In the hospital or just visiting—it matters with Medicare

Hospitals are increasingly categorizing patient status as observation vs. inpatient.  With Medicare benefits, this can make a significant difference. 

Effect on Rehabilitation Coverage

If you have a condition that will require follow up admission to a Skilled Nursing Facility (SNF–nursing home or rehabilitation facility) for rehabilitation, such as from a stroke or hip replacement, for Medicare to cover that SNF admission, you need to be admitted to the hospital for 3 days prior to the rehabilitation.  If you are on observation status, that is not considered an inpatient hospitalization and, thus, does not meet that criterion.  Normal Medicare coverage would cover 20 days at full cost.  If you don’t meet that criterion, it would not cover it at all.  If Medicare does not cover it, your secondary supplemental insurance will not cover it either. 

Medicare Part A vs. Part B Coverage

If the hospital stay is classified as observation vs. inpatient, Medicare Part B is covering instead of Part A (Part A normally covers inpatient hospitalization).  If you only have Original Medicare (Parts A and B with no supplemental coverage), the deductible is better–$140 for Part B vs. $1156 for Part A.  However, after the deductible, the difference could be huge.  Once you pay the $140 deductible of Part B, Medicare coverage is 80%.  The remaining 20% of a hospitalization could be thousands of dollars—more than the $1156 deductible of Part A that completely covers 60 days of hospitalization.

What to Do When Hospitalized

After the initial crisis of admission to the hospital is over, make sure someone checks what the hospitalization status is.  If you do not inquire, you may not find out until the bills come in or you find out your stay will not be covered when you are admitted to the rehabilitation facility.  Bottom line, ask.  Your doctor determines the status according to criteria for your medical situation.  If you ask, he/she may be able to review any changes in your medical situation and re-classify your status.  If you are not in a position to be your own advocate, hopefully a family member, friend, or social worker can help you.  Don’t get caught in this confusing situation.

Some information for this blog post was referenced from  www.caremanagementllc.com and 2012 Healthcare Choices for Minnesotans on Medicare. 

Veterans and Medicare

Having VA health benefits can be a tremendous financial help, but understanding how it works with Medicare can be confusing.  If you receive all your health services at a VA facility, you may only have to pay up to $8 per prescription medication. 

Medicare-eligible Veterans and emergency care

However, if you need emergency care, the VA system does not provide that.  If you have chosen not to pay for Medicare Part B ($99.90 per month in 2012) when you were first eligible, you may be not-so-pleasantly surprised at your bill for initial physician, emergency room or ambulance services at a non-VA facility.  Of course, once you are stabilized and can be transported, you can be transferred to VA facilities.

Veterans and supplementing VA coverage

If you have Medicare Parts A and B, you are eligible to enroll in a Medicare Advantage plan or a private supplemental plan.  Medicare Part A alone covers the initial hospital basic charges with a 2012 deductible of $1156.  With just Medicare Part B, you have 80% coverage for physician, emergency room and ambulance services.  Sometimes there are very inexpensive Advantage or supplemental options which can provide more coverage for these services, especially if you do not need the Medicare Part D prescription drug coverage also.

Retired military and Medicare

If you are retired military, you are eligible for Tricare for Life, again great health care coverage.  But to be eligible for this coverage, you must take Medicare Parts A and B when you turn 65.  If you are still on active duty when you turn 65, you do not need to enroll in Medicare Part B until you retire. 

Help with Medicare decisions

The government wants to provide good health care for the people who have risked their lives to maintain our freedom.  Don’t be unpleasantly surprised.  If you fall into one of these categories, contact your county veteran service officer   and/or state SHIP counselors (State Health Insurance Assistance Program) for help in figuring out how Medicare will work with your VA coverage. 

And thank you for sacrificing for the rest of us!

Problem with Medicare 12/7 Deadline– Ask for Help

Since this year was the first year that the Annual Open Enrollment Period for changes to Medicare Advantage and Part D plans ended 12/7 instead of 12/31, a request for an extension might be possible.  CMS (Centers for Medicare and Medicaid Services) has said it does not intend to extend the deadline, but if enough people have missed the deadline and complain, there may be some flexibility.  Besides, what do you have to lose by at least asking for help?

This year is also the year that the first Baby Boomers turned 65.  If your personal Initial Enrollment Period overlapped with the Annual Open Enrollment Period, you may have had some difficulty enrolling in a Medicare Advantage, Cost, Medicare Part D, or supplemental plan.  If you erroneously received a 2012 application when you were trying to sign up for the end of 2011, you may have missed deadlines which left you with a gap in health coverage or a penalty for not signing up by the end of your Initial Enrollment Period.

