Medicare

Medicare is the health plan overseen by the U.S. federal government for people who are older than 65. People who undergo kidney dialysis or who have had a kidney transplant also qualify after a certain time period, as do others with serious disabilities such as amyotrophic lateral sclerosis (ALS), also called Lou Gehrig’s disease. The vast majority of benefi ciaries, however, are older Americans.

The government doesn’t actually provide the benefits. Instead, the Centers for Medicare and Medicaid Services con tract with many commercial payers to provide these services. Medicare has some required services that all providers must cover; these are called National Coverage Decisions. The pro viders may then add on more benefits that individuals can decide to purchase for drugs and supplemental insurance coverage. These plans are often designated by terms such as bronze, gold, or platinum with a higher price tag (the premium) per person.

So who is eligible for which part and how much does the patient pay? A working adult has probably paid Medicare taxes, as these taxes are almost always deducted immediately from a paycheck. A person needs to have paid in for 40 quarters—equal to about 10 years of work—in order to get Part A services without paying premiums. That’s what the taxes cover—a sort of prepayment. Someone who hasn’t worked/contributed long enough may still qualify for some services based on the work record of his or her spouse. Since that will be an individual-specific question, contacting your local Medicare office will be the best way to get an answer. A list of organizations, names, and numbers is located on the State Health Insurance Assistance Plans (SHIP) website: shiptacenter.org. People may also call SHIP toll-free for assistance at 877-839-2675.

There is no simple “This is how much it costs per person” answer. It depends on the possible access the person has, the number of beneficiaries (people being covered), geographic location of a person, benefits provided, and drug coverage, if selected. That’s because Medicare consists of several parts, each designed by a letter and each with a very different focus, price tag, and eligibility requirements.

Part A covers the inpatient services, meaning stays in the hospitals, in skilled nursing homes, general nursing homes, hospice, and some home health services. Medicare has some required services that all providers must cover along with some local benefits based on an individual’s plan type. See medicare.gov/what-medicare-covers/part-a/what-part-a-covers.html.

Part B is focused on outpatient services such as laboratory (lab) tests, ambulatory surgery, and general doctor visits. This includes all wellness visits (aka “the annual visit”) and other preventative services such as a flu shot at no charge to Medicare participants. If a person is enrolled in Medicare Part A, he or she is automatically registered for Part B.

Part B also covers services or supplies needed to diagnose or treat a medical condition. Ambulance services, mental health visits, and even durable medical equipment (DME) such as crutches or wheelchairs should be covered. There is almost always an annual premium for this type of coverage. Based on the type of equipment (manual versus electronic wheelchairs, for example), the coverage may vary from plan to plan (what-medicare-covers/part-b/what-medicare-part-b- covers.html).

Neither Part A or B covers all services. Long-term care (out side what is covered in Part A), most dental visits/products, eye examinations for getting new glasses, dentures, most cosmetic surgery, acupuncture, and hearing aids are not covered under these plans. While a few plans cover prescriptions, most do not.

To get prescription drugs at a reduced rate, one must enroll in Medicare Part D. This is not an automatic bene fit included with Parts A and B: Anyone wishing to be on a plan must sign up and pay an added premium in addition to what is paid (if anything) for Parts A and B. These prescription drug plans (PDPs) vary based on the provider, the plan type, and the number of formulary tiers (medicare.gov/part-d/coverage/part-d-coverage.html).

As with insurance plans, the trick to figuring out which Part D plan to enroll in is based on how sick you imagine you will be in the following year. If you think the year will be complex with multiple disease diagnoses and medications to take, it would be smarter to pay more up front with premiums yet save more long-term when the expenses become great. Healthy seniors with minimal conditions may prefer to enroll in a more basic plan with no frills. Medication copays will be higher on the cheaper plans and cover fewer brand-name drugs.

The Centers for Medicare and Medicaid Services (CMS) website has a considerable amount of information: medicare.gov/part-d/costs/part-d-costs.html.

