Nursing Home Stays...Am I Covered?

One of the the biggest misconceptions that people on Medicare or who are close to going on Medicare have is in regards to Nursing Home coverage.

Medicare does not provide coverage for the majority of nursing home stays, and when they do, there are very specific rules for services they will cover.

Medicare should pay for skilled nursing facility (SNF) care if:

·         The patient was hospitalized (as an in-patient, not on observation status) for at least three days and was admitted to the SNF within 30 days of hospital discharge.

·         The beneficiary requires skilled nursing or skilled rehabilitation services, or both, on a daily basis.  Skilled nursing and skilled rehabilitation services are those which require the skills of technical or professional personnel such as nurses, physical therapists, and occupational therapists.  In order to be deemed skilled, the service must be so inherently complex that it can be safely and effectively performed only by, or under the supervision of, professional or technical personnel.

·         The skilled nursing facility is a Medicare certified facility.

Medicare’s coverage if those guidelines are met:  (2015 amounts)

·         Days 1-20:  $0 copayment

·         Days 21-100:  $157.50 per day copayment

·         Days 100+:  Patient is responsible for 100% of the costs

Medicare supplements (Medigap); will cover the patient’s deductibles and coinsurance costs up to day 100; so long as the above Medicare guidelines are met.

I get several calls a year from caregivers who tell me that their parent is unable to stay at home because of their ability to care for themselves in terms of eating, remembering to take medicines, toileting, and bathing; and want to know what their options are.  Unfortunately, this level of care is called ‘custodial,’ and nursing home stays for custodial care alone is not covered by Medicare.

There are plans designed to help pay for long term care in nursing homes; however, as with any insurance, you are paying for a service that you hope to not ever have to use, and these plans tend to be almost prohibitively expensive.

There are also plans available designed to help cover short term stays in a skilled nursing and assisted living facilities.  These medically underwritten plans have very few restrictions on what is covered; and cover nursing home stays that are usually for a year or less.  Recent research states that 80% of all nursing home stays are for less than one year!  These short-term plans are generally very affordable plans for the coverage received, and the potential benefits far outweigh the modest monthly premium costs.

I have seen entire life-savings wiped out in a one years’ stay at a nursing home.  My first advice to individuals and couples who are worried about protecting their wealth is to consult an elder care attorney who deals with this every day. 

My second piece of advice is to take a look into short-term care plans as an alternative to long term care insurance with a reputable Medicare insurance agent.  If you don’t have one of your own, I’m here to help.  

The Four Parts of Medicare

Hospital Insurance (Medicare Part A)

·         Helps cover and defray the costs of inpatient care in hospitals

·         Covers stays in skilled nursing facilities, hospice and home health care assistance

·         You usually don’t pay a monthly premium for Part A coverage if you or your spouse paid Medicare taxes for at least 10 years while working

·         You generally automatically receive Part A when you sign up for Social Security upon turning 65

Medical Insurance (Medicare Part B)

·         Offers coverage for an array of health care services including hospital outpatient care, doctor visits, labs, x-rays, ambulance and durable medical equipment

·         Covers many preventive services that will help you maintain your health and prevent the worsening of current conditions 

·         Has a monthly premium (2015:  $104.90); usually automatically deducted from your Social Security payment

·         Is not required; however, you may be assessed a late enrollment penalty if you do not sign up for Part B when you are first eligible and do not have credible coverage

Medicare Advantage (Medicare Part C) 

·         Allows individuals to go on plans offered through private insurance companies

·         Allows people to obtain the benefits and services covered under Parts A and B, as well as Medicare prescription drug coverage under most plans.

·         Some plans also include additional benefits for extra costs, such as gym membership, dental and vision coverage

Medicare Prescription Drug Coverage (Medicare Part D) 

·         Helps cover the costs of prescription drugs

·         Effectively lowers your prescription drug costs while protecting you from increasing future costs

·         Run by Medicare-approved private insurance companies

·         Is not required; however, you may be assessed a late enrollment penalty if you do not sign up when you are first eligible and do not have other credible coverage

Medicare Preventive Services - Avoiding the Pitfalls to Coverage

With the introduction of the Affordable Care Act in 2010; Medicare now covers a broad range of services to prevent, detect and manage disease so that complications can be avoided.  This shift to preventative healthcare is seen as a way to reduce the future expenditures for chronic disease and illness and further protect the Medicare trust fund.

There are over 20 preventive tests and services that Medicare covers that are excluded from any deductible, copayment or coinsurance.  That means $0 out of pocket for you when you utilize these services correctly. 

