Medicare Basics Choosing the Right Medicare Coverage Option - - PowerPoint PPT Presentation

2020

Medicare Basics

Choosing the Right Medicare Coverage Option

Presented by: Darrick Tarvin, License #0B64077 (CA Independent Licensed Insurance Broker/Agent) Tarvin Insurance Services, LLC This event is for educational purposes only. No plan-specific benefits or details will be shared.

Medicare Basics

• I. What is Medicare?
• II. Enrolling into Medicare
• III. Two Main Choices for Medicare Plan Coverage:
• 1. Medicare Advantage Plans (HMO or PPO)
• 2. Medicare Supplement (Medigap) Plans
• IV. Medicare Part D Prescription Drug Coverage
• V. Extra Help
• VI. Enrollment Timeframes

This event is for educational purposes only. No plan specific benefits or details will be shared.

Today’s Program

Date: 10/07/2020

• Medicare (also called Original Medicare) is health

insurance for persons:

• Age 65 or older
• Under age 65 that have received Disability benefits for 24 months
• Any age for persons that have end-stage renal disease (ESRD) or Lou

Gehrig’s disease (ALS)

• Medicare & You 2018, Pg. 15
• I. What is Medicare?

Part A - Inpatient Hospital Coverage* Part B - Medical & Outpatient Coverage* Part C - Medicare Advantage HMO and PPO Plans Part D - Prescription Drug Coverage

*Only Medicare Part A and Part B will appear on your red, white and blue Medicare card.

• Medicare & You 2018, Pg. 15

Medicare Has Four Different Parts

Medicare Card

Medicare Part A

(In-Patient Hospital Coverage)

• Most pay no premium for Medicare Part A.
• Was paid for by you or your spouse through payroll taxes

while working.

• Helps cover inpatient care in hospitals, skilled level of

nursing care in nursing facilities (not custodial or long- term care), hospice, limited part-time medically necessary home health care, and more.

• Medicare & You 2018, Pg. 26, 29-33

• You pay $144.60 per month for Medicare Part B, or more,

depending on your income.

• Premium deducted from your Social Security benefit or

you’ll receive a quarterly bill in the mail.

• Helps cover medically necessary doctor services,
• utpatient care, tests, durable medical equipment,

limited home health care, preventive services, and more.

• Medicare & You 2018, Pgs. 26, 27, 34-59

2020 Medicare Part B

(Medical & Outpatient Coverage)

Higher Income Medicare Beneficiaries Pay More For Medicare Part B

• If your filing status and yearly income reported on your tax

return 2 years ago (in 2018) was above: $87,000 - Individual tax return $174,000 - Joint tax return

• Your Medicare Part B premium will be higher.
• Increase based on the “Income-Related

Monthly Adjustment Amount” (IRMAA)

• Medicare & You 2018, Pg. 26-27

2020 Medicare Part B IRMAA Premiums

If your filing status and yearly income reported on your tax return 2 years ago (in 2018) was above:

$8,000 up to $109,000 – Individual tax return $174,000 up to $218,000 – Joint tax return You pay $202.40 per month $109,000 up to $136,000 – Individual tax return $218,000 up to $272,000 – Joint tax return You pay $289.20 per month $136,000 up to $163,000 – Individual tax return $272,000 up to $326,000 – Joint tax return You pay $376.00 per month

2020 Medicare Part B IRMAA (cont.)

If your filing status and yearly income reported on your tax return 2 years ago (in 2018) was above:

$163,000 and less than $500,000 – Individual tax return $326,000 and less than $750,000 – Joint tax return You pay $462.70 per month $500,000 or above – Individual tax return $750,000 and above – Joint tax return You pay $491.60 per month

• www.medicare.gov

• II. Enrolling Into Medicare
• Medicare usually starts on the first day of the month

you turn age 65.

• If receiving Social Security or Railroad Retirement, you’ll get

your Medicare card in the mail 3 months before your 65th birthday

• r 25th month of disability benefits.
• If you don’t receive your card in the mail, contact:

Social Security: 800-772-1213 (TTY: 800-325-0778) Monday through Friday 7:00 am to 7:00 pm Railroad Retirement: 877-772-5772 (TTY: 312-751-4701) www.medicare.gov

• Medicare & You 2018, Pg. 19

Enrolling Into Medicare (cont.)

• If not receiving Social Security or Railroad Retirement

benefits, you enroll with Social Security to get your Medicare card.

• To enroll, contact:

Social Security: 800-772-1213 (TTY: 800-325-0778) Monday through Friday 7:00 am to 7:00 pm Railroad Retirement: 877-772-5772 (TTY: 312-751-4701) www.medicare.gov

• Medicare & You 2018, Pg. 20

Enrolling Into Medicare (cont.)

