Let’s Learn Medicare · 2015. 9. 9. · Medicare and Medicaid began in 1965 as part of President...

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Let’s Learn Medicare

Medicare and Health Reform

© 2010 Medicare Rights Center

What is the Medicare Rights Center?

The Medicare Rights Center is a national, not-for-profit consumer service organization that works to ensure access to affordable health care for older adults and people with disabilities through:

Counseling and advocacyEducational programs Public policy initiatives


Medicare Basics


Medicare

Health insurance for people 65 and older and people with disabilitiesPeople of all income levels eligibleRun by the government but can be provided by private companiesCovers most medical services a beneficiary needs


Medicare and Medicaid

Medicare and Medicaid began in 1965 as part of President Johnson’s “Great Society”

Older and low-income Americans were unable to buy private health insuranceSocial insurance = shared risk and social safety net

Medicare is a federal government program that gives health care coverage to people 65 or older or have a severe disability, no matter what their incomeMedicaid is not the same as Medicare. It is a state and federal program offering health care coverage if a person has a very low income


Medicare Eligibility

U.S. citizens or people who have their resident visa and have lived in the U.S. for 5 consecutive years; and

Are 65 and older; orHave been getting Social Security Disability Insurance (SSDI) or Railroad Disability Annuity checks for total disability for at least 24 months; orHave End-Stage Renal Disease (ESRD or kidney failure); orHave ALS (Lou Gehrig’s disease)

Work history only affects how much a person pays for Medicare


Getting Medicare benefits

Original MedicareTraditional program designed in 1965Accepted by most doctors and hospitals in the countrySupplemental insurance can help pay your out-of-pocket costs (like deductible and coinsurance)

Medicare private health plans (HMO, PPO)Began in 1997 as Medicare + ChoiceNow known as Medicare AdvantageMust offer the same benefits as Original Medicare, but can decide how and when you can access them

Must use doctors and hospitals in the plan’s network.May offer additional benefits


Parts of Medicare

Medicare benefits are administered through three different “parts”

Part A – Hospital/Inpatient BenefitsPart B – Doctors/Outpatient BenefitsPart D – Prescription Drug Benefit

(added 2006)

What happened to Part C?Private Health Plans (HMO, PPO)

Way to get Parts A, B and D through one private planNot a separate benefit


Medicare Part A and B CoveragePart A

Inpatient hospitalInpatient skilled nursing facilityHome health careHospice care

Part BDoctor servicesPreventive careDurable medical equipment (DME)

Such as wheelchairs, walkers, oxygen tanksHome health careX-rays, lab, ambulance servicesTherapy services (PT/OT/ST)


Premium Free for those with 10 yrs. work

Hospital deductible$1,100 in 2010 for each benefit period

Hospital coinsurance$275 in a day for days 61-90, each benefit period$550 for days 91-150 (these are 60 non-renewable lifetime reserve days)

Skilled nursing facility coinsurance$137.50 a day for days 21-100 for each benefit period

There are programs that can help people with their Medicare costs if they have a limited income

Part A Costs


Part B Costs

Annual deductible: $155 in 2010Monthly premium: $96.40/$110.50* in 2010

Higher for people who have very high incomeThere are programs for people with limited incomes that can help pay the Part B premium

Coinsurance:Medicare pays 80% of Medicare-approved amount for doctors’ services; beneficiaries pay 20% coinsuranceException: Outpatient mental health has a 45% coinsurance

*Federal law does not allow the Part B premium to increase higher than that year’s automatic cost of living adjustment (COLA) to the Social Security benefit. In 2010 there will be no COLA. So, in 2010 the basic monthly Part B premium will remain at $96.40 if someone is enrolled in Medicare Part B and has the premium deducted automatically from their Social Security check, Railroad Retirement or Civil Service retiree benefits. If however, a person does not have their Part B premium withheld from their Social Security check, or they are newly enrolled in Part B in 2010, their premium will be $110.50.


