Medicare Part D Plan Phase Review for 2018

Part D Phases for 2018

1.        The Deductible

Medicare has set the 2018 prescription drug deductible at $405.  This is the amount that you will pay; through your Part D plan, before drug coverage begins.  Some plans do not charge a deductible; or only charge the deductible on brand name prescriptions.  However, all plans are responsible for paying the $405 deductible to Medicare on your behalf.

2.       The Initial Coverage Limit

This is the phase that is governed by set copayment amounts based on the Formulary Tiers that your prescriptions are in.  This phase goes until the TOTAL drug costs paid by both the plan and the member reach $3750.

3.       The Coverage Gap (Donut Hole)

After a member’s total drug costs have reached $3750, the member will be responsible for 44% of generic drug costs and 35% of the brand name drug costs until the member’s total out of pocket has reached $5000.  The actual drug costs during this phase will be determined by the pricing contract that your Part D plan and the pharmacy have.

4.        Catastrophic Coverage

After the member’s yearly out-of-pocket costs reach $5000, copayments go to $3.35 for generic drugs and $8.35 for brand name drugs; or 5% of the cost of the prescription, whichever is greater.

Medigap Open Enrollment - Don't Let it Pass You By

Did you know that the first six months of your Medigap eligibility could be the most important?

 Definitions:

-Medigap, also referred to as Medicare Supplement Insurance, helps fill in the gaps that Medicare leaves behind.  Medicare generally pays 80% of Medicare approved medical services.  A Medicare Supplement helps to take care of the remaining 20%.  

-Medigap eligibility, or your Medigap Open Enrollment Period, is when you are able to purchase Medicare Supplement Insurance without going through medical underwriting.  It lasts for six months and begins on the first day of the month that you turn 65 AND are enrolled in Medicare Part B. 

Delayed Medicare Part B because you have employer coverage?

If you delayed enrollment in Medicare Part B, due to still being covered under your or your spouse’s employer plan, or if you had other credible coverage; then your Medigap Open Enrollment Period starts on the day your Medicare Part B benefits begin.  Your Medicare card will list the effective dates of your coverage.

During this open enrollment period, insurance companies cannot use medical underwriting.  This means they cannot:

1.      Refuse to sell you any Medigap plan it offers

2.      Charge you more for a Medigap policy than they charge someone with no health problems

3.      Make you wait for coverage to start (no pre-existing conditions wait time)

 Once this six-month open enrollment period expires, insurance companies can charge you more or decline coverage.

Why should you compare Medicare Supplement quotes from different insurance companies?

1.       Medicare plans are standardized by the government, and all offer the exact same benefits.  THE ONLY DIFFERENCES ARE PRICE AND CARRIER NAME.

2.      Insurance premiums can VARY GREATLY between carriers.  In our Indiana market, there is up to a $35 difference in the monthly premium you pay to one carrier over another for Medicare Plan F…that’s $420 more in premium per year for the exact same benefits!

3.      It’s easy!  Many local, independent insurance agents are licensed to sell with every insurer who offers Medicare Supplements in your area.  They can do the price shopping for you so that you don’t have to call each carrier separately.

Independent agents also have the ability to present you with information on history of premium increases, strength/rating of the different insurance carriers, and personal experience they’ve had with different insurance companies. 

If you don’t have a Medicare Insurance Agent, consider giving Mitch Upchurch a try. 

Quotes can be requested online at www.mitchupchurch.com or by calling 765-287-9380/800-630-8853.  Put Mitch’s 20 years of Medicare experience to work FOR YOU!

Medicare Advantage...and the dis-Advantages

What is Medicare Advantage?

Medicare advantage plans are an alternative to traditional Medicare.  The federal government pays private health insurance companies to offer insurance plans that have benefits that are at least as good as the payment models offered under traditional Medicare. 

The ‘advantages’ part of these plans may include value-added services that are not included under traditional Medicare, such as: preventive dental and vision, fitness/gym reimbursements, discounts on over-the-counter items and 24-hour nurse lines. 

Medicare Advantage is a managed care plan that charges low monthly premiums in exchange for relatively strict local networks, prior authorizations/referrals requirements and copayments that come out of your pocket whenever a medical service is utilized. (You must still pay your monthly Medicare Part B premium.)  Many of these plans do include prescription drug coverage.

Another advantage of a Medicare Advantage plan over traditional Medicare…the protection provided by an annual out-of-pocket maximum. (The current national average is $5400/year*). Traditional Medicare does not have any annual out-of-pocket limits.

According to the Kaiser Foundation, in 2015, 17.6 million or roughly 31% of all Medicare beneficiaries are now in Medicare Advantage plans.*

Which is a Better Deal – Medicare Supplement or Advantage?

A cheap premium should not be the only factor considered when deciding on your health coverage.  Whether Medicare Advantage is a better deal than original Medicare + a Medicare Supplement/Part D Plan depends on a host of individual factors, such as your comfort level with managed care and your willingness to trade lower up-front premiums while you are healthy for the risk of higher out-of-pocket costs if you get seriously ill. 

Mary Ashkar, Staff Attorney for the Center for Medicare Advocacy, stated that, "The best candidate for Medicare Advantage is someone who's healthy.  We see trouble when someone gets sick."  ** 

Education has become the best protection I can provide my Medicare Advantage clients. The biggest issue my office faces with these plans has to do with skilled nursing facilities/nursing homes.