• INITIAL ENROLLMENT PERIOD

You may enroll into Medicare 3 months before the month you turn age 65, your birthday month, and up to 3 months after your birthday month.

• If you enroll within 3 months before your birthday month,

Medicare will start on the first day of your birthday month.

• If you enroll during your birthday month or within 3 months

after your birthday month, Medicare will start 1-3 months after signing up.

• Medicare & You, 2018, Pg. 21

Enrolling Into Medicare (cont.)

• GENERAL ENROLLMENT PERIOD

January 1st to March 31st

• If you didn’t enroll into Medicare during the Initial

Enrollment Period, you can enroll between Jan. 1st to March 31st every year.

• Coverage will start July 1st
• You may incur a late enrollment penalty
• Medicare & You 2018, Pg. 22

Covered by Employer Group Plan

• If covered by an employer-sponsored group health plan, based
• n current employment with 20 or more employees, you can

delay enrollment for Medicare Parts A and B with no penalty.

• However, when employment or group coverage ends,

whichever happens first, you have 8-months to enroll for Medicare Parts A and B with no penalty. ✓

Check with your group plan on how Medicare works with your group coverage.

• Medicare & You 2018, Pg. 21-22

Covered by Employer Group Plan and have Medicare Part A Only

• You may delay enrolling in Medicare Part B with no penalty if

group health plan is based on current employment and has 20

• r more employees.
• However, once employment or group plan ends, you have

8 months to enroll in Part B with no penalty.

✓ Check with your group plan on how Medicare works with your group

coverage.

• Medicare & You 2017, Pgs. 23, 24

Covered by Employer Group Plan and want to enroll in Medicare Part B

• If you have Medicare Part A only and want to enroll in

Medicare Part B, you need to complete two Medicare Part B enrollment forms (employer completes one form, you complete the other) and return the two forms to the Social Security

• ffice.

Health Savings Accounts

• If you have a Health Savings Account (HSA) and group health

insurance based on current employment, you may not want to join Medicare Parts A or B.

✓ Check with your group plan on how signing up for Medicare affects your Health Savings Account.

• Medicare & You 2018, Pg. 23

Covered by COBRA

• If you’re covered by COBRA (Consolidated Omnibus Budget

Reconciliation Act) or a Retiree Plan:

• After employment ends, you have 8-months to enroll into

Medicare Part A or Part B with no penalty.

✓ Check with your plan administrator on how signing up for Medicare affects your Cobra plan.

• Medicare & You 2018, Pg. 22

• III. Two Main Choices for

Medicare Coverage

1. Medicare Advantage Plans

• HMO or PPO plans
• You pay $0 or low

monthly plan premiums

• Includes Part D

drug coverage 2. Medicare Supplement (Medigap) Plans

• You pay monthly

plan premiums

• Part D drug coverage

not included

✓ Must be enrolled in Medicare Parts A & B

• Medicare & You 2018, Pg. 4

• 1. Medicare Advantage Plans

(HMO or PPO)

• Also known as Medicare Part C
• Medicare Advantage Plans combine Medicare Parts A & B

and Medicare Part D drug coverage into one plan.

• Most plans include extra coverage like vision and hearing.
• Dental is usually an optional benefit.
• Medicare & You 2018, Pgs. 65-70

Medicare Advantage Plans HMO or PPO (cont.)

• Each Medicare Advantage Plan has different costs,

copayments, coinsurance, out-of-pocket yearly maximums, and drug coverage.

• Prior authorization required for certain procedures.
• Plans provide worldwide coverage for emergency and

urgently needed services.

• Benefits can change every year.
• Medicare & You 2018, Pgs. 65-70

HMO Medicare Advantage Plans

• You must get your care from the plan’s network of providers

and hospitals (except for emergency or urgent situations). – You select a hospital, medical group, and primary care physician (PCP) from the plan’s network of providers in your service area. – Referrals are required to see specialists.

• Medicare & You 2018, Pg. 71

HMO Medicare Advantage Plans (cont.)

• HMO plans have $0 or low monthly premiums.
• You must pay your Medicare Part B premium.
• Pay copayments or coinsurance for authorized services

received from in-network or out-of-network providers.

• Pay full cost for non-authorized services, except for

emergency and urgent care.

• Part D drug coverage included in most plans.
• Medicare & You 2018, Pg. 71

PPO

Medicare Advantage Plans

• Use in-network plan providers or out-of-network Medicare

providers that agree to accept the plan. – Referrals not required to see specialists. – Pay monthly premium for the PPO plan. – Pay plan deductibles, co-payments or coinsurance for authorized services received in or out-of-network. – Pay higher co-payments/coinsurance out-of-network. – Part D drug coverage included in the plan.