What Medicare Does Not Cover

Ongoing annual physical exams Most Dental careMost Vision careHearing careFoot careMost Long-term careAlternative medicineMost care received outside of the USPersonal care or custodial careMost non- emergency transportation

Note: Medicare private health plans (or Medicaid if you qualify) may cover these services


Medicare Private Health Plans


Medicare private health plans

A person can choose to get their benefits from an insurance company that contracts with Medicare (Part C)Sometimes called Medicare Advantage plansA person still has Medicare if they join a private plan Must provide all Part A and Part B services

But usually have different rules, costs and restrictions for covering those services

May offer extra services (vision, dental, etc.)If a person wants Part D, they must generally get it from the same plan

Part D coverage in a private health plan works the same as it does in a PDP


Private health plan costs

A person with a Medicare Advantage plan must continue to pay the Part B premium.May charge additional monthly premiumUsually charge set copayments (such as $15) for doctors’ visits instead of 20 percent coinsuranceCopayments may be higher for specialty care, like hospitalization, chemotherapy, etc.A person may pay more if they:

Get care outside the plan’s network or service areaDo not ask the plan’s permission to get certain types of care or do not follow plan rules


Types of Medicare private health plans

Three major types of Medicare private health plans: Health Maintenance Organizations (HMO) Preferred Provider Organizations (PPO) Private Fee-For-Service (PFFS) plans

You may also see:Point of Service plans (POS) Provider-Sponsored Organizations (PSO)Special Needs Plans (SNP)Medicare Medical Savings Accounts (MSA)Cost plans

If a person wants Medicare drug coverage, it must generally be included as part of their private health plan

There are a few exceptions.


Part D


Medicare drug coveragePart D

Outpatient drug coverage: Prescription drugs a person can get at a pharmacy or through mail order

Coverage only through private plansAnyone entitled to Medicare is eligible

Each plan has different costs, but must have benefits package at least as good as the “basic plan” outlined in Medicare lawMost plans do not look like the basic plan


Part D Costs

Different costs for different prescriptions at different times1. Deductible Period2. Initial Coverage Period3. Coverage Gap4. Catastrophic Coverage


Part D DeductibleThe amount a person must pay for their drugs before their Part D plan will begin to payDeductibles need to be met each yearAmount typically changes each yearIn 2010 the deductible for a Part D plan can be no more than $310


Part D Initial Coverage PeriodBegins after a person has met their deductibleCosts are shared between the beneficiary and their plan plan Beneficiaries pay a copay or coinsurance How much a person pays varies by drug and by planThe initial coverage period ends in most plans once a beneficiary and their plan together have spent $2,830

How long the initial coverage period lasts depends on drug costs, it is not the same for everyone


Part D Coverage GapCommonly known as the doughnut holeAfter a beneficiary and their plan have paid $2,830 in total drug costs in 2010 the beneficiary may be responsible for the full cost of their drugsSome plans do not have a coverage gap, or cover generics during the cover gapTypically when a person is in the doughnut hole they are responsible for 100% of your drugs


Part D Catastrophic Coverage After a beneficiary has spent a total of $4,550 out-of-pocket in 2010 their costs will decrease significantly

This includes their deductible ($310), what they paid during the initial coverage period, and what they paid during the coverage gap ($3,600)

Once a beneficiary reaches catastrophic coverage they will either pay a 5 percent coinsurance or a copay of $2.50 for covered generic drugs and $6.30 for covered brand-name drugs


Drug costs

Standard (no Extra Help)Deductible $80

Coverage period $20*

Coverage gap $80

Catastrophic coverage

$ 6.30(5% is less)

Brand-name drug A costs $80.

*In this case, the plan has the “basic” shape with 25% copays. Costs can vary by plan.


Medicare Enrollment


Four ways to enroll in Medicare1. Automatic Enrollment2. Initial Enrollment3. Special Enrollment4. General Enrollment


Four ways to enroll in Medicare1. Automatic Enrollment

A person will automatically be mailed a Medicare card for Parts A and B if:

You have enrolled to receive Social Security benefits before you turn 65You have a disability and have been receiving SSDI for at least 24 monthsYou are getting SSDI because you have ALS


Four ways to enroll in Medicare

2. Initial Enrollment If a person is not automatically enrolled:

They can enroll in Parts A, B and D during a 7-month period starting 3 months before their birthday month and ending 3 months after their birthday month

They should enroll 1-3 months before their birthday month to make sure their coverage begins by the time they turn 65