Over the past few years I have had a few clients who were unsuspectingly charged for services that they believed were covered under the preventive medicine guidelines. 

Here are a few of the ‘pitfalls’ that some of my clients have experienced when having these services performed:

·         If you have a Medicare Advantage Plan, you must use an in-network provider to perform these services.  Otherwise, you will have out of pocket expenses. 

 ·         You must know the risk factors and frequency that Medicare has established for these tests.  Some of the preventive services are only allowed for certain at-risk groups, and many tests are not covered for free on an annual basis.

 ·         Colonoscopy screenings can easily become outpatient surgeries without you ever knowing -which are subject to coinsurance and copayments.  If during your screening surgery, removing polyps becomes necessary, you could be responsible for copayments and coinsurance related to an outpatient surgery.

 ·         Annual Medicare ‘Wellness’ visits with your doctor ARE DIFFERENT than a routine annual physical.  Be certain that your doctor office is aware that you are specifically scheduling your annual Medicare Wellness visit.

 ·         Medicare beneficiaries are covered for one annual flu shot.  Those going to clinics or pharmacies are sometimes paying a flat fee to receive a flu shot outside of a doctor’s office.  Be sure that the off-site clinics participates in Medicare and will file the claim to your insurance for you.  If they don’t, you may want to look around for another site that makes things easier, and cheaper, for you.

 ·         Medicare now allows and pays for the new 2-D digital mammography, in conjunction with the traditional 3-D Mammogram; effective January 1, 2015.

 ·         Screening for glaucoma is available once every 12 months for at-risk groups.  However, unlike Medicare coverage for the screening and treatment of cataracts; surgery to treat glaucoma is not a Medicare covered service.  This means that Medicare will not cover the cost of glaucoma surgery at all. 

There is a lot on information online or in annual Medicare guides mailed to beneficiaries that list all of the preventive services that Medicare covers.  One online source I used is:  https://www.medicare.gov/Pubs/pdf/11100.pdf

Medicare recognizes the crucial role that health care providers play in providing and educating Medicare beneficiaries about potentially life-saving preventive services and screenings. While Medicare now pays for more preventive benefits, many Medicare beneficiaries do not fully realize that using preventive services and screenings can help them live longer, healthier lives. As an insurance agent in the Medicare healthcare industry, I like to be sure that my clients understand the importance of disease prevention, early detection, and lifestyle modifications that support a healthier life.

What is Medicare Part D?

Medicare Part D, also called the Medicare prescription drug benefit, is a United States federal-government program which subsidizes the costs of prescription drugs and prescription drug insurance premiums for Medicare beneficiaries. It was enacted as part of the Medicare Modernization Act of 2003 and went into effect on January 1, 2006.  Part D plans are administered through private insurance companies.

Late Enrollment Penalty

Medicare Part D is available to Medicare beneficiaries who do not have credible drug coverage (Most generally, VA or employer coverage.).  Beneficiaries who do not have credible prescription drug coverage must sign up when they become eligible in order to avoid a late enrollment penalty.  The late enrollment penalty is 1% of the average national premium, which in 2015 is $33.13, for every month there was no coverage. This premium is adjusted every year, is added to your monthly plan premium and is payable for the rest of your life. 

Here is an example of how this premium is calculated for someone who went one year without Part D coverage:

.12 (12% penalty – 1% for each month not covered) × $33.13 (2015 base beneficiary premium) = $3.97

$3.97 rounded to the nearest $0.10 = $4.00

$4.00 = monthly late enrollment penalty for 2015

Standard Part D Benefits, 2015:

Phase 1- Deductible:  $320

Phase 2 - Initial Coverage Phase:  The Enrollee pays 25% of drug costs and the plan pays 75%.

Phase 3 – Coverage Gap (Doughnut Hole):  The Gap is hit once the Enrollee and the Plan have made COMBINED payments of $2960.  Once this ceiling is met the Enrollee pays 45% for brand-name drugs and 65% of generic drugs; the Plan pays 5% and 35% respectively.

Phase 4 – Catastrophic Coverage:  This phase begins once the Enrollee and the Plan have paid a COMBINED $7062 in estimated total drug costs.  Once this ceiling is hit the Enrollee pays 5%, the Plan pays 15% and Medicare pays 80%.

These benefits ‘reset’ each January 1; and the benefits described above will also change each year. 

One of the provisions of the Affordable Care Act (Obamacare) will eliminate the coverage gap by the year 2020; meaning that every year between now and then, beneficiaries will pay less during the ‘doughnut hole’.  By the year 2020, Part D participants will pay 25% of both brand name and generic drug costs, as compared to the 45% of brand names and 65% of generic costs being paid in 2015.