If you fit into either of these categories, contact your SHIP  (State Health Insurance Assistance Program) counselors.   Congress needs to know if there are Medicare beneficiaries who were negatively impacted by the new deadline during this transition period.  Contact your Senator or Representative’s office for help.

As much as possible, remember to document the dates, times and reference numbers of phone calls, name of person with whom you spoke and any other helpful info as to what paperwork you submitted.  The more information you have, the easier for the SHIP counselors or Congressional staff to assist you.

Missed Medicare Dec. 7 Deadline? There may still be hope!

If you have a Special Enrollment Period (SEP), you may still have time to make changes to your Medicare Advantage or Part D prescription drug plans.

New to Medicare

First, if you are new to Medicare, you have up to 3 months after your month of eligibility (birth month if just turned 65) to enroll in Medicare Advantage and Part D plans.

Recent Move and effect on Medicare

If you have moved (see examples), you have 2 months to change or join plans.

1. Moved out of your plan’s coverage area
2. Moved from a skilled nursing facility/nursing home
3. Been released from incarceration

Lost health coverage through no fault of your own and effect on Medicare

Again you have 2 months after that coverage ends—February 28, 2012 if coverage ends December 31, 2011.  Examples of this type of loss include:

1. Your employer/union drops retiree coverage
2. You are no longer eligible for Medicaid/Medical Assistance
3. Drug coverage changes and is no longer “creditable.”

 Lost health coverage by your own choice and effect on Medicare

 You also have 2 months to change if you decide to:

1. Drop your employer coverage during open enrollment (coverage ends 12/31/11)
2. Leave a Medicare Cost plan with drug coverage

 Unique SEPs for Medicare

There are SEPs for some very specific situations.  Contact your State Health Insurance Assistance Program  (SHIP) counselors or Medicare at 1-800-MEDICARE for more info.

 Stop working and effect on Medicare

If you had health coverage because you or your spouse was working and that employment ends, you have an 8 month SEP.  Remember you have to submit the appropriate paperwork with Social Security (See blog post “Medicare and Working Past 65.”)

Now you can relax and enjoy the holidays.  Remember, with these SEPs the coverage will be effective the beginning of the following month after you make your change.

D-Day for Medicare Plan Changes–December 7, 2011

Okay, December 7 is not D-Day, but the anniversary of the attack on Pearl Harbor.  But for Medicare beneficiaries, December 7 is “Decision Day.”  All changes to Medicare Part D and Medicare Advantage (Medicare Part C) plans must be made by December 7 this year.  In previous years, that date was December 31.  So please pass this on to anyone you know who has Medicare.

Medicare Part D and Medicare Advantage (Medicare Part C) Plans

If you make changes on www.medicare.gov or the plan’s website, you have until midnight on December 7.  However, if you send in an application, it must be received by the plan by end of business on December 7.  Your insurance company may be staying open until midnight that day, but you must make sure they have received the correct application by that date.  Make sure you use the correct application for the specific year and specific plan you want.

Supplemental or Medigap plans

If you have a supplemental or Medigap plan to cover the gaps in basic Medicare Parts A and B, you still have until December 31 to make those changes because you just have to have changes submitted before the end of the month previous to the effective date of the new plan.  So if your insurance company changed the benefits or premium of your plan for 2012, and you want to change to a different version/level of their plans or go to another company’s supplemental/Medigap plan, you can do that up until December 31.  Make sure you use the application for the correct year and specific plan you want.

Help

Remember, contact your state SHIP counselors  or contact Medicare directly at 1-800-Medicare  for help.

Then enjoy the rest of December and your holidays!

The Best Medicare Part D For You: Want To Know How To Find It?

Those of us working with Medicare regularly sometimes forget that many people are not as familiar with the basics as we are.  So I want to review the best way to figure out which Medicare Part D drug plan is best for your specific list of drugs.  Please forgive the length of this post.  Topics have been highlighted to help you find what you need.

www.Medicare.gov

First, you do not sign up for Medicare Part D with Social Security as you do for Medicare Parts A and B.  You have to sign up with a private drug plan in your area.  Hands down, the best way to do this is by going to medicare.gov and entering your specific medications.  For very helpful instructions on how to use this website to find that Medicare Part D plan, please see page 58 of Step by Step: How to Use the Medicare.gov Plan Finder provided by the Minnesota Board on Aging.  Even though this is a MN organization, the Medicare website has information for all Medicare beneficiaries.  You find plans for your area by simply entering your zip code. 