Medicare Advantage plans are designed to help curb unnecessary medical spending and even fraud through more extensive oversight and review than original Medicare. Unfortunately, this creates a system of checks, balances, and paperwork that many hospital and nursing home administrators are not fond of.

Here are some recent scenarios involving our clients and local nursing facility admittances:

1.   Initial authorizations to be admitted into a nursing home are sometimes denied.  Normally, the denial can be resolved by one phone call from the physician who has referred you for skilled care.  If you get a denial, make sure the referring physician/hospital is doing the leg work needed to get it fixed for you.

2.   The nursing home recommended that the Medicare Advantage member drop their plan and go back on traditional Medicare and buy a supplement.  This is NOT sound advice for many reasons!  While the paperwork is easier for the nursing home under traditional Medicare; our clients usually find that their out of pocket expenses are much higher on Medicare alone.  Remember, Medicare Supplements are medically underwritten.  By the time you are sick enough to need skilled care at a nursing facility; you are probably too sick to qualify for a Medicare Supplement.  This lack of knowledge by nursing home staff has cost my trusting clients thousands of dollars.

 3.   Networks also apply to skilled nursing centers, and many times the nursing home that is closest to your home may not be the one that is in-network with your plan.  The additional mileage does cause added stress to caretakers who drive multiple times a day to see their loved ones.  If you want to be free to select a nursing home, there are short-term nursing home plans that can be purchased to ensure you can go where you want to go.

 4.   Just remember, the best scenario for any nursing home is someone who is ‘self-pay.’  This means that 100% of the expenses are being billed to you directly.  Before ever agreeing to this arrangement, please call my office to be sure that your Medicare Advantage plan and skilled nursing facility has coordinated your care and benefits in a manner that is of the highest benefit to YOU.

Overall, the feedback from our Medicare Advantage clients is that they are satisfied with their plan.  However, waiting until an unexpected hospitalization, rehabilitation, or cancer diagnosis to fully understand the potential costs involved with these plans does not usually make for a good outcome. 

An option that could fill the gaps in Medicare Advantage coverage is through reasonably priced insurance policies for short-term nursing home stays and hospitalization.  Upchurch Insurance Services can provide a quote to you if you are interested in exploring whether this option could save you a lot of worry and money in the future.

The Medicare Annual Enrollment Period is from October 15th through December 7th.  It is during this time that Medicare Advantage plan members will have the opportunity to thoroughly review their plan’s annual notice of changes (benefit and cost changes); as well as move to a new plan or back to original Medicare.

Cited Sources:

*http://kff.org/medicare/fact-sheet/medicare-advantage/   

**http://www.foxbusiness.com/features/2011/08/31/six-questions-about-medicare-advantage-plans.html

'If It's Too Good To Be True'...Tips to Help Avoid Being Scammed!

After spending over 20 years developing relationships with folks on Medicare; I’ve seen my share of fraud and abuse.  Unfortunately, the senior population seems to be of particular focus for scammers looking to steal money – and this trend continues at an alarming rate.

According to a recent report by the National Council on Aging, the top financial scams targeting seniors include:

1.   Phone calls from criminals posing as employees of Social Security, Medicare or the Federal government asking for personal information such as social security numbers, dates of birth, maiden names, and even credit card or banking account numbers. 

2.   Phony phone calls, emails and letters from the IRS threatening stiff penalties and jail time if money is not sent to them immediately.

3.   Counterfeit prescription drug schemes, anti-aging treatments and supplements, usually advertised through the mail, online or on TV, providing fake remedies that can be ineffective, expensive and unsafe.

4.   Funeral and cemetery scams and robberies, where thieves use obituaries to know when funeral services are being held so that they can rob your home.  

5.   Internet/Computer viruses, posing as pop-up advertisements, can steal your personal information, passwords and even payment information.

6.   Sweepstakes and lottery scams, whereby criminals ask that you send them money in order to claim your prize.  The scammers usually ask that you use MoneyGram or Western Union to mail a processing fee.

7.   Reverse mortgage scams that have led to seniors actually losing their homes.

8.   Grandchild schemes, where criminals will call posing as an out-of-town grandchild, asking their grandparent to send them money in the mail.

9. Investment schemes, where phony investment brokers sell illegitimate financial products or real estate, and then run with your money.

10.  Door-to-door schemes, where high-pressured sales people will offer to do lawn work, tree work, roof work, etc.  These criminals will often ask you to pay for their services up front, and schedule you for a later date.  When they do business this way, there’s a good chance that they’ll take your money and run.

Quick Rules for Being Safe Rather Than Sorry

1.    NEVER give out any of your personal information over the phone to ANYONE.  It doesn’t matter who they claim to be; JUST DON’T DO IT!

2.   If it sounds too good to be true….it probably is. 

3.   If someone you don’t know comes knocking on your door; you do not have to answer it.  Unfortunately, there are a lot of recent reports of criminals who knock on your door in broad daylight, and enter your home at your invitation.

4.   Never pay anyone for services that have not been rendered.

5.   Change your computer passwords often and keep them in a safe location.

6.    When in doubt – call Upchurch Insurance Services or a family member to let them know if you get a suspicious call, mail or email.  There is nothing embarrassing about not knowing whether something is legitimate or not.  Scammers often prey on people who are exceedingly trusting. 

