Medicare Part A | Medicare Part B | Medicare Part C | Medicare Part D

Medicare Part A

Medicare  Part A is the Hospital Insurance portion of Original Medicare. Original Medicare allows you to use ANY doctor, specialist, or hospital that accepts Medicare.   There are no “networks”  of hospitals to you must adhere to; as long as the provider accepts medicare, you can use that provider or facility. You do not need a referral.

ELIGIBILITY

You are eligible for Medicare if:

• you are 65 years or older, and
• you are a citizen or permanent resident of the United States who has lived in US for at least 5 years

• If you are not yet 65, you might also qualify for coverage if you have a disability or End-Stage Renal disease (permanent kidney failure requiring dialysis or transplant).  You are entitled for Medicare after you get disability benefits from Social Security for 24 months.
• Your age is the main determining factor. You do NOT need to retire or receive Social Security benefits in order to be eligible for Medicare.
• Many Medicare beneficiaries are dual-eligible, i.e. they are qualified for both Medicare and Medicaid.

BENEFITS

• Inpatient hospital care (such as critical access hospitals, inpatient rehabilitation facilities, and long-term care hospitals)
• Inpatient care in a skilled nursing facility (not custodial or long term care)
• Hospice care services
• Home health care services

PREMIUM

• Most people age 65 or older don’t have to pay a monthly payment (called premium) for Part A because they or their spouses paid Medicare taxes while they were working – 40 or more quarters of Medicare covered employment

1. INPATIENT HOSPITAL STAY

DEDUCTIBLE

• $1,288 (per benefit period) (year 2016)

COINSURANCE

• $322 (year 2016) per day for days 61-90 of a hospital stay.
• $644 (year 2016) per day for days 91-150 of a hospital stay (Lifetime Reserve Days).
• All costs for each day beyond 150 days

Medicare covers:

• Up to 90 days of inpatient hospital services in each benefit period
• An additional 60 lifetime reserve days

A benefit period begins when you are admitted to the hospital and ends when you have been out of the hospital for 60 days, or have not received Medicare-covered care in a skilled nursing facility (SNF) or hospital for 60 consecutive days from your day of discharge.

Medicare provides 60 lifetime reserve days of inpatient hospital coverage following a 90-day stay in the hospital. These lifetime reserve days can only be used once — if you use them, Medicare will not renew them. Very few people remain in a hospital for 150 consecutive days. In the rare event this does occur, most Medicare Supplement policies would cover additional days

2. SKILLED NURSING INSURANCE

• $161 (year 2016) per day for days 21 through 100 each benefit period.
• All costs for each day after day 100 in each benefit period

ENROLLMENT

•  If you already get Social Security Benefits, then you’ll be automatically enrolled in Medicare Parts A and B effective the first day of the month you turn age 65. Your Medicare Card will be mailed to you about 3 months before your 65th birthday. Enrollment in Part B is optional.
• If you are under 65 and disabled, you’ll be automatically enrolled after you get disability benefits from Social Security for 24 months. You will get your Medicare card in the mail 3 months before your 25th month of disability.
• If you do NOT yet get the Social Security benefits, then you’ll need to apply for Medicare through Social Security three months before you turn 65 – at the start of Initial Enrollment Period.  An Initial Enrollment Period  is a 7-month period that begins 3 months before you turn 65, or, in the case of disability, 3 months before your 25th month of disability.  You can sign up anytime during the Initial Enrollment Period.   However, by waiting until you are 65 or later, your Medicare coverage will be delayed.  Enrollment in Part B is optional.

If you didn’t sign up for Medicare Part A or Part B during the Initial Enrollment Period, you may sign up during the next General Enrollment Period. This period runs from January 1 through March 31 of each year. The coverage will start on July 1 of the year you sign up.  If you aren’t eligible for premium-free Part A and didn’t buy Part A when you were first eligible, your monthly premium may go up 10%. You will have to pay the higher premium for twice the number of years you could have had Part A, but didn’t join. You will have to pay a higher Medicare Part B premium because you could have Medicare Part B and didn’t take it.  Actual increase is 10% for each full 12-month period that you were entitled for the Part B, and the penalty is as long as you have Part B.  You may avoid paying higher premium, if you are entitled for Special Enrollment Period (see below).

