About Medicare and Changes in 2012

Presented by Nancy A. Dykeman, CLTC, CSAfor Society of Certified Senior Advisors®

Agenda Common misconceptions Differences among Medicare

Parts A, B, C and D; Medigap Enrollment Medicare: 2012 changes Valuable resources

Common Misconceptions “Medicare is free and covers

everything.” “Medicare Part A with a Medigap

policy is enough.” “I can enroll in Medicare whenever I

want to.” My doctor will tell me what I need for

Medicare coverage.” “Medicare will cover my long-term

care.”

What Seniors Are Saying . . . “I turn 65 next year and I’m counting on my Medicare to replace my current insurance. There are so many moving parts to Medicare, I’m confused.”

“Where would I find information to help me understand my Medicare insurance benefits?”

Benefits ofUnderstanding Medicare

CSAs –

Learn and share knowledge; guide seniors to resources Increase client loyalty and trust Assist their own families

Seniors – Make better decisions for their

health care, short- and long-term

Medicare - Since 1965…

Changes in coverage Increasing premiums More out-of-pocket expenses Added prescription drug coverage

Do you think things might keep changing?

Bailing out of Medicare? July 6, 2011 Article by Paula Span

“Dr. Tara Bishop, an internist and assistant professor of public health at Weill Cornell Medical College in New York analyzed data from a survey of 4,112 physicians practicing in private, nonhospital offices and accepting new patients from 2005-2008. (today, based on her findings) ‘Well over 90 percent of doctors, in all kinds of specialties, still take new Medicare patients.’ Based on patient surveys…a small proportion have trouble when they seek a new primary care physician. Access problems might be greater in certain geographic areas and doctors might accept Medicare patients only in limited numbers. “

What is Medicare?

Medicare is health insurance for people:

• Age 65 or older

• Under age 65 with certain disabilities

• Any age with End-Stage Renal Disease (ESRD) -- permanent kidney

failure requiring dialysis or a kidney transplant

Medicare’s GoalTo make it easy for you to get the highest quality health care at the most affordable price.

To transform itself from a program which simply pays the bills to a program which actively supports a high quality health care system.

Medicare: A Handful of Coverage! Part A = Original Medicare (your

left thumb) hospitalization, rehab Part B = Doctors, outpatient

services (first finger) Part C = Advantage Plans

including A, B and Part D (middle finger) Part D = Prescription Drug

Coverage (ring finger) Medigap = Pays deductibles and co-

pays (little finger)

Part A – Your Thumb Part A is hospitalization insurance

for inpatient care, including: Rehabilitation facilities Some skilled nursing facility care Hospice care Some skilled home health care

Medically necessary and reasonable treatments

Part A continued Must show significant

improvement

Outpatient therapy Speech-language Occupational and physical

Entitlement program; majority of beneficiaries do not pay premiums

Part A + Employer PlanFor seniors who continue to work:

Comprehensive

Both plans pay; one is primary provider

Employer plan covers Part A co-pays and deductibles, regardless of who the primary provider is

Which Plan Pays First?

At the time claim is submitted -- Employer plan administrator Health care provider Medicare . . .

Determine which plan is the primary coverage based on Medicare rules

Part B – First Finger

Medically necessary services Doctor Outpatient care Other medical services Preventive services

Voluntary plan; monthly premium paid by deduction from Social Security check

Part C – Middle Finger

Called Medicare Advantage Plans Cover Parts A and B plus provide

additional coverage Offered by private companies

Voluntary program; Part C premiums (if any) are paid directly to plan provider; senior must still pay Part B premiums, too

Part C - Medicare Advantage continued More coverage than Parts A and B,

especially preventive services Vision exams and eyeglasses Dental Health and wellness programs Rx (most include Medicare drug

prescriptions)

Part D – Ring Finger

Prescription Drug Plan – 2004 Must have Parts A and B Private companies sell plans Must live in plan’s service area

Part D CostsPlans vary in cost and drugs covered Co-pays or coinsurance Deductibles Monthly premiums Drug costs

Voluntary program; senior pays premiums out-of-pocket or premiums are included in Part C Medicare Advantage Plan

Part D continued Initial Deductible (2012) $320 Initial Coverage Limit $2,930 Out of Pocket Threshold $4,700 Coverage Gap (donut hole) begins once you reach

$2,930 and ends when you spend a total of $4,700

Part D enrollees will receive a 50% discount on total cost of brand name drugs while in donut hole and a maximum of 86% co-pay on generic drugs while in the coverage gap.

Medigap – Little Finger Also called Medicare Supplement

Plans

Sold by private insurance agents

MUST have Parts A and B to buy

Covers only 1 person

Medigap – Little Finger continued

Helps pay costs that Parts A and B don’t: Co-pays Coinsurance Deductibles

Voluntary program; senior pays for it

Medigap Plans continued 11 Standardized plans – A through

N

A is basic coverage; more in the others, some offer out-of- country coverage, most popular to cover most costs is plan F.