Drug Manufacturer Coupons and Medicare

Know Before You Go

Advertising for prescription drugs has skyrocketed in recent years, promoting new brand-name drugs that treat almost every ailment known to man.  It's no secret that the pharmaceutical industry is BIG business, and drug companies spend big money to get new medications out to the masses in several different ways - one method is through the media and another method is through coupons and rebates.

To entice consumers to purchase or switch to a particular medication, drug manufacturers will often offer coupons.  However, many people don't realize that offering these coupons to consumers who are on federal drug programs such as Medicare or Medicaid is actually illegal.

The federal law; "The Anti-Kickback Statute" makes it a 'criminal offense to knowingly and willfully offer, pay, solicit or receive any remuneration to induce or reward the referral or generation of business reimbursable by any Federal health care program." 

In other words, using a coupon to purchase a prescription drug in conjunction with a Medicare Part D Plan is not allowed.  There are safeguards in place, as most of the coupons do state (in very small print) that they are not to be used by Federal program beneficiaries, and many knowledgeable pharmacy employees will not allow you to use them if you are also using your Part D plan.

A protection provided by the anti-kickback statute is that it might derail physicians from prescribing and Medicare beneficiaries from choosing brand-name drugs over lower priced generic drugs just because there is a coupon available.  However, Medicare members often feel like they are punished for having a Part D Plan when they are unable to take a generic medication.

Options Available when Your Copayments Cost too Much

There are a few options available to those who are on brand-name drugs and are being charged high copayments.

1.  Patient Assistance Programs (PAPs) - These are programs created by the pharmaceutical companies to provide free or discounted medicines to people who cannot afford them.  Each program has its own qualifying criteria.  To find out if a medicine that you are on has a PAP; call your Medicare Insurance agent (Upchurch Insurance Services), doctor's office or pharmacist to see if they can assist you.

2.  Generic drugs come on the market daily!  Be sure to check with your doctor OFTEN to see if any of your medications have a lower-cost alternative available. 

3.  Extra Help for Prescription Drugs is a program provided through the Social Security Administration for those who meet certain income and resource requirements.  Applications can be completed online at ssa.gov, by phone (800-772-1213), or in person at your local Social Security office.

4.  Do not use your Medicare Part D Plan for medications that can be purchased much cheaper through the use of coupons, rebates or pharmacy discount plans.  Although, an important note to make:  Any medication purchased without your Medicare Part D Plan will not count towards your deductible, coverage gap or catastrophic gap coverage.

Going on Medicare? Call an Independent Agent.

The Medicare insurance sales industry has changed greatly over the last few years, trying to adapt to the 10,000+ people A DAY going on Medicare who are more tech-savvy than any previous group in history.  Boomers are quite comfortable interacting over the internet.  You can buy almost anything online, including Medicare Plans.  But, should you?

I personally believe that having an independent agent that you can rely on locally is the best way to purchase a Medicare plan.  Medicare is complicated.  Mailboxes and the internet are jam packed with a lot of contradictory information.  And, while I have several clients who did most of their initial research online; they eventually wanted to sit down, face to face, to make their final buying decisions.

 Benefits of using an Independent Insurance Agent:

1.    Independence - Independent insurance agents usually have contracts with a majority of the insurance companies in your area.  This means they can do the shopping for you, saving you from making multiple calls to all of the insurance companies out there.

 2.   Choice - Because of their relationships with multiple insurance companies; an independent agent's loyalty lies with YOU.  This means they can offer you every company, plan and price available.

 3.   Local - Independent insurance agents are usually local, small business owners.  Your support means keeping jobs in or close to your community. 

 4.   Free – Insurance agent’s commissions are paid directly by the insurance companies – so you never pay for their services or pay more for Medicare products purchased through them.

 5.   Resource - Local independent agents are excellent resources for information about local providers, caregivers and community help available to Medicare beneficiaries.

 6.   Longevity – Many independent agents have been at it a while.  This means you have a real relationship with someone who is going to be with you and your family over the long haul. 

 7.   Service -  Received a bill from a doctor that you don’t think is right?  Your prescription is no longer covered under the new formulary?  You received a premium increase?  Would you rather call (and wait on hold) the same 800 number used by millions of other Medicare beneficiaries or call your personal insurance agent for help?

With an independent insurance agent, you aren’t losing anything if you prefer to communicate through email or online.  Many agents have happily embraced the technology now available in the Medicare insurance space and have their own websites, emails and Facebook pages where they can interact with their clients.  But, it can also be nice to have the option of sitting down at your kitchen table to talk about some of the issues that arise as we age with an experienced, knowledgeable agent who wants to be in the trenches (or the kitchen) with you.

Shop independent at www.mitchupchurch.com.   

Final Expense Options - Preparing for the Worst is a Lasting Gift

As folks begin contemplating paying for their own final expenses, I often get asked about the difference between a final expense life insurance plan purchased through an insurance company and a pre-need plan purchased through a funeral home.

Which option you choose depends on a few important personal factors and preferences.

A pre-need plan is purchased from a funeral home.  One great benefit of this type of plan is that you can pay in one lump sum or in installments; and ‘lock in’ your burial/funeral expenses. You get to fully plan the way in which you will be remembered and laid to rest – relieving your grief stricken loved ones of that responsibility.

Also, for those needing to spend-down their assets in order to qualify for Medicaid, a pre-need contract placed in an irrevocable trust is an asset that cannot be taken away nor counted when qualifying for Medicaid benefits. 