There are gaps in coverage concerning Medicare Part A.  For this reason many seniors purchase a Medigap (LINK) plan to protect against charges Part A does not cover.

Medicare Part B

Medicare Part B is a Medical Insurance portion of Original Medicare.  It is optional.  Original Medicare allows you to use ANY doctor, specialist, or hospital that accepts Medicare.    There is no network of doctors that you have to adhere to and you never need a referral.  You are paying a separate amount for each service – fee for service.

ELIGIBILITY You are eligible for Medicare if:

• you are 65 years or older, and
• you are a citizen or permanent resident of the United States who has lived in US for at least 5 years
• If you are not yet 65, you might also qualify for coverage if you have a disability or End-Stage Renal disease (permanent kidney failure requiring dialysis or transplant).  You are entitled for Medicare after you get disability benefits from Social Security for 24 months.
• Your age is the main determining factor. You do NOT need to retire or receive Social Security benefits in order to be eligible for Medicare.
• Many Medicare beneficiaries are dual-eligible, i.e. they are qualified for both Medicare and Medicaid.

BENEFITS

Medicare Part B covers a portion of:

• Doctors’ services
• Outpatient hospital care
• Laboratory tests
• Outpatient physical therapy
• Outpatient speech therapy
• Certain home health care
• Certain ambulance services
• Certain medical equipment and supplies

PREMIUM for Part B

For Most Medicare Beneficiaries enrolling in Medicare in 2016

Your Annual Income:      Your Monthly Premium:*

DEDUCTIBLE

• In 2016, the annual Part B deductible is $166.

COINSURANCE

• You pay 20% of the Medicare approved amount for doctors’ visits after you meet the $167 deductible.  There is no limit in your spending.  For mental health services you pay 45% of the Medicare-approved amount.
• Beginning 2012, beneficiaries will have no cost-sharing for most preventive services.

EXCESS CHARGES

• For services rendered by non-participating providers, a physician may charge a maximum of 115% of the Medicare approved amount.  This 15% overcharge is known as Excess Charges, and you are responsible for them.  This is NOT applicable for Pennsylvania, because in Pennsylvania you cannot charge more than the Medicare approved amount.  This is known as Medicare Overcharge Measure law (MOM).

ENROLLMENT

If you already get Social Security Benefits, then you’ll be automatically enrolled in Medicare Parts A and B effective the first day of the month you turn age 65. Your Medicare Card will be mailed to you about 3 months before your 65th birthday. Enrollment in Part B is optional.

• If you are under 65 and disabled, you’ll be automatically enrolled after you get disability benefits from Social Security for 24 months. You will get your Medicare card in the mail 3 months before your 25th month of disability.
• If you do NOT yet get the Social Security benefits, then you’ll need to apply for Medicare through Social Security three months before you turn 65 – at the start of Initial Enrollment Period.  An Initial Enrollment Period  is a 7-month period that begins 3 months before you turn 65, or, in the case of disability, 3 months before your 25th month of disability.  You can sign up anytime during the Initial Enrollment Period.   However, by waiting until you are 65 or later, your Medicare coverage will be delayed.  Enrollment in Part B is optional.
• If you didn’t sign up for Medicare Part A or Part B during the Initial Enrollment Period, you may sign up during the next General Enrollment Period. This period runs from January 1 through March 31 of each year. The coverage will start on July 1 of the year you sign up.  If you aren’t eligible for premium-free Part A and didn’t buy Part A when you were first eligible, your monthly premium may go up 10%. You will have to pay the higher premium for twice the number of years you could have had Part A, but didn’t join. You will have to pay a higher Medicare Part B premium because you could have Medicare Part B and didn’t take it.  Actual increase is 10% for each full 12-month period that you were entitled for the Part B, and the penalty is as long as you have Part B.  You may avoid paying higher premium, if you are entitled for Special Enrollment Period (see below).

Medicare Part C (Medicare Advantage)

Instead of using the Original Medicare (Part A and Part B), you may decide to enroll yourself into Medicare Part C called today Medicare Advantage Plan.  These plans are offered by private insurance companies, and must be approved by Medicare.  It is not a ‘fee for service’ as in Original Medicare. Instead, Medicare pays a fixed amount every month to insurance companies for the enrolled members regardless whether the services were used by members.