• Medicare & You 2018, Pg. 72

• 2. Medicare Supplement Insurance

(Medigap) Plans

• Medigap Plans supplement Original Medicare and pay

secondary to Medicare.

• You choose any doctor, specialist or hospital, nationwide,

that takes Medicare patients.

• No referrals required to see specialists.
• Prior authorizations and approvals not required.
• Medigap Plans have 10 “standardized” plans that are sold

by various insurance companies.

• Medicare & You 2018, Pgs. 79-82

Medicare Supplement Insurance (Medigap) Plans (cont.)

– Different companies charge different premiums for the same “standardized” Medigap plan. – You pay monthly premiums for a Medigap plan. – You also pay your Part B monthly premiums. – Part D drug coverage not included. You buy a “stand-alone” Part D prescription drug plan. – Medigap plans are Guaranteed Renewable for Life; the benefits cannot be changed and the policy cannot be cancelled other than non-payment of premiums.

• Medicare & You 2018, Pgs. 71-82

• IV. Medicare Part D

Prescription Drug Coverage

• Medicare Part D drug coverage is available to everyone that

has Medicare Part A and/or Part B.

• Medicare does not sell Part D plans.
• To get Medicare Part D drug coverage, you

must enroll in a plan.

• Medicare & You 2018, Pg. 83-86

Two Ways To Get Medicare Part D Drug Coverage

• 1. Buy a “stand-alone” Medicare Part D prescription drug

plan to go with your Medigap plan. Plans are sold by various Medicare-approved companies. OR

• 2. Enroll in a Medicare Advantage HMO or PPO

plan that includes Medicare Part D prescription drug coverage in the plan.

• Medicare & You 2018, Pg. 83

Medicare Part D Formulary & Drug Tiers

• Each Medicare Part D drug plan has a different list of drugs

that it covers called a “formulary”.

• Plans place the drugs into different formulary “tiers”, from

Tier 1 to Tier 6.

• Each tier has different copayments and

coinsurance amounts that you pay.

• Medicare & You 2018, Pg. 91

2020 Part D Four Coverage Stages

Stage 1: Yearly Deductible - $435

• You pay full cost for your drugs until you have paid the $435
• deductible. (Some plans have no deductible.)

Stage 2: Initial Coverage Limit - $4020

• You pay copayments or coinsurance for your drugs,

the insurance plan pays the balance, until the total retail cost of your drugs reaches $4020.

• Medicare & You 2018, Pg. 87

Four Coverage Stages (cont.)

Stage 3: Coverage Gap “Donut Hole”

• After $4020, you will enter the Coverage Gap and pay:

25% of retail price for covered generic drugs 25% of retail price for covered brand drugs

• Until you have paid $6350 in True Out-of-Pocket costs

(TROOP).

• TROOP costs include any deductible, copayment, and

coinsurance that you paid, and the discount you get in the coverage gap on covered brand-name drugs.

• Medicare & You 2018, Pg. 88

Four Coverage Stages (cont.)

Stage 4: Catastrophic Coverage

• After $6350 in annual TROOP costs, you pay:
• $3.60 for generics
• $8.95 for all other drugs
• r
• 5%, whichever is greater, until end of calendar year.
• Drug company sends you a monthly statement.
• Drug company also sends “Annual Notice of Change” (ANOC)

in October informing you of changes for the upcoming year.

• Medicare & You 2018, Pg. 88

Higher Income Medicare Beneficiaries Pay More For Medicare Part D

• If your filing status and yearly income reported on your tax

return 2 years ago (in 2018) was above: $87,000 – Individual tax return $174,000 – Joint tax return – You will pay more per month for your Medicare Part D drug coverage.

• Increase based on the “Income-Related Monthly

Adjustment Amount” (IRMAA)

• Medicare & You 2016, Pg. 109

2020 Medicare Part D IRMAA Amounts

If your filing status and yearly income reported on your tax return 2 years ago (in 2018) was above:

$87,000 up to $109,000 – Individual tax return $174,000 up to $218,000 – Joint tax return You pay $12.20 per month + your Part D plan premium $109,000 up to $136,000 – Individual tax return $218,000 up to $272,000 – Joint tax return You pay $31.50 per month + your Part D plan premium $136,000 up to $163,000 – Individual tax return $272,000 up to $326,000 – Joint tax return You pay $50.70 per month + your Part D plan premium

2020 Medicare Part D IRMAA (cont.)

If your filing status and yearly income reported on your tax return 2 years ago (in 2018) was above:

$163,000 and less than $500,000 – Individual tax return $326,000 and less than $750,000 – Joint tax return You pay $70.00 per month + your Part D plan premium $500,000 or above – Individual tax return $750,000 and above – Joint tax return You pay $76.40 per month + your Part D plan premium

Part D Late Enrollment Penalty

• If you delay enrolling in Part D or have a break in

continuous drug coverage for 63 days or more, and you don’t have other “creditable” drug coverage or Extra Help:

• When you enroll, a late enrollment penalty will be added

to your Part D monthly premium for life.