Finally, sometimes, your health is too poor or you are past the age to qualify for a traditional whole life policy.  In this instance, when you want to be sure that all of your arrangements get taken care of, a pre-need contract is a great option. 

An Alternative - Final Expense Plans

An alternative solution is a whole life policy, often marketed by insurance companies as Final Expense plans.  With this option, you can still pre-arrange with a funeral home without prepaying in order to determine your estimated costs.  Just remember, pre-arranging will not allow you to lock in your price.

A final expense plan is an insurance policy that gets paid directly to your beneficiary(ies) instead of directly to the funeral home (However, you can designate the funeral home as one of your beneficiaries.).  You can increase your death benefit to cover things other than funeral services and burial or cremation; such as outstanding medical expenses or even credit card bills.  Of course, you’ll want to be sure you designate a trusted family member or friend who will use the money properly for your funeral and other final expenses.

These plans allow you to be in control of your policy and flexible as life situations change.  If you want to cancel your policy, change your beneficiary or borrow from the cash value; you are able to do that with a final expense life insurance policy.  However, to be cost effective, these plans are most often medically underwritten and are not offered past the age of 85.

Whichever option you choose; preparing for your final expenses is a wonderful gift to provide your loved ones.  Oftentimes, they may not know your wishes, and making quick decisions during the death of a family member or close friend can be difficult and overwhelming.  Either one of these plans brings about comfort and peace to those you love.

Upchurch Insurance Services works with several companies offering final expense life insurance and can also make referrals to reputable funeral home directors in Indiana for pre-need plans.

Turning 65 and Enrolling in Medicare?

Medicare Initial Enrollment Period

Getting ready to turn 65; and wondering about how and when to sign up for Medicare?  With over 11,000 Baby Boomers a day turning 65, I get asked this question quite often.

There are several different enrollment periods for people going on Medicare.  However, we will explain the most common enrollment period for those turning 65.  It is called the ‘initial enrollment period.’  Your initial enrollment period (IEP) is the first time you can sign up for Medicare, and you can enroll in Medicare Parts A, B, C and D during this time.

The initial enrollment period lasts for seven months.  The three months before your 65th birthday, the month of your 65th birthday and the three months following your 65th birthday.

Regardless of when you enroll, your Medicare will not begin any sooner than your birthday month.

For example; if your 65th birthday is September 19, 2016, here is the unique initial enrollment period for you:

• June, July and August, you may enroll in Medicare – your start day will be September 1, 2016
• September enrollment – your Medicare start date will be October 1, 2016
• October enrollment – your start date will be December 1, 2016
• November enrollment – your start date will be February 1, 2017
• December enrollment – your start date will be March 1, 2017

The one caveat to this rule is if your birthday falls on the first day of the month.  If your birthday falls on the first; you are actually eligible for Medicare benefits on the month before your birthday.  For instance, if you were born on September 1 in the example above your IEP would begin in May of 2016 with a Medicare effective date of August 1, 2016.

How do you enroll?

If you elect to begin receiving your Social Security benefits or Railroad Retirement Board benefits when you turn 65, you will automatically be enrolled in Medicare Parts A and B and will receive your red, white and blue Medicare card in the mail approximately three months before your 65th birthday.

Or, if you have been receiving Social Security disability, your Medicare benefits will begin on your 25th month of disability.

If you have elected to not immediately draw your Social Security benefits upon turning 65 due to continuing employment, then your Medicare enrollment will not happen automatically.  You will have to visit your local social security office or you can enroll online at www.ssa.gov. 

However, if you do not have medical and prescription drug coverage that is at least as good as Medicare, you may pay a penalty for not enrolling in Medicare when you first become eligible.  If you do have credible coverage from an employer or other source, it is important to keep proof of this coverage to also avoid the Part B and/or Part D late enrollment penalties.

Medicare Part D & January Sticker Shock

Our office phone rings…A LOT…during the month of January with folks who are in what I call pharmacy-induced sticker shock.  The general idea of the calls is the same: “I only paid $44 for my prescriptions in December, and the pharmacy said my total for January is $360.  The pharmacy said it’s because of my new insurance plan!”

Well, not exactly.

Medicare began covering outpatient prescription drugs on January 1, 2006.  Medicare administers this prescription drug benefit through private insurance plans (Part D); however, those insurance companies have to follow the rules prescribed by Medicare.  The rules that seem to have the greatest impact on our clients this year include:

1.        The drug companies must follow Medicare’s prescription drug formulary.

2.       The Medicare Part D annual drug deductible for 2016 is $360.

3.       The insurance plans can/do make changes in premiums, copayments, and coinsurance every single year.

Medicare, not the insurance companies, makes decisions about the drugs that are covered.  Medicare can deem certain drugs to be not covered, or to be covered with restrictions due to things like:

·         A much cheaper generic alternative is available.

·         The drug creates a high risk of danger in the Medicare population (danger of dependency, falls, accidents, etc).

·         Research has shown the drug to be experimental in nature or not an effective treatment.

·         The drug is prescribed for non-medically necessary reasons (often cosmetic).

Medicare also establishes the annual drug deductible ($360 in 2016; up from $320 in 2015).  This is what leads to “sticker shock’ at the pharmacy in January.   Unless your plan does not charge the deductible, the first $360 of drug costs is paid by the consumer.  Once the deductible is met, the plan begins paying a portion of the costs.