ELIGIBILITY

You are eligible for Medicare Part C if:

• You have both Part A and Part B
• You live in the service area of the plan

BENEFITS

• Plans must enroll anyone who is eligible. The same benefits are offered to all members, no matter what age or health status.  Consequently, pre-existing health conditions cannot be taken into account: enrollment cannot be denied, and the premium cannot be increased because of the health conditions.
• Covers all services that Original Medicare covers (Part A and Part B), except hospice care. (Original Medicare covers hospice care even if you are in Medicare Advantage Plan).
• May offer extra coverage, such as vision, hearing, dental, and/or health and wellness programs
• Can come as Medical only (MA) or may include Prescription Drug Coverage (MA-PD)
• There are several types of plan available: HMO, PPO, PFFS, MSA, and SNP
• Plans have different rules for how you get services.  Most plans are HMO’s.  You must stay “in-netowrk” and you must get referrals from your primary care physician.  Emergencies are exceptions: no referrals are necessary, and services are available anywhere in the U.S.
• You are still a part of Medicare system.  If the private insurance company fails, you are guaranteed the acceptance back into Original Medicare.

PREMIUM /  DEDUCTIBLE / CO-PAYMENT / COINSURANCE

• Each plan typically charges a monthly premium in addition to the Part B premium (although, some plans actually pay the Part B premium). There are additional charges for Prescription Drug Coverage (if applicable), and for Extra coverage (if applicable). The total cost may be higher or lower than you’ll pay under Original Medicare.
• Each plan can charge different out-of-pocket costs.  You normally pay co-payments for each visit or service. The plan may charge you yearly deductible or any additional deductibles.
• Most Medicare Advantage Plans will offer a maximum out-of-pocket yearly limit.

PLAN

•  Medicare places restriction as to when you can enter or leave (for another Medicare Plan) a Medicare Advantage.  These restriction change on a yearly basis, but require changes be made during an enrollment Period.

ENROLLMENT

You can join, switch, or drop Medicare Advantage Plan:

• At Initial Enrollment Period – a 7-month period that begins 3 months before you turn 65, or 3 months before your 25th month of disability. The period includes the 3 months before, the month of, and the 3 months after the triggering event, such as ‘turn 65’.
• At Annual Enrollment Period  – between October 15 and December 7. Your coverage will begin on January 1 of the following year. You may switch between Medicare Advantage plans. You also may switch from Medicare Advantage plan to Original Medicare, or from Original Medicare to Medicare Advantage plan.  Be careful in considering joining Medicare only plan (MA) from another plan (Medicare Advantage or Original Medicare) with Part D coverage – you’ll lose the existing Part D coverage.  Also, if you are in MA-PD plan and you decide to join the standalone Medicare Prescription Drug Plan (PDP), you’ll be dis-enrolled from your MA-PD plan and return back to Original Medicare.
• At Medicare Advantage Disenrollment Period  – between January 1 and February 14.  You can dis-enroll from your current Medicare Advantage plan, but only return to Original Medicare. You can also select a PDP for Part D coverage.
• In certain situations you may be eligible for a Special Election Period (SEP)  that allows you to make changes in your coverage outside of  enrollment periods described above. Examples of SEP are: you’ve moved out of service area, you are qualified for an Extra Help, you have both Medicare and Medicaid, etc.
• People who either have Medicare and Medicaid or qualify for Extra Help can switch plans every month.
• Normally enrollment is on calendar year basis, starting the date your coverage begins.

Medicare Part D (Medicare Prescription Drug Plan)

There are two types of Medicare Part D.  If you are using Original Medicare (or Medicare Advantage Plan of PFFS/ MSA types), use a stand-alone Medicare Prescription Drug Plan (PDP).  PDP is optional. It is run by private companies approved by Medicare.  Alternatively, if you are enrolled into Medicare Advantage Plan of other types, you may use Medicare Advantage Prescription Drug Plan (MA-PD) with Prescription Drug Plan as a part of Medicare Advantage.

ELIGIBILITY

• You are eligible for Medicare Prescription Drug Plan if you are enrolled in Medicare Part A and/or Part B.