• Penalty is 1% of the “national base premium”

(which changes every year) multiplied by the number of uncovered months.

• Medicare & You 2018, Pg. 89-91

• V. Extra Help
• A Medicare program that helps people with limited income

and resources pay Medicare drug costs. Also called Limited Income Subsidy (LIS)

• Helps pay monthly plan premiums, deductible, coinsurance

and copayments.

• For more information, contact Social Security:

800/772-1213 (TTY: 800/325-0778) Monday through Friday 7:00 am to 7:00 pm www.socialsecurity.gov/retirement

• Medicare & You 2018, Pg. 97-99

• VI. Enrollment Timeframes

1. Initial Election Period - Turning 65 or new to Medicare. 2. Special Election Periods - Based on different scenarios; such as leaving employer group plan, permanent move, 12-month trial.

• 3. Annual Election Period - Oct. 15th - Dec. 7th

For Medicare Advantage & Part D drug plans only.

• 4. Medicare Advantage Open Enrollment Period - New

For existing Medicare Advantage members only.

• 1. Initial Election Period (IEP)

TURNING 65 or NEW TO MEDICARE

• Enrolling in a Medicare Supplement (Medigap) Plan

You have Guaranteed Issue (no health questions*) for 3 months before to 6 months after your Medicare Part B effective date to enroll in a Medigap plan.

*Special rules apply for persons with ESRD.

• Medicare & You 2018, Pg. 81

Initial Election Period (cont.)

TURNING 65 or NEW TO MEDICARE (cont.)

• Enrolling in a Medicare Advantage HMO or PPO Plan

You may enroll 3 months before to 3 months after the month you turn age 65, with no health questions*.

• Enrolling in a Part D Prescription Drug Plan

Enroll 3 months before to 3 months after your Medicare Part A and/or B effective date, whichever was first, with no health questions.

• May have Medicare Part A and/or Part B.

*Special rules apply for persons with ESRD.

• Medicare & You 2018, Pg. 75

• 2. Special Election Periods (SEP)
• Enrolling in a Medicare Supplement (Medigap) Plan
• You have Guaranteed Issue (no health questions*) for 63

days after group plan ends (or 6 months if you are new to Medicare Part B) to enroll.

• Must be enrolled in Medicare Parts A and B.

✓ Need Certificate of Termination from group plan

• Choosing a Medigap Policy 2017, Pg. 22

LEAVING EMPLOYER-SPONSORED GROUP PLAN

Special Election Periods (cont.)

LEAVING EMPLOYER GROUP PLAN (cont.)

• Enrolling in a Medicare Advantage HMO or PPO Plan
• You have 2 months after group plan ends to enroll*.
• Must have Medicare Parts A and B.
• Enrolling in a Part D Prescription Drug Plan
• You have 2 months after group plan ends to enroll.
• May have Medicare Part A and/or Part B.

✓ Need Certificate of Termination and proof of other drug coverage from your group plan.

*Special rules apply for persons with ESRD.

Special Election Periods (cont.)

12 MONTH TRIAL RIGHT

• If you enroll in a Medicare Advantage Plan when first eligible

for Medicare at age 65 OR

• If you drop a Medigap Plan to enroll in a Medicare Advantage

plan for the first time: You can try the Advantage plan for 12 months and within the first 12 months of joining the Advantage plan, you can enroll in

• r go back to your Medigap plan with no health questions.
• Choosing a Medigap Policy 2017, Pg. 23

• 3. Annual Election Period (AEP)

OCTOBER 15th - DECEMBER 7th Annual Election Period for Medicare Advantage and Part D Drug Plans ONLY.

• All Medicare beneficiaries can join, switch, or drop a

Medicare Advantage Plan* or Part D “stand-alone” Prescription Drug Plan.

• Must have Medicare Parts A & B for Advantage plans and

Medicare Parts A and/or B for drug plans.

• New plan starts January 1st

*Special rules apply for persons with ESRD.

• Medicare & You 2018, Pg. 6

• 4. New Medicare Advantage

Open Enrollment Period (MAOEP)

JANUARY 1st – March 31st Open Enrollment Period for Medicare Advantage Plans

• If you’re enrolled in a Medicare Advantage Plan, you can

switch to a different Medicare Advantage Plan.

• You can disenroll from a Medicare Advantage plan and

return to Original Medicare Parts A & B and enroll in a Medicare Part D drug plan.

• Apply for a Medigap plan, subject to health questions.
• Medicare & You 2019, Pg. 65

Questions?

Thank you for attending.