Medigap plans are sold by private insurers. There are 11 sets of currently available coverages: A, B, C, D, F, G, K, L, M, and N. Four discontinued plans--E, H, I, and J--are still available to people who had the plans before they were closed. Rates for the plans vary by insurer and state, but federal rules require that all plans with the same letter must offer the same coverage.

Medigap Plans continued

Cost varies

Don’t need a Medigap plan if you have a Part C Medicare Advantage plan

Medicare Case Study

Deciding if you want Original Medicare or a Medicare Advantage Plan

When to Enroll or Change Your Medicare, Medigap Plans

Part A and Part B enrollments Automatic Initial General Special

Part C Medicare Advantage Plans Part D Prescription Drug Medigap Supplemental Plans

Annual Changes in Medicare All parts of Medicare

New premiums New limits

New plans added

Where to learn more: www.medicare.gov

Part A in 2012

Monthly Premium $0 if senior paid at least 40 credits

in employment taxes to Social Security during working years (or is a spouse or widow/er of such a person) *

$451 for less than 30 credits

* Approximately 99% of beneficiaries. (Centers for Medicare and & Medicaid Services)

Part A in 2012 continuedHOSPITAL- Each benefit period, you pay:

Deductible: $1,156 for a hospital stay of 1-60 days

Coinsurance for a hospital stay: $289 per day Days 61-90 $578 per day Days 91-150 (Lifetime Reserve Days)

All costs for each day beyond 150 days in a benefit period.

Can have more than one benefit period in a year

Part A in 2012 continued

SKILLED NURSING FACILITY

Each benefit period, you pay:Coinsurance $0 Days 1-20 $144.50 per day Days 21-100 All costs for each day after day 100 in a benefit period.Can have more than one benefit period in a year

Part B in 2012Premium based on annual income

Most pay $99.00 monthly *

Social Security withholds their Part B premium and their incomes are:

Individual: $85,000 - $170,000 ($139.90) Joint: $170,000 to $214,000 ($139.90)

* Approximately 73% of beneficiaries. (Centers for Medicare & Medicaid Services)

Part B in 2012 continued

Depending on income for singles and couples the higher the income over $85,000 for an individual and $170,000 for a couple may pay up to $319.70 a month.

Source: www.medicare.gov

Part B in 2012 continued Deductible: $140 annually

Coinsurance or co-pay:Seniors pay these amounts for most doctor services, durable medical equipment, outpatient mental health care, and other services

Coinsurance (another carrier); co-pay (cash out-of-pocket)

Part C in 2012Medicare Advantage Plans

Premiums vary depending on provider and plan – some are $0

Pays out-of-pocket costs for: Co-pays Coinsurance Deductibles

Don’t need a Medigap Plan

Part D in 2012

Premium Depends on the drugs you take

Depends on your State

Future of Medicare“Absent fundamental reforms, over the next two decades the average American household’s health-care spending, including the portion of its taxes that pays for Medicare and Medicaid, will go from 23% to 41% of average household income . . . Michael Levitt Former Secretary of Health and Human Services

Medicare Future continued“The projected date of Health Insurance (HI) Trust Fund exhaustion is 2024, five years earlier than estimated in last year’s report, at which time dedicated revenues would be sufficient to pay 90 percent of HI costs.

The drawdown of Social Security and HI trust fund reserves and the general revenue transfers into SMI will result in mounting pressure on the Federal budget. In fact, pressure is already evident. For the sixth consecutive year, a "Medicare funding warning" is being triggered, signaling that projected non-dedicated sources of revenues -- primarily general revenues -- will soon account for more than 45 percent of Medicare’s outlays. That threshold was in fact breached for the first time in fiscal 2010.”

A SUMMARY OF THE 2011 ANNUAL REPORTSSocial Security and Medicare Boards of Trustees

Last Thoughts… In 1965 America’s median age was 28.4,

now it is 35.3 years.

The average life expectancy is age 80 (men and women combined)

Ratio of workers to seniors has steadily declined; number of seniors living long enough to have 5 or more chronic conditions -- 23% of Medicare beneficiaries -- has increased

Source: George Will, The Washington Post

Long-Term Care -- Does Medicare Cover It?

Part A – Partially; only skilled, not custodial care

Part B – No Part C – No Part D – No Medigap Supplement Plans - No

Valuable Resources

1-800-MEDICAREwww.medicare.gov

Medicare & You 2012 Handbookhttp://www.medicare.gov/Publications/Pubs/pdf/10050.pdf

Where to Get Your Medicare Questions Answered

Thank you.