Drug Restrictions

The directions are very helpful but leave out a few pieces of very valuable information about drug restrictions.  Medicare Part D Plans attempt to limit drug costs by often having preferred drugs in specific drug classes (drugs which treat similar symptoms).  If your drug is not one of these preferred drugs, the plan may have drug restrictions on the use of your drug.   In the Step by Step instructions, Quantity Limitations is described.  This is usually not a big obstacle unless you need to use more than the usual dosage for this drug.  However, Prior Authorization and Step Therapy are definitely something you want to be aware of in choosing a plan.

Prior Authorization requires that your physician must ask the drug plan for permission before prescribing this drug to make sure it will be covered when you go to the pharmacy.

Step Therapy means that there are usually less expensive drugs that can be used for your condition.  The drug plan wants you to try those drugs first before covering your more expensive drug.  However, if your physician can show that you have tried those drugs before and you had either a bad reaction or found that the drug was not effective for you, the plan may cover your drug. 

If you find plans that cover all your drugs and have similar “Estimated Annual Drug Costs” (which includes premium and drug co-pays), then the drug restrictions may be very important in determining the best plan for your specific drugs.  If the physician has to file paperwork or make contact with the plan before prescribing what he/she believes is the best drug for you, both you and your physician are going to need a pain reliever for the subsequent headaches.  Consider going with the cleaner plan that has fewer or no Step Therapy or Prior Authorization for your drugs.

List of Medicare Part D plans

The best benefit of the website is that you can see the list of the plans in your area for your specific drugs ranked by “Estimated Annual Drug Costs.”  Just remember to look beyond the basic cost of the plan to items such as the drug restrictions, mail order, and “Overall Plan Ranking” before making your final decision.  

Additional Help

As always, you can call your local State Health Insurance Program (SHIP) counselors for help navigating this website, as well as other help with your Medicare decisions.  (Click here to locate your state SHIP counselors)  Medicare Part D drug coverage has been a welcome help to so many people in retirement, but it cannot be said that choosing is easy!    

P.S.  Remember you need to make your decisions by December 7.

WOW! A Decrease in Medicare Premium, even with an increase in Social Security income

Well, not for everyone—but if you entered the Medicare system in 2010 or 2011, you will have a significant decrease in your 2012 Medicare Part B premium from 2011.

2012 Medicare Part B Premium

Everyone on Medicare will be paying $99.90 per month for Part B in 2012. That is down from $115.40 or $110.50 for people who joined in 2011 or 2010, respectively. For everyone who was on Medicare before 2010, it is an increase of $3.50. That is less than most people expected since their premiums had remained the same for the previous 3 years, and those of us on employee plans have felt benefits and premiums move more significantly than 3.6% over the same time period.

2012 Medicare Part B Deductible Decrease

2012 Annual Medicare Part B Deductible for physician services is $140, a $22 decrease from 2011.

2012 Medicare Part A Deductible

2012 Medicare Part A deductible for hospitalization is $1,156, an increase of $24 from 2011. Remember this is not a true annual deductible, but for each benefit period which begins anew when the beneficiary has been out of the hospital/Skilled Nursing Facility for 60 consecutive days.

2012 Medicare Parts C (Advantage Plans) and D

Since these premiums and deductibles vary according to your specific private plan, the changes vary, but on average across the nation, 2012 Medicare Advantage premiums will be 4% lower. Your individual plan may be higher. The average Medicare Part D premiums have gone down slightly which is good news for those who have to pay penalties for late enrollment or income-adjusted premiums.

For More Details

Click here for more specifics, including 2012 premiums for higher-income beneficiaries.  This link gives info on how the premiums and deductibles are calculated each year. “By law, the standard premium is set to cover one-fourth of the average cost of Part B services incurred by beneficiaries aged 65 and over, plus a contingency margin.” The link lists factors included in determining the contingency margin.

Impact of COLA

With a Cost of Living Adjustment (COLA) of 3.6% for Social Security income in 2012 which averages $43 more in monthly income, these Medicare cost changes will not be as painful as anticipated. The COLA allowed the cost to be distributed across all Medicare beneficiaries, not just the ones who will be new to Medicare in 2012 (as in the past 2 years when new premiums were $115.40 and $110.50). Also, surprisingly, the numbers include lower-than-expected use of medical care and spending growth in the Medicare program. Hopefully the Super Committee will notice.

HSAs and Medicare do not mix

HSA and Medicare

Many people work past 65 and do not need to take advantage of Medicare services yet because they will continue to be covered by their employee health plans.  If you choose (or are forced—covered in a later blog entry) to sign up for the “free” part of Medicare (Part A), recognize that you must stop contributing to any SA, employer or otherwise.

If this is your situation, your spouse can easily open an HSA in their name at a local bank.  This money can be used for the co-pays or deductibles for these dependents covered by the employer health plan.  You can also continue to withdraw money from your existing HSA to cover your own co-pays and deductibles, but you can no longer contribute.