2. Initial Enrollment – cont.

May

June

July

August

September

October

November

Turn 65

IEP Begins

IEP Ends

3 Months

3 Months



3. General Enrollment for Part BIf a person misses their initial or special enrollment periods, they can enroll January-March of each yearCoverage will start July 1May have to pay a 10% Part B premium penalty for the rest of your life for every year they delayed enrollment



4. Special Enrollment (Part B)A person is eligible if either they or their spouse is actively working and receives health coverage from that job

They have special 8-month enrollment period after their employee insurance ends or they stop working

Enroll early to avoid gaps in coverage

A person may want to decline Medicare if they have employer insurance that is primary

Evaluate whether Medicare will provide extra coverage.Not wise to decline Medicare if it is primary


Four ways to enroll in Medicare4. Special Enrollment for Part D

A person may get a Special Enrollment Period (SEP) to join Part D for the first time for various reasons, such as losing drug coverage that is at least as good as Medicare’s (“creditable”)There are many different SEPs to sign up for Part DThe length of a person’s SEP will vary depending on how they had been getting their coverage


Low- Income Programs


Low-Income ProgramsMedicaid

Medicare pays primary, Medicaid pays secondary

Medicare Savings ProgramsPay Part B premium

Extra HelpFederal program that helps pay some or most of the costs of the Medicare drug benefit

Coordinate with Medicare to help pay Medicare costs


Medigaps


What are Medigaps?

Supplemental insurance that can help pay the coinsurances and copays associated with Original MedicareMedigaps may cover:

Deductibles and coinsuranceEmergency care outside the U.S

Can usually only purchase a Medigap during specific enrollment periods


Medigap policiesMedigaps are private health insurance policies that a beneficiary can buy to fill gaps in Medicare coverage.

Only pay for services that Medicare approves.

2 Sets of plans availablePlans purchased between July 31, 1992 and May 31, 2010Plans purchased from June 1, 2010 onward

Types of MedigapsMost cover 100% of servicesMedigaps K-L offer a % of servicesMedigap High deductible


Your rights to buy a Medigap plan Federal law

Right to buy any policy for 6 months beginning the month a person is both 65 or older and enroll in Part BRight to buy any policy within 63 days of losing certain types of coverage

States often have further regulationsIn some states, if a person is under 65, they will not have an open enrollment period until they turn 65.Outside of these times insurance company may be allowed to refuse to sell a person a policy.Some states, such as New York and Connecticut have much broader rights

When a person has the right to buy a Medigap plans cannot:Deny them Medigap coverageCharge them more because of past or present health conditions

Plans are portable. If a person moves, they can take the plan with themMA, MN, WI have their own Medigap systems


Medicare and Health Reform


The Affordable Care Act and Medicare

The Patient Protection and Affordable Care Act of 2010 (P.L. 111-148)

The Health Care and Education Affordability Reconciliation Act of 2010 (P.L. 111-152)

Provisions related to Medicare programPart D Prescription Drug CoverageExpansion of Medicare Covered ServicesThe CLASS ActMedicare Advantage PlansImprovements to Low Income ProgramsAnti-FraudHealth Care Delivery System Reforms


Overview of the Affordable Care ActImprovements to Medicare Part DImproved coordination for Medicare and Medicaid beneficiaries Movement towards an outcome based payment system:

Market basket increases based on productivityDecreased payments for high hospital readmissionsAccountable Care OrganizationsCenter for Medicare and Medicaid Innovation


Financial Health of MedicareCongressional Budget Office

Extension of the Medicare Trust Fund for 12 yearsDecreased payments to Medicare Advantage Plans and providers

Approximately $500 billion in Medicare savings over the next ten years

Cost savings through increased coordination of care for dual eligible beneficiaries to avoid duplicative services or payments and additional anti-fraud measures


The Affordable Care Act and Part D


Closure of the Doughnut Hole2010 a $250 rebate to people with Medicare in the doughnut hole

2011 pharmaceutical manufacturers will provide a 50% discount on brand name drugs and the government will provide a 7% discount on generic drugs.

2014-2020 reduces the out of pocket amount consumers in the doughnut hole must pay in order to qualify for catastrophic drug coverage

Discounts will increase each year until 2020, when the consumer’s share of costs in the gap will be 25 percent for bothbrand-name drugs and generics.