However, whether the insurance plan charges the deductible or not is a little misleading, too. 

Consumers should not look at premium and deductible when selecting a Part D plan; but instead, look at the estimated, total, annual costs.  We are finding that the plans who don’t charge the $360 deductible will often have higher monthly premiums or higher copayments for the drugs.  They are recouping that deductible; as it is paid to Medicare by the plan on your behalf.

Another trend:  Prescription drug prices are on the rise.  I’ve yet to hear anyone tell me that they are paying less for their prescriptions.  My best advice:  Find an insurance agent who will review your prescription costs with all of the available Part D plans each open enrollment (or use the Medicare Prescription Drug Plan Finder at Medicare.org), and work with your doctor and your Part D plan’s formulary to make sure that you are on the lowest cost alternatives for your condition(s).

HSAs and Medicare

Special rules apply to people who contribute to tax-favored health savings accounts (HSAs) as they near age 65 and become eligible for Medicare.

A health savings account is an account that can only be used in conjunction with a health insurance plan that meets specific criteria, like a minimum deductible (at least $1,300 for an individual for 2016).  It is used for medical costs that are not paid by the insurance plan, such as deductibles and copayments. 

The money in an HSA account grows tax-free and it may be withdrawn tax-free, as long as it is spent on eligible medical expenses.  Any balance in an HSA carries over year to year, and the account follows you if you leave your job.

Under current rules, once you enroll in Medicare you can no longer make new contributions to an HSA.

However, the HSA funds can be used to pay for Medicare Parts A, B and D premiums, deductibles and copayments; Medicare Advantage (Part C) premiums, copayments and coinsurance; dental and vision services; and even a portion of long term care insurance premiums. You can’t, however, use the funds for premiums for Medicare Supplement policies.

If your Medicare Part B and D premium is automatically deducted from your Social Security check, you simply reimburse yourself directly from your HSA for the Medicare premiums paid from your Social Security.

Once a person turns 65, their HSAs are no longer subject to the 20% non-eligible expense penalty.  However, any withdrawal made for non-eligible medical expenses will be subject to ordinary income tax.

Medicare Terminology: What is the Medicare Approved Amount?

The Medicare-approved amount is a rate that has been negotiated between Medicare and doctors and hospitals for each medical service.  The Medicare approved amount is usually much less than the amount a provider normally charges for their medical services.  

MOST doctors who treat Medicare patients have signed a contract with Medicare; and agree to the reimbursement rates that Medicare deems appropriate for each covered medical service.  The terminology used is the doctor ‘accepts Medicare assignment’.   They are called Medicare Participating Providers.

A Medicare beneficiary who has traditional Medicare and no supplemental insurance will normally be billed for 20% of the Medicare Part B approved amount.

An example:  You go to your doctor for a cold.  The doctor’s office visit fee is normally $100 for people who do not have Medicare.  However, Medicare has negotiated a rate for Medicare beneficiaries for $50.  Medicare will send your doctor 80% of this fee ($40), leaving you with 20%, or $10.  Ten dollars is the amount that the doctor can bill you.

If you have a Medicare supplement, Medicare will send the remaining portion of the bill ($10 in the example above) to the insurance company to process and pay based on the type of plan you have.

There are some doctors though who do not accept Medicare assignment.  If the doctor does not accept assignment, it doesn't mean that they won't treat you, it just means that they are allowed to charge you up to 15% more than what Medicare approves for that service. 

Sometimes, providers will send invoices that show the normal amount that they charge non-Medicare beneficiaries, and use the term ‘write off’ to adjust for the amount that Medicare will approve for that service.  Medicare beneficiaries get confused with this terminology, but it is just a way to show the rate that has been negotiated for ALL people on Medicare. 

It is becoming increasingly important for Medicare beneficiaries to read the statements they receive from Medicare and their supplemental insurance company.  These statements show the amount that was billed for every claim; and what your legal responsibility is according to Medicare rules.  Checking these statements before paying any provider is recommended in order to be sure you are not overpaying.

*The example above is for illustration purposes only; and does not represent current Medicare adjusted rates.

CMS Releases 2016 Medicare Parts A & B Premiums and Deductibles

Medicare Part B Premiums:

Medicare Part B Premium for those already enrolled in both Social Security and Medicare:  $104.90

Medicare Part B Premium for those NOT enrolled in Social Security but enrolled in Medicare:  $121.80

Medicare Part B Premium for newly eligible Medicare beneficiaries:  $121.80

Medicare Part B Deductible: 

                   2015:  $157                        2016:  $166

Medicare Part A Deductible & Coinsurance Amounts:

                                                                2015                 2016

Inpatient Hospital Deductible:                                  $1260                     $1288

Daily Hospital Co-Insurance (Days 61 – 90):             $315                       $322

Daily Hospital Co-Insurance          

(Days 91 – lifetime reserve):                                      $630                      $644

Daily Skilled Nursing Facility Co-Insurance

(Days 21-100):                                                          $157.50                  $161

Part D Deductible & Coverage Gap Limits:

                                                                                  2015                         2016

Maximum Deductible a Part D Drug

Plan May Charge:                                                              $320                          $360

Coverage Gap Begins

(Total Out-of-Pocket for you and Plan):                             $2960                       $3310

Coverage Gap Ends/Catastrophic

Coverage Begins:                                                               $4700                     $4850                                               

What is the Donut Hole?