 How to Transition into Part D and Save on Drug Costs

Prescription drug costs can be the highest monthly expense for many Medicare beneficiaries.  We talk to many seniors who are having to make real decisions about whether they should pay for their prescriptions or buy groceries or pay utility bills.  Some are foregoing filling their prescriptions all together due to costs, and jeopardizing their health. 

Here is a list of actions you can take to help keep drug costs to a minimum:

1.    Schedule an appointment with your doctor to review all of your prescription drugs.  Today, people are being prescribed drugs by more than one doctor.  Specialists and other health practitioners are often involved, and it is important that your regular family doctor is aware of every drug you are taking.  This review will allow your doctor to be sure you aren’t taking duplicate medications.

 2.   New generic drugs come to market almost every day!  Your doctor can determine whether there are generic drugs or lower cost brand name drugs that can replace some of the pricey brand name drugs. 

 3.   Utilize the plans’ Mail Order Pharmacies, which typically offer lower copayments and the convenience of delivering prescriptions right to the door.

 4.   Take advantage of the FREE preventive screenings each year.  Prevention is where our health care system is moving; and getting a hold of risk factors today will reduce future treatment costs. 

 5.   For Medicare beneficiaries who meet certain monthly income and resource qualifications, there is extra help available.  In 2015, you may qualify if you have up to $17,655 in yearly income ($23,895 for a married couple) and up to $13,640 in resources ($27,250 for a married couple).  This program provides significant savings; and if you meet the qualifications, it definitely makes sense to apply.  You may even apply online:  http://www.ssa.gov/medicare/prescriptionhelp/

The Future of Prescription Drug Costs

Unfortunately, recent news is that both brand name and generic drug prices are soaring out of control.

The effects of this, according to AARP, will result in higher copayments for Medicare beneficiaries causing many to not be able to fill their prescriptions (Experts believe that currently 25% of all prescriptions are not being filled due to high cost.).  Taxpayers also take the hit for rising drug costs, as government programs (Medicaid and Extra Help, as described above.) now foot the bill for half of all prescription drugs.

This makes it increasingly important for Medicare beneficiaries to continue the discussions with their health care providers about the prescriptions they are taking; as well as being sure to review their Part D plans each year during the annual open enrollment period, either with their insurance agent or through the Medicare Plan Finder.

5 Things You Should Know About Obamacare When You Are On Medicare

We get a lot of questions about how the Affordable Care Act affects our Medicare population; and we wanted to take a look at how Obamacare has changed the landscape since being enacted in 2010.

1.        Your Medicare coverage is protected.  You do not have to enroll in the Health Insurance Marketplace or sign up for Obamacare.  Original Medicare and Medicare Advantage Plans are considered credible coverage; so you are covered!  One Obamacare provision eliminates the fear of not being able to get coverage due to major illness or pre-existing conditions.  This leg of the law DOES NOT apply to Medicare beneficiaries wishing to purchase a Medicare Supplement Plan (Medigap) outside of an open enrollment or guaranteed issue time period.

2.        Medicare recipients received new benefits as a result of the Affordable Care Act (ACA).  One is more preventive services for less.  Medicare now covers over 20 preventive services without charging you a deductible, copayment or coinsurance.  You also get a free ‘Wellness’ visit each year by your regular doctor.  For a full listing of preventive services covered, and how often they are covered, go to:  https://www.medicare.gov/coverage/preventive-and-screening-services.html

3.       Your doctor gets more support.  The Affordable Care Act put new initiatives in place that reward hospitals and doctors for providing more coordinated care and for fewer hospital re-admissions.  This creates a shift from paying for quantities of procedures and tests to rewarding the quality and value of the treatment.  Many Medicare Advantage plan members are also benefitting from in-home visits from registered nurses who take vitals and help manage prescription drugs.

Medical providers also took a hit in their Medicare reimbursement rate; and so while this did help to further protect the Medicare trust fund, it does have people questioning whether medical providers will stop taking Medicare patients in the future as a result of lower payments from Medicare.

4.       You will save money on prescription drugs, and will continue to do so until the coverage gap is closed in 2020 when copayments will be phased down to 25% of the total cost of the drug.  In 2015, that percentage is 45% for brand names and 65% for generics.  (Look for next Monday’s blog for a much more in-depth look at prescription drug costs!)

5.       The ACA has also improved eligibility and drug coverage for low-income Medicare beneficiaries.  By meeting certain income and asset requirements, beneficiaries may receive help paying their monthly Medicare Part B premium and pay lower copayments for medical services and prescription drugs.