Anyone wishing to find out exactly what Medicare covers may be interested in the National and Local Coverage Decisions. These are the technical documents which explain in detail why Medicare has chosen to cover a certain condition, drug, or technology. National Coverage Decisions (NCDs) are very hard for companies to get, as it means Medicare will require that all Medicare beneficiaries are eligible for it (whatever “it” may be) provided a list of criteria is met. Local Coverage Decisions (LCDs) are easier to get, as a company only needs to get individual payers on board. However, it also means that the decision is only for a given geographic location, so the company must contact each payer individually, making it a very time-consuming process. The CMS has a database of these decisions in the Medicare Coverage Database (MCD): cms.gov/medicare-coverage-database/overview-and-quick-search.aspx.

The quick search is ideal to locate brand-name drugs or technologies, or something top level such as mammograms. Each coverage decision includes a description of the item or service, the indications and limitations of coverage, and (if suitable) a revision history, which details changes in the policy across time. Many times, a full complement of research articles used in the decision will also be noted.

Please note that these NCDs and LCDs only indicate coverage at a top level. They do not mention cost information. They do not indicate how often or where something may happen. And they are very technical in nature, noting medical coding requirements and preauthorization information.

Many people may find it easier to call the local customer service person for their exact policy coverage and costs than to negotiate the MCD. Often, the number to call will be located on the back of the beneficiary card.

Medicare Supplemental (Medigap)

Part C of the Medicare plan is more commonly known as Medicare Supplemental, or Medigap. These are not the same plans as Medicare Advantage. As this is a very common error made, clarity is required.

Medigap plans, which are the Part C piece of Medicare, are only available to those enrolled in Parts A and B, or what we think of as “traditional Medicare.” These plans are not run by the government, but are private insurance by commercial payers that Medicare enrollees may purchase to cover the out-of-pocket costs for Parts A and B that are not covered by the government plan.

Because this is an extra policy plan, these plans have monthly premiums in addition to the premiums paid for under Part B. Since 2006, these plans have not covered prescription drugs. Patients need Part D for drugs.

These plans also only cover one person, whereas Medicare Parts A and B may cover a Medicare beneficiary and spouse. Each person who wants Medigap coverage needs to purchase an individual policy.

Medigap coverage kicks in after Medicare Parts A and B have paid their shares. Anyone with Medicare Advantage plans will need to leave that plan (i.e., cancel it) in order to have Medigap. However, Medigap may not cover everything. In general, these plans will not cover long-term care, vision or dental care, hearing aids, eyeglasses, or private-duty nursing.

The CMS has a website with more information on these plans; just visit medicare.gov/supplement-other-insurance/medigap/whats-medigap.html. Still have questions, or want to talk to someone on the phone? As noted earlier, contacting your local Medicare office will be the best way to get an answer. A list of organizations, names, and numbers is located on the SHIP website: shiptacenter.org. People may also call SHIP toll-free for assistance at 877-839-2675.

Medicare Advantage

Medicare Advantage, at its core, has basically nothing to do with Medicare except to pick up payments after Medicare. If someone already has Medigap coverage, he or she cannot have Medicare Advantage. It’s only one or the other. It’s illegal for any insurance company to sell you both plans. If you think you have both plans, call SHIP immediately.

Medicare Advantage plans are private health plans (medicare.gov/sign-up-change-plans/medicare-health-plans/medicare-advantage-plans/who-can-join-medicare-advantage-plan.html). There is no government funding or subsidies. One must still have Medicare Parts A and B to buy a policy, but that is the only criteria as long as you live in the service area of the plan you wish to join and you do not have end stage renal disease (ESRD). ESRD patients are not eligible for Medicare Advantage plans.

There are multiple types of Medicare Advantage plans: Health Maintenance Organization (HMO), Preferred Provider Organization (PPO), Private Fee-for-Service (PFFS), or Medicare Med ical Savings Account (MSA) Plans. Details on the differences are covered later, but for now:

• HMO: Patient sees main physician/nurse; needs referrals for specialists; harder to see out-of-network doctors; costs the least
• PPO: Patient sees any physician in the network without a referral; costs more based on specialist/network
• PFFS: Patient sees any physician in or out of network; costs more based on specialist/network
• MSA: This is basically a savings account in a bank to pay for certain types of healthcare costs

To find a Medicare Advantage plan, go to the Plan Finder website provided by the CMS (medicare.gov/find-a-plan/questions/home.aspx). General plans can be found by enter ing a ZIP code and walking through a few steps about your coverage. People may also call SHIP toll-free for assistance, as noted previously.