prescription drug coverage.The individual must have a primary care physician. Usually a referral is needed to see a specialist, except in cases like screening mammograms which do not require a referral.
  • Private Fee For Service Plans (PFFS): Offers the same coverage as Original Medicare, but beneficiaries can go to any provider who is willing to accept the plan's terms of payment. All PFFS plans have a provider network, and some may charge extra to go to out of network providers. Since the plan decides how much to pay the providers, some providers who are not in the network may not treat beneficiaries; or they may treat the beneficiary for a one-time only visit. All providers must accept the payment for emergencies. May have extra benefits such as vision, hearing and wellness programs; but will also have variable deductibles, co-payments and may allow balance billing above Medicare approved amounts. PFFS plans may offer drug coverage. Individual does not need a primary care physician or a referral to see a specialist.
  • Point of Service Plans (POS): Similar to HMOs, but offer some services out-of-network for additional costs. As of 2011, only Kaiser Permanente offers a POS plan in Colorado. This is a plan that allows individuals who leave the service area for extended periods of time to be able to continue to receive health care, i.e., if an individual lives in Denver and wishes to reside in Arizona for the winter months, this is an option to continue to receive health care benefits through Kaiser. Other requirements like having a primary care physician and needing a referral to see a specialist are the same as an HMO.
  • Program for All-Inclusive Care for the Elderly (PACE): Using a day program as the central service for delivery of care, a team of physicians, nurse practitioners, therapists and other specialists use an interdisciplinary approach to delivery care in the home, assisted living or nursing home. In Colorado, this is only available in Metro Denver, Colorado Springs, Pueblo, and Montrose at this time.

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.

  • Medicare Prescription Drug Coverage (Part D)

    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 (Medigap)

    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:

    • Be guaranteed renewable (except for non-payment of premiums)
    • Provide co-insurance for hospitalization for days 61-100 (prior to that there is no co-insurance
    • Provide a lifetime reserve benefit of 365 days of hospitalization coverage in excess of 150 days.
    • Cover the cost of the first three pints of blood that is not replaced.
    • Pay the 20% co-pay of the Medicare approved charges for Part B after the annual deductible.
    • Provide coverage of hospice care co-pays for prescription drugs and respite care.
    • have no waiting list for pre-existing conditions for first time enrollees aged 65 and over; and no more than a six-month waiting period, regardless of other circumstances.
    • Have a 30-day fully refundable premium.

    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:

    Benefit A B C D F F+ G K L M N
    Part A
    deductible
    50% 75% 50%
    Part B
    deductible
    50% 75%
    Part B
    co-insurance
    50%* 75%* Pays 100% of the Part B
    coinsurance except up
    to $20 copayment for
    office visits and up to
    $50 for emergency
    department visits
    Part B Excess of
    Approved Costs
    Skilled Nursing
    Co-insurance
    50%* 75%*
    Foreign Travel
    Emergency
    50%* 75%*

    * 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

    • Review 'Choosing a MediGap Policy', the guide prepared by the federal Centers for Medicare and Medicaid Services (CMS) at this website.
    • Research the Insurance Company
      • Check with an independent company such as Standard and Poor, or Weiss Research Inc, for financial ratings. Call your local library or the Colorado Division of Insurance (1-800-930-3745) for a referral.
      • Ask your physician(s) bookkeeping department how efficiently the company processes claims.
      • Does the insurance company have an arrangement with Medicare to automatically receive and pay claims not covered by Medicare?
      • Make a point to review the company's billing procedures and make certain they are acceptable to your way of doing business.
    • Don't do business with an insurance agent (or company representative) who:
      • Is unable to explain the policy and answer all questions to your satisfaction.
      • Doesn't remind you of the 'free look' period, when you can cancel the policy and get a full premium refund.
      • Acts impatient or tries to rush you into making a commitment.
    • Comparison shopping will likely precipitate telephone contacts from people you are not familiar with. Never give any information over the phone. Make it a rule to only provide identifiable information in writing on official documents and applications.

    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.

    Medicare Extra Help for Low Income Persons

    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
    (2013)
    Maximum Resources
    (2013)
    Benefits (Deductibles, Co-pays, Out of pocket)
    Institutionalized in a nursing home or hospital Deductibles and Co-pays $0.00
    Non-institutionalized
    Income ≤ 100% Poverty
    $931/single
    $1261/couple
    $8,580/single
    $13,620/couple
    Deductible-$0
    Premium Excess of $32.42
    Generics-$1.20
    Name Brands-$3.50
    Out of pocket-$0
    Non-institutionalized
    Income > 100% Poverty
    or Medicare Savings Enrollees
    $1313/single
    $1765/couple
    $8,580/single
    $13,620/couple
    Deductible-$0
    Premium Excess of $32.42
    Generics-$2.55
    Name Brands-$6.35
    Out of pocket-$0
    Non-institutionalized (Partial Subsidy)
    Income ≤ 150% Poverty
    $1396.25/single
    $1891.25/couple
    $13,300/single
    $26,580/couple
    Deductible-$63.00
    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.