PPACA Sec. 3301, 3315, as modified by HCERA Sec. 1101


New Annual Election PeriodThe Open Enrollment Period (i.e. January 1-March 31) is eliminated starting in 2011

A consumer who enrolls into a Medicare Advantage Plan (MA plan) may return to Original Medicare and a stand alone prescription drug plan (PDP) during the first 45 days of the new year.

In fall 2011 the annual coordinated election period (ACEP) will run from October 15-December 7

PPACA Sec. 3201


Increased Premiums for Beneficiaries with Higher Incomes

Beneficiaries with an increased Part B income-related premium will also pay a Part D income-related premium

Threshold in 2011 $85,000/$170,000 for couplesPremium increase will be based on a percentage of the base beneficiary premium for that year.The base premium will be announced by September 15 and the income threshold by October 15

In 2011 the national base beneficiary premium is $32.34 PPACA Sec. 3308


Uniform appeals processThe Secretary will develop a uniform model form for use in Medicare Advantage plan with a drug plan (MA-PD) and PDP appeals

Applies to appeals filed after January 1, 2012

The process will be accessible through both a toll free telephone line and the Internet

PPACA Sec. 3312


Expansion of Medicare Covered Services


Preventive Services Improvements 2011 eliminates deductibles and coinsurance for preventive services recommended by the U.S. Preventive Services Task Force2011 Annual wellness visit

Six required elementsUpdate the individual’s and family medical historyList individual’s current medical providers and prescriptionsRecord weight, height, BMI, blood pressureDetect any cognitive impairmentEstablish a screening schedule for the next 5-10 yearsFurnish personal health advice and coordinate appropriate referrals and health education

PPACA Sec. 4104 and 4103


The CLASS Act


The Community Living Assistance Services and Supports Act (“CLASS Act”)

The Act establishes a national, voluntary long-term care insurance program for actively employed individuals through a payroll deduction system

Individuals must pay premiums for a minimum of 60 months before becoming eligible for benefits The program will pay a sliding scale cash benefit averaging $50 a day that can be used to purchase typical home and community based long-term care assistance, and other non-medical services

Regulations that spell out the details of the Act will be issued by the Secretary of Health and Human Services (HHS) no later than October 1, 2012

Regulations will include: what the premiums will be for each population group, how people will qualify for and obtain benefits, how decisions can be appealed

PPACA Sec. 8002


Medicare Advantage Plans


Changes to Medicare Advantage Payments

Freeze in payments to MA plans in 2010Changes in the payment scheme for MA plans

Based on a national county benchmarkPaid on a fixed percentage of traditional Medicare costsIncrease in payments (up to 5%) for plans that receive four or more stars on the Center for Medicare and Medicaid Services(CMS) star rating systemRebates for plans that bid below the benchmark will also be reduced

Limitations on MA plan administrative costsMA plans must maintain a medical loss ratio of 85%

HCERA Sec. 1103 & 1102


Benefit ProtectionsIn 2011 MA cost sharing cannot exceed cost sharing under Original Medicare

For chemotherapy administration services, renal dialysis services and skilled nursing care servicesThe Secretary can require that cost sharing for other services not exceed Original Medicare cost-sharing

In 2012 MA plans that receive rebates and offer supplemental benefits must:

Reduce cost-sharing to benefits under Parts A & BProvide meaningful coverage of preventive benefits that are not benefits under Original Medicare (as defined by the Secretary of HHS)Provide meaningful coverage for benefits that are not covered by Original Medicare (e.g. dental coverage and eye exams)

PPACA Sec. 3230, as modified by HCERA Sec. 1102


Improvements to Low Income Programs


Determining the Part D BenchmarkIn 2011 new calculation methodology

Calculated without regard to the reductions for rebates or bonus payments received by MA-PDsRemoves the artificial reduction of the benchmark created by Part D plans which use the bonus payments to reduce enrollee premiumsWill reduce the number of beneficiaries reassigned each year

In 2013 Medicare Part D will also cover benzodiazepines and barbituates used in the treatment of epilepsy, cancer or chronic mental disorders.