Social Security and Medicare Solvency…Should We Buy Into the Political Media Hype?

As a forty-something member of Generation X, and with retirement becoming an ever closer spot on the horizon, is it possible to ignore the consistent (and scary) messages in the media about the rapidly depleting trust funds of both Social Security and Medicare?  Will I be able to rely on Social Security and Medicare to supplement my retirement savings?

It’s hard to separate myth from fact; especially in a time where playing on people’s fears seems to make for darn good journalism.   We’ve been told that the baby boomers are going to wipe out Social Security and Medicare; or evil politicians have borrowed and squandered the hard earned money of the working American people; and let's not forget about all of those able-bodied folks receiving disability unjustly.

I’m not sure who else the media can blame…but, I’m sure there are others!

As an employee in the Medicare health insurance industry, I do see the value in our Medicare system each and every day.  The truth for many Americans is that the amount of money that they have paid into Medicare is somewhat less than the benefits that they will receive.  This is due mainly to the higher costs of medical care and the fact that we are living longer.

So, even though working Americans do pay into Social Security and Medicare, these programs were founded in... and are now grounded in, the principle of social insurance. I’ve never heard of another viable solution that provides for the basic human needs of the aging and disabled population and balances the taxes we want to pay with the demand for services.

Fortunately for us, rapid advances in technology revolutionized the medical and pharmaceutical fields.  This has greatly increased our longevity.  When Social Security and Medicare were signed into law; people weren’t living as long. 

Simply put, these programs were meant to supplement the pensions and savings of Americans who were, statistically speaking, living only into their late sixties and early seventies.

Even in today’s environment, many Americans have not adequately saved enough to keep their standard of living in their retirement years, have not been realistic on what their healthcare costs will be (even with Medicare) and will rely on Social Security and Medicare to help pay for basic necessities.

So, going back to my opening question; can I make Social Security and Medicare a part of my retirement plan?  

My, ‘see things from the glass half full’ mindset says, “YES!”

 Here are my reasons why. 

1.     Social Security is made up of two funds.  The first is for the Old Age & Survivors Insurance (from now on called Social Security) and the other is for Social Security Disability. 

Presently, as soon as mid-2016, the disability portion of the reserve fund will be depleted; and while in desperate need of major reform, congress is expected to act quickly to ensure that the almost 11 million at-risk people receiving disability benefits will not get cut off abruptly next year.  

 Regular social security reserves are expected to be depleted by 2034, and after that, tax income is projected to be able to pay 75% of scheduled benefits until 2089.  This is even taking into account that the number of beneficiaries continues to grow at a substantially faster rate than the number of workers paying into the system.  

2.      Medicare is also split into different funds:  Part A (Hospital Insurance) and Part B and D (Doctors, Outpatient Surgical, Medical Equipment and Prescription Drugs).  There are currently 53.8 million Medicare beneficiaries with an annual expenditure of $613 billion dollars.  This compares to 60 million beneficiaries being paid social security and disability benefits of $859 billion dollars.

Part A, or the hospital fund, is said to have reserves that will last until 2030.  The Part B and D portion of the trust fund is adequately funded indefinitely, (theoretically) due to the fact that it is funded through general tax revenues and monthly premiums paid by Medicare beneficiaries.

While substantial growth in Medicare is occurring now through 2030 (to the tune of 10,000 baby boomers a day), creating a substantial financial shortfall, there are measures that have been put into place with the creation of the Affordable Care Act (ACA) in 2010 that are already creating a positive trend in protecting the Medicare Trust Fund.

3.  Finally, and where I find a lot of confidence, policy makers would commit political suicide if the focus was on eliminating these programs as opposed to coming together to make the long lasting reforms needed to keep these programs in place for the long haul.

America is built on capitalism, and like it or not, the American Medical Association, the Pharmaceutical and the Insurance industries are some of the biggest lobbyists on Capitol Hill.  Billions of dollars annually are funneled to these industries through the Medicare program; and they won’t give that up easily.  It makes good financial sense for them to keep these programs solvent.

Social Security and Medicare "scare media' is more about political fodder than anything else; meant to divide people with political theology.  After reading the 2015 report on these funds, I've come to my own personal conclusion that, while there are great challenges facing these systems today...there are also many creative solutions being proposed to help keep both funds solvent for years and years to come.

So, happy 50th (1965) birthday Medicare!  Happy 80th (1935) birthday Social Security!

And I say...many more!

 To read a full summary of the 2015 State of Social Security and Medicare, visit:  http://www.ssa.gov/oact/trsum/