How do you know if what you have at work is an HSA?  An HSA is a tax-advantaged Health Savings Account to which you and/or your employer contribute money to help cover co-pays and deductibles.  An HSA, however, must be paired with a qualified High–Deductible Health Plan.  These health plans have deductibles equal to or larger than $1200 for an individual and $2400 for a family (in 2011), in addition to other specific characteristics.  

FSAs and HRAs are not in conflict with Medicare.  These can be Flexible Spending Accounts (Section 125) to which you contribute money or Health Reimbursement Arrangements (Section 105) to which your employer contributes money.  They are not associated with a qualified High-Deductible Health Plan, but are also used to pay for health care co-pays and deductibles.

So if you are thinking of taking advantage of Medicare Part A because it is “free,” make sure you know the consequences if you use a tax-advantaged HSA health fund.

Oh, by the way, Medicare Part A feels “free” because you do not have to pay a premium for it—you paid your share during your working years. 

This blog entry would not be available without the fact clarification provided by Freedom Services business  who provides health benefit services for mid-size employers.

Surprised by a Higher Medicare Premium?

As the Silver Tsunami of Baby Boomers starts hitting Medicare, some of those new to Medicare may be surprised by higher than expected monthly premiums.  In an attempt to bolster the Medicare system, since 2007 the highest-income people on Medicare have been paying higher premiums.

Who pays higher Medicare premiums? 

5% of Medicare beneficiaries–for example, those who file joint Federal income tax and earn more than $170,000 or single taxpayers who earn more than $85,000–now pay a higher percentage of the actual cost of Medicare Part B and D premiums.  Most beneficiaries pay 25% of the actual cost, with the Federal government covering 75% of the premiums.  Depending on your income level, you could now be paying up to 80% of the premium.

To determine if you will be subject to the higher premiums, see pages 7-9 of Rules for Higher-Income Beneficiaries (SSA Publication 10536).  

How is my income determined for higher Medicare premiums?

To determine your income, the MAGI (Adjusted Gross Income plus tax-exempt interest income) on your latest income tax return is used.  If your current retirement income is significantly lower than your latest tax filing, contact Social Security to have a recalculation.  If you have since retired, divorced, been widowed, etc., you just need to contact Social Security and provide documentation to change your income level.

For all the events which qualify you to request a recalculation, see page 6 of Rules for Higher-Income Beneficiaries (SSA Publication 10536 pdf).

If you do not fall into these categories, but want to request an appeal, click here for a Request for Reconsideration Form(Form SSA-561 pdf).

So if you happened to be one of those Baby Boomers who was “encouraged” to retire early OR just got “right-sized,” and received a lump sum payment that pushed you into a higher income level for one year, check out these links—It’s worth it!

www.Medicare.gov Update for 2012

Medicare 2012

If you or your family/friends/clients are on Medicare, remember the time to review your coverage and make changes has changed.  This year the Open Enrollment is from October 15 to December 7.  You do not have until the end of the year to make changes as in previous years.

You will be able to see the new plans for 2012 on the Medicare website, Medicare.gov, on Oct. 1 (however, the ratings for the plans will not be updated until Oct 12). 

This year Medicare.gov will make it easier to find important information.  On the first page which you see that lists the specific health plans in your area, there will be indicators that show if the plan provides any vision (green circle with a V), dental (blue circle with a D) and/or hearing (orange circle with an H) coverage.  If these coverages are important to you, it will be much easier this year to find out which plans to compare.  A blue circle with an N means it is a national plan that you can easily use even if you spend months in states other than your state of residence. 

If you are comparing health plans on Medicare.gov, you will be able to see the copays for in-patient, skilled nursing (nursing home) and mental health services on the same chart as all other services, an improvement from previous years.

This year you can change your coverage to a 5-star rated Advantage or Prescription Drug Plan any time during the year.  The plan must be available in your area, and you can only make this type of change once in any calendar year.  BUT you can add or change your Part D plan at the same time—a major benefit improvement from previous years.  If you add Part D and never had creditable coverage before, you will still be subject to a penalty, but at least you will not have to wait for January of the following year to even gain coverage.

One other change that makes Medicare.gov more convenient this year is that you may be able to enroll in a Cost plan online.  Previous years you still had to mail or fax a signed application before this type of health plan was allowed to process your application.

Okay, so Medicare and its website are still confusing—but they are improving.  If this all sounds like Greek to you, call your State Health Insurance Assistance Program (SHIP) for individual help: click here for your state SHIP info.  In Minnesota, call 1-800-333-2433.