Most Medicare Prescription Drug Plans have a coverage gap – also referred to as the (dreaded) "donut hole".  It is a stage of drug coverage where the Part D plans put a temporary limit on what they will cover for medications, based on total drug expenditures.

Not Everyone Goes Into the Gap

The coverage gap begins after you and your drug plan have spent a certain amount for covered drugs. Items that count are your yearly deductible, coinsurance and copayments.

In 2015, once you and your plan have spent $2,960 on covered drugs - you're in the coverage gap.

In 2016, once you and your plan have spent $3,310 on covered drugs, you're in the coverage gap.

This amount will change each year, as legislation passed with the Affordable Care Act will actually phase out the donut hole by the year 2020.

What Happens in the Gap?

The biggest thing you will see in the donut-hole phase of coverage is you will pay a lot more for your prescription drugs. 

You will pay:

• 45% of the cost of brand-name medications

• 58% of the cost of generic drugs

When Do I Get out of the Donut Hole?

You will be in this stage of coverage until you and your plan has paid total out-of- pocket costs of $4850.  Once this is met, you enter the last coverage phase – the Catastrophic Phase. 

Amounts paid for medications in the Catastrophic Phase are very minimal, and you continue in this stage for the rest of the year.

November is National Hospice and Palliative Care Month

November is National Hospice and Palliative Care Month, a good time to learn more about the care and support available to people who are terminally ill.

It’s never easy to face all of the difficult decisions that come with a terminal illness, like considering whether hospice is right for you. For some people, the thought of hospice can be scary, but it’s important to learn about your options.

Medicare covers hospice care at 100% so that those who are terminally ill can spend the last moments of their lives with dignity and comfort, among loved ones. Hospice focuses on comfort or “palliative care,” not curing an illness.

Deciding you need hospice care is a difficult choice to make, and it’s important to be informed about what hospice covers.

Here are a few of the services hospice provides:

·         Care is generally provided in the home.

·         A specially trained team of professionals and caregivers provide care for the “whole person,” including your physical, emotional, social, and spiritual needs.

·         Services typically include physical care, counseling, drugs, equipment, and supplies for the terminal illness and related conditions.

·         Family caregivers can get support.

·         Once you choose hospice care, your hospice benefit should cover everything you need.

To find additional resources and support, visit:

Hospice Foundation of America (HFA)

National Hospice and Palliative Care Organization (NHPCO)

Hospice Association of America (HAA).

Budget Deal Stops Drastic Medicare Premium Price Hike

Just last week, the Bipartisan Budget Act of 2015 was passed.  One of the many provisions of this bill has stopped what would have been a devastating increase in the Medicare Part B premium (physician services), which is currently $104.90 per month.

The good news:  There will be no new Medicare premium spike in 2016 for the roughly 36 million people who are currently receiving a monthly Social Security check.

The bad news:  There will be no cost of living raise for those receiving Social Security, as the economy indexes used to figure inflation actually declined over the last year.  This leaves Social Security recipients without a raise for 2016.

If You Receive A Monthly Social Security Check Now:

You are protected by a hold harmless provision which ensures that your monthly Social Security check will not be reduced when there is an increase in Medicare Part B premiums IF an increase in premium would DECREASE your monthly check amount. 

For 2016, as there is no raise in your Social Security check; your Medicare Part B premium will remain $104.90.

Who Will Pay More in 2016?

For the 16 million beneficiaries who are not protected by the hold harmless clause, the new Medicare Part B premium for 2016 will go from $104.90 to 120.70 per month.  Without last week’s budget deal, this amount was slated to increase to a whopping $159.30 – a 52% increase!

These beneficiaries include:  High income earners (who are paying even more than the current stated premium; as their contribution is calculated according to their income bracket); new enrollees; Medicare beneficiaries who are also enrolled in Medicaid (as the state Medicaid programs pay their Part B premiums); those who are on Medicare but have not elected to take their Social Security payments yet; and those who never qualified for Social Security (Mostly civil servants.).

End Of the Story?

Not likely.  The increase in Medicare Part B premiums is based on the fact that healthcare spending is increasing rapidly; as are the numbers of folks aging into Medicare.  The Medicare Trust Fund is always running in crisis mode; as there have been no real, long-term solutions that would allow it to keep up with the spending. 

Industry experts are quick to point out that this is merely another short-term budget maneuver, and Medicare beneficiaries will continue to feel the symptoms of a Medicare program needing immediate and significant reform.

Many Medicare Beneficiaries Qualify for Extra Help Paying for Medications

People on Medicare May Qualify for Extra Help Paying For their Prescriptions

Making ends meet should not mean going without your medications. If you have limited income and resources, you may qualify for Extra Help to pay for some health care and prescription drug costs. Medicare’s “Extra Help” program helps people with limited income pay for their prescription medications. 

For people who qualify, drug costs in 2016 for most people will be no more than $2.95 for each generic and $7.40 for each brand-name covered drug.

The Centers for Medicare & Medicaid Services estimates that more than 2 million people with Medicare may be eligible for Extra Help, but aren’t currently enrolled to take advantage of these savings. A recent law changed how your income and assets are counted:  

• Life insurance policies don’t count as resources  

• Any help you get from relatives, friends, and others to pay for household expenses—like food, mortgage, rent, heating fuel or gas, electricity, water, and property taxes—doesn’t count as income  

Qualifications for Extra Help

Many people qualify and don’t know it. Even if you were previously turned down for Extra Help due to income or resource levels, you should reapply. If you qualify, you’ll get help paying for Medicare prescription drug coverage premiums, copayments, and deductibles.