PPACA Sec. 3302 & 2502


Changes to SNPsIncreased payments to certain Special Needs Plans (SNPs)

In 2011 Secretary may pay frailty adjusters to SNPs for dual eligibles

Plan must have a contract with the State Medicaid agency to provide all Medicaid services

Contracts with State Medicaid agencies Plans without these contracts will be allowed to operate through December 31, 2012. Plans without these contracts cannot expand beyond their current service area

In 2012 SNPs must be approved by the National Committee for Quality Assurance (NCQA)

PPACA Sec. 3205


Improvements to Coordination Establishing a Federal Coordinated Health Care Office

Provide duals full access to benefits of both programsSimplifying access to servicesImprove qualityEliminating regulatory conflicts Improving continuity of careIncreasing beneficiary understanding of the programsEliminating cost shifting between the two programs Improving provider performance

Support the states in aligning acute and long term care of beneficiariesConsulting and coordinating with the Medicare Payment Advisory Commission (MedPac)

PPACA Sec. 2602


Anti-Fraud Measures


Compliance and Penalties Requires Medicare and Medicaid program providers and suppliers to establish compliance programs. Develops a database to capture and share data across federal and state programs, and increases funding for antifraud activities. Changes effective as of January 1, 2010:

Requires providers, physicians, and suppliers to provide, upon request, documentation for durable medical equipment (DME) and home health referrals Requires physicians to have a face-to-face encounter with the patient before certifying the need for DME or home health services for Medicare or Medicaid Enhances penalties for marketing violations by Medicare Advantage and Part D plans.Increases penalties for submitting false claims

PPACA Sec. 3401, 6407, 6406, 6401, as modified by HCERA 1303, 1304, 10603, 10605


Delivery System and Payment Reform


Independent Payment Advisory Board (IPAB)Appointment and Structure

Will have 15 members including health policy experts, health providers, and consumer representativesMembers serve six year staggered terms

ProposalsIn certain years where Medicare spending growth exceeds targets, the Board will make recommendations to reduce spending by specific targets

Beginning in 2013, required to submit proposals when Medicare growth rate exceeds target set by CMS actuaryFor 2014 through 2018 Required to submit proposals when Medicare growth rate exceed consumer price index (CPI) and consumer price index for medical care (CPI-M)For 2018 and beyond must submit proposals if Medicare growth rate exceeds growth in gross domestic product (GDP) plus 1 percent



Independent Payment Advisory Board (IPAB)

Proposal ParametersThe law prohibits the board from making recommendations related to premiums, cost-sharing, or benefitsIn the first ten years, certain providers are protected from cuts (ex. Hospitals)

Congressional ConsiderationUnless Congress takes action, in years where proposals are required, proposals will automatically take affectCongress can only override proposals if the substitute achieves the same savings target



Center For Medicare and Medicaid Innovation (CMI)

Secretary to establish CMI by 2011Purpose to test delivery and payment modes that reduce spending while preserving or improving quality

Potential areas for demonstrations include:Medical homesChronic Care managementHealth ITIntegrated care for dual eligibleMedication management

Secretary has ability to expand demonstrations ifPrograms reduce spending without reducing quality of careCMS actuary agrees program will reduce net Medicare spending andProgram does not deny or limit coverage



Accountable Care OrganizationsPurpose is to provide care across settings

Include a network of physicians, including primary care doctors and specialists, hospitals, and other providers who coordinate and manage care

Providers who participate in ACOs that meet quality targets and achieve savings to Medicare may share in those cost-savingsTo qualify as an ACO a network must meet specific criteria

Must enter into an agreement with the Secretary for at least three yearsMust have at least 5,000 patientsTo continue participation, ACOs must meet certain quality and spending targets set by the Secretary



Payment BundlingBy 2013, Secretary must establish a 5 year national voluntary pilot program to test bundled paymentsBundled payments will pay for an “entire episode of care”

For hospitalization and 30 day post hospital careIncludes inpatient, outpatient, post-acute, and transitional care services

Entity who receives bundled payment must share it with partners and report on quality measuresBy 2016 the Secretary can expand programs, if among other factors, the CMS Actuary certifies expansion will increase savings without reducing quality of care



Independence at Home DemonstrationDemonstration program beginning in 2012 to test home-based primary care models