BENEFITS

• Covers most types of prescription drugs (both generic and brand-names) with few exceptions.
• Part D adds drug coverage to Original Medicare, HMO and PPO Plans, some Medicare Cost Plans, some Medicare Private Fee-for-Service (PFFS) Plans, and Medicare Medical Savings Account (MSA) Plans.
• Unlike the Original Medicare, the Part D coverage is not standardized.  All plans must provide at least a standard level of coverage set by Medicare, but each plan can vary in cost and drugs covered.  Plans decide which drugs they cover, at what level (tier), and whether not to cover some of them at all.

PREMIUM /  DEDUCTIBLE / CO-PAYMENT/ COINSURANCE

• Each plan can vary in cost and drugs covered.  The cost include: monthly premium, yearly deductible and copayment / coinsurance.
• Most Medicare Drug plans have a coverage gap (sometimes called a ‘donut hole’). It means that after you and your plan spent a certain amount of money, you need to pay out-of-pocket for all drug costs up to the specified limit. Above this limit there is a catastrophic coverage when you need to pay only a small coinsurance/copayment for the rest of the calendar year.

ENROLLMENT

You can join, switch, or drop Medicare Prescription Drug Plan (PDP):

• At Initial Enrollment Period – a 7-month period that begins 3 months before you turn 65, or 3 months before your 25th month of disability. The period includes the 3 months before, the month of, and the 3 months after the triggering event, such as ‘turning 65’.
• At Annual Enrollment Period  –  between October 15 and December 7. Your coverage will begin on January 1 of the following year.
• In certain situations you may be eligible for a Special Election Period (SEP)  that allows you to make changes in your coverage outside of enrollment periods described above. Examples of SEP are: you’ve moved out of service area, you are enrolled into PACE plan, you’ve lost creditable prescription coverage, you have both Medicare and Medicaid, etc.  SEP length is dependent on event that triggered it.  For example, people who qualify for Extra Help have continuous SEP – they can change plans once a month.
• When switching PDP, you don’t need to cancel the old plan. It will end automatically when the new plan begins.
• Normally enrollment is on calendar year basis, starting the date your coverage begins.
• If you didn’t enroll in Prescription Drug Plan when you were first eligible and you go without Creditable Prescription Drug Coverage for 63 continuous days or more, you may have to pay a penalty if you’ll decide to join later.  (Creditable Prescription Drug Coverage is prescription drug coverage that is at least ‘as good’ as standard Medicare Prescription Drug Coverage).  The penalty is 1% for each month you could have been enrolled but were not (assuming you didn’t have the creditable coverage).
• Each PDP plan is required to provide to its members the Annual Notice of Change every year. Changes may include changes in drug tier structure as well as cost sharing.

PDP STAGES

There are four stages in PDP.  Coverage vary significantly from various carriers  For example, there are several plans that do not have an up-front deductible.  For an in-depth analysis from plan to plan, call (215) 658-1555.

1.  Yearly Deductible You pay the first $360 (year 2016) of drug costs before plan starts to pay.

2.  Initial Coverage (ICL) For each covered drug  you pay a copayment/coinsurance (defined by the plan), and the plan pays its share. CMS’ standard coinsurance is 25%, i.e. you are paying 25% of the drug costs, the insurance company pays the rest. The initial coverage continues until the total drug costs (total of what you’ve paid and what insurance company paid) reaches $3,310 (year 2016).

3.  Coverage Gap (donut hole) Once the total costs of prescriptions (paid by you and your plan) has reached $3,310 (year 2016), you’ll pay 45% of the plan’s cost for covered brand-name prescription drugs. You get these savings if you buy your prescriptions at a pharmacy or order them through the mail. The discount will come off of the price that your plans has set with the pharmacy for that specific drug. Although you’ll only pay 45% of the price for the brand-name drug in 2016, 95% of the price—what you pay plus the 50% manufacturer discount payment—will count as out-of-pocket costs which will help you get out of the coverage gap. What the drug plan pays toward the drug cost (5% of the price) and what the drug plan pays toward the dispensing fee (55% of the fee) aren’t counted toward your out-of-pocket spending.

4.  Catastrophic Coverage Once you’ve spent $4,850 out-of-pocket in 2016, you’re out of the coverage gap. Once you get out of the coverage gap (Medicare prescription drug coverage), you automatically get “catastrophic coverage.” It assures you only pay a small coinsurance amount orcopayment for covered drugs for the rest of the year.

Click the links to read a recent article that Allen Heffler wrote concerning  Parts A,B,C,D  MyMedicareAdvisor