To qualify, you must make less than $17,655 a year (or $23,895 for married couples). Even if your annual income is higher, you still may be able to get some extra help.  Your resources must also be limited to $13,640 (or $27,250 for married couples). Resources include bank accounts, stocks, and bonds, but not your house or car.  

There’s No Cost or Obligation to Apply

It’s easy and free to apply for “Extra Help.” You or a family member, trusted counselor, or caregiver can apply online at socialsecurity.gov/i1020 or apply by phone by calling Social Security at 1-800-772-1213. TTY users should call 1-800-325-0778. All the information you give is confidential.

Not Your Father’s Medicare Insurance Agent?

"You ought to feel highly honored," said the businessman to the insurance agent, "so far today I have had my secretary turn away seven insurance agents."

"Yes, I know," replied the agent, "I'm them.”  

Today’s insurance agents live in a time where there isn’t a lot of validity nor respect for the role they play in the lives’ of their clients.  Unfortunately, there have been a few bad apples that have preyed upon the trusting nature of folks, and have sold them bad products that cost a lot and didn’t provide any real benefit.  So, I get why it’s easy to hear the term ‘insurance agent’ and immediately picture a dishonest, door to door guy in a cheap suit with an even cheaper smile.

Unfortunately, with the technology of today, it’s becoming even easier to dismiss the value an insurance agent can bring to the table, because we can ‘order’ any insurance product we want right from a laptop while sitting in a Starbucks.

However, what if I told you that a life and health agent, especially one that deals with Medicare beneficiaries, can be as valuable to your overall health and financial well being as your family doctor, attorney and financial planner?  

Indiana life and health insurance agents go through quite a lot in order to become and remain an agent.  First, we must pass a state examination that tests our knowledge of the products we wish to sell, the duties and responsibilities we must uphold; and we must also possess a thorough knowledge of the Indiana insurance laws and administrative rules.  Every two years, an insurance agent’s license can only be renewed if we have completed 24 hours of continuing education.

As an added protection to the senior population, The Centers for Medicare & Medicaid Services has put guidelines in place to control when & how Medicare Advantage and Prescription Drug plans are sold – including annual training and testing with every company we are contracted with to be sure we understand the products, marketing practices, and privacy rules that govern these products.  Agents must comply with these guidelines or face serious consequences, including a loss of their license.  

I mention all of the commitment, long hours and hard work it takes to remain in this industry, because even though there might be a few bad apples out there selling insurance; there are also a lot of great agents out there too. . .the kind of agents that are active members in your community, the kind that don’t just ‘sell’ insurance policies to strangers; but actually help people make decisions about their health care coverage, educate them about more affordable generic prescription drugs, be sure they have life insurance in place for loved ones, coverage for stays in nursing homes and sources of guaranteed lifetime income.  

Good insurance agents, like the ones your father used to know, we care about our clients in the same way they did in the good old days . . we become like members of the family.  

What is Medicare Advantage?

What is a Medicare Advantage Plan?

Medicare Advantage Plans, sometimes called "Part C" or "MA or MAPD Plans," are a type of Medicare health plan offered by private insurance companies approved by Medicare.  Medicare pays a fixed amount each month to the insurance companies who are administering these plans.  Medical claims for Part A and Part B services are submitted to the Plan for payment, rather than directly to Medicare.

Medicare Advantage Plans cover all services that Medicare covers, and may also offer extra coverages.  Many Medicare Advantage Plans also cover prescription drugs, so you do not require a separate Part D plan.  In fact, enrolling in a separate prescription drug plan will normally cause an automatic disenrollment from your Medicare Advantage Plan.

Some Medicare Advantage Plans also offer routine dental, vision and hearing services; as well as 24-hour nurse hotlines, fitness memberships and chronic conditions care management services.

Unlike original Medicare and traditional Medicare supplements, Medicare Advantage Plans have networks; such as preferred provider organizations, Private Fee for Service and Health Maintenance Organizations (PPOs, PFFS, and HMOs). It is important to know what type of plan you are enrolling in as seeing a doctor outside of the Plan’s network could result in higher out of pocket expenses, and sometimes will result in no coverage at all.

Medicare Advantage Plans may also have different rules for how you get services, like whether you need a referral to see a specialist or need a prior authorization for certain prescription drugs.

Costs Associated with a Medicare Advantage Plan

Under original Medicare, you pay a Part B premium, which is usually automatically deducted from your social security check – for 2015 it was $104.90.  In order to sign up for a Medicare Advantage Plan, you must be enrolled in Part A and B of Medicare; and will still pay this Part B premium.

Also under original Medicare, Medicare usually covers 80% and you pay the remaining 20%.  What often makes a Medicare Advantage Plan attractive is the annual out-of-pocket maximum limit.  This is an important protection for Medicare beneficiaries.

Medicare Advantage Plans charge a monthly premium, which varies by what area you reside in.  These premiums are often lower than what you would pay for a traditional Medicare Supplement; however, in exchange for a lower premium, you will be asked to pay copayments, coinsurance and deductibles for each medical service you receive.

Who Can Enroll in A Medicare Advantage Plan?