Medical Home modelPrimary care physicians and nurse practitioners lead care teams including pharmacists, specialists, and other health and social service providers (ex. Social workers)

Who is eligibleProgram specifically targets high risk individuals with multiplechronic conditions who have experienced recent hospitalization

Providers who participate that meet quality targets may receive incentive payments.Secretary will report to Congress on demonstration and submit plan for expansion by 2016 if program reduces spending without reducing quality of care

PPACA Sec. 3024


Reduced Payments for High Hospital Readmissions

Beginning October 2012 Medicare will reduce payments to hospitals with high readmission rates

Planned readmissions will be excludedTo start, reductions will be linked to three conditions: acute myocardial infarction (i.e. a heart attack), heart failure, and pneumoniaBeginning 2015 the program will cover other conditions identified by MedPAC and the Secretary

Readmission rates for hospitals will be available to the public through the CMS website



Reductions to Market BasketsMarket baskets rates annually adjust Medicare payments for inflation

The law reduces the market basket update for hospitals beginning in 2012 for a productivity adjustment

The law provides that the adjustment could result in a 0% marketbasket

The market basket will also be reduced by .25% for both 2010 and 2011, by .1% in 2012 and 2013, by .3% in 2014, by .2% in 2015 and 2016, and by .75% in 2017, 2018, and 2019.Changes in 2010 rates retroactively went into effect for all discharges on April 1, 2010. 2011 rates take effect on October 1, 2010.

PPACA Sec. 3401 as modified by HCERA Sec. 1105


Case Studies


Case Study 1Mr. D has high blood pressure and takes many different expensive medications. He reaches the coverage gap each year in April and must pay the full cost of his drugs for many months.

He is not eligible for Extra Help and struggles to pay for his prescriptions during the coverage gapHe has had to split her pills and not take the necessary dosage

The closing of the doughnut hole as a result of health reform will help Mr. D pay for his prescriptionsHe received a $250 rebate check this year


Case Study 2Ms. S has Original Medicare. She has a family history of breast cancer and gets a mammogram every year. Even though Medicare covers 80% of the mammogram before she meets her Part B deductible, it is still very expensive for her to get a mammogram each year. The elimination of copays and deductibles for preventive care will help Ms. S get her mammogram without worry about having to forgoing other expenses


Case Study 3Mr. H received a denial from his private plan for a pet scan because he had, had another pet scan too recently. Mr. H sees many doctors and each pet scan was ordered by a different doctor. Mr. H is appealing his caseIncreased discussion among doctors that is promoted by Health Reform might have prevented this situation.


Case Study 4Mrs. J had Original Medicare. She saw many television advertisements for a Medicare private health plan during the Open Enrollment Period this year. She switched her plan in March. In April she went to the doctor and realized that her doctor was not in her plans network and she would have to pay the full cost of the visit herself. Mrs. J cannot change her plan until the ACEP this year. With the new enrollment periods, MA plans will only be marketingprior and during the Fall Open Enrollment Period with the goal of enrolling people during this time (Oct 15- Dec 7). If Mrs. J had enrolled in a plan and she was unhappy she would be able to switch back to Original Medicare during the Annual DisenrollmentPeriod (Jan 1- Feb 15).


For more information on Medicare

Medicare800-MEDICARE (800-633-4227)www.medicare.gov

Medicare Rights Center800-333-4114www.medicarerights.orgwww.medicareinteractive.org

For More information on the Affordable Care Act:

Kaiser Family Foundation www.kff.orgNHeLP www.healthlaw.org

http://www.medicare.gov/

http://www.medicarerights.org/

http://www.medicareinteractive.org/

http://www.kff.org/

http://www.healthlaw.org/


Medicare InteractiveMedicare Interactive

www.medicareinteractive.orgWeb based information system developed by Medicare Rights to be used as a counseling tool to help people with Medicare.

Easy to navigateClear, simple languageAnswers to Medicare questions and questions about related topics, for example:“How does my retiree insurance work with Medicare?”

State-specific information (Find what programs your state offers and their income and asset limits.)

http://www.medicareinteractive.org/

Let’s Learn Medicare · 2015. 9. 9. · Medicare and Medicaid began in 1965 as part of President...

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