·         Anyone 65 years of age or older

·         Anyone who is under the age of 65 and on Medicare disability

·         You must have Parts A and B of Medicare

·         You must live in the Plan’s service area

·         You cannot have End Stage Renal Disease (ESRD)

When Can I Enroll?

·         During the Initial Coverage Election Period(ICEP) – The seven month period when you are first eligible for Medicare (Three months before, the month of and three months after)

·         During the Annual Election Period (AEP) – October 15 – December 7 each year

·         During a Special Election Period (SEP) – There are certain circumstances that will allow enrollment into a Medicare Advantage Plan outside of the first two enrollment periods, a few examples are:  Moving into a new service area, going in or out of a nursing home, receiving or losing extra help, or involuntarily losing employer coverage

A Medicare Advantage Plan is one option that a Medicare beneficiary has.  It is important to understand how these plans work before making the decision to enroll.  An experienced Medicare Insurance agent should be able to explain the differences between traditional Medicare, Medicare Supplements and Medicare Advantage Plans so that you can make the right decision for you.

Just what is Medicare's Annual Election Period (AEP)?

When is the Medicare Open Enrollment Period (also known as ‘The Annual Election Period’ or AEP)?

The Medicare AEP is October 15 - December 7, 2016.  Plan changes during this time period will not take effect until January 1, 2017.

What is the Medicare Open Enrollment Period?

Medicare Advantage (Part C) and Prescription drug plans (Part D) make changes each year—things like cost, coverage, and what providers and pharmacies are in their networks. October 15 to December 7 is when all people with Medicare can change their Medicare health plans and prescription drug coverage for the following year to better meet their needs.

What can I do during AEP?

• Switch from Original Medicare to a Medicare Advantage plan.
• Switch from a Medicare Advantage plan back to Original Medicare.
• Switch from a Medicare Advantage plan to different Medicare Advantage plan.
• Switch from a Medicare Advantage plan that doesn’t include drug coverage to one that does, and vice versa.
• Join a Medicare prescription drug plan.
• Switch from one Medicare prescription drug plan to another one.
• Drop your Medicare prescription drug coverage.

How do people know if they need to change plans?

People in a Medicare Advantage or prescription drug plan should always review the materials their plans send them, like the “Evidence of Coverage” (EOC) and “Annual Notice of Change” (ANOC). If their plans are changing, they should make sure their plans will still meet their needs for the following year. If they’re satisfied that their current plans will meet their needs for next year and it’s still being offered, they don’t need to do anything.

 Where to go for Help?

https://www.medicare.gov/find-a-plan/questions/home.aspx

Or, talk to an experienced Medicare Insurance agent in your area.

Medicare Loophole: Observation vs Inpatient Status at the Hospital

Your hospital status—whether you're an inpatient or an outpatient—affects how much you pay for hospital services, and may also affect whether Medicare will cover care you get in a skilled nursing facility following a hospital stay.

You're an inpatient starting when you're formally admitted to the hospital with a doctor's order. The day before you're discharged is your last inpatient day.

You're an outpatient if you're getting emergency room services, observation services, outpatient surgery, lab tests, or X-rays, or any other hospital services, and the doctor hasn't written an order to admit you to a hospital as an inpatient. In these cases, you're an outpatient even if you spend the night in the hospital.

 The Two-Midnight Rule

CMS adopted the Two-Midnight rule for admissions beginning on or after October 1, 2013.  

In general, the Two-Midnight rule stated that:

Inpatient admissions will generally be payable under Part A if the admitting practitioner expected the patient to require a hospital stay that crossed two midnights and the medical record supports that reasonable expectation.

 Observation Status

Observation services are hospital outpatient services you get while your doctor decides whether to admit you as an inpatient or discharge you; and could span several overnight stays in the hospital. This is often a complex medical decision based on your doctor’s judgment and your need for medically necessary hospital care that is expected to last at least 2 or more midnights.

Why it Matters

Under Part A of Medicare, all services related to an inpatient hospital stay are completely covered under the Medicare Part A deductible. ($1260 in 2015)

If a patient is in need of post-acute care, like at a nursing home, Part A will also cover the first 20 days at a $0 cost share – following a 3 day stay as an inpatient in a hospital (Click here to read more about Medicare’s coverage of nursing home stays in last week’s blog.)

Observation stays, covered under Part B, may include several different services; such as emergency room, labs, x-rays and tests.  Under Part B, a beneficiary will be responsible for 20% of the cost of EACH service. 

While no single outpatient service copay will be more than the $1260 inpatient hospital deductible, the total copayments for all services can easily add up to over that.  Also, adding to that bill, could be the non-coverage of any medication you are given under observation status.

Up until this past August, many people didn’t even know they were not an inpatient in the hospital until they began receiving bills for outpatient services several weeks later.

 A Recent Law in Transparency

In August of 2015, President Obama signed into law ‘the Notice of Observation Treatment and Implication for Care Eligibility Act’, requiring hospitals to provide written notification to Medicare beneficiaries within 24 hours after receiving observation care. The notification will detail the:

·         Denial of admission;

·         Potential financial implications; and

·         Reasons for denial of admission

 Medicare beneficiaries have an increasingly greater role in understanding and managing their own health care.  Be sure that when you or a loved one is taken the hospital that you understand what level of care you are receiving.  Not questioning the doctors about your admittance status can be a costly mistake.

Resources:

www.medicare.gov

www.cms.gov