FAQ

Frequently Asked Questions About Medicare

GENERAL FAQS

WHAT IS MEDICARE?

Medicare is a federally-funded health insurance program. Medicare has four parts: Part A, Part B, Part C and Part D.

HOW DO I ENROLL IN MEDICARE?

If you are aged 65 or older and are not disabled, getting benefits from Social Security or the RRB and have not been awarded SSDI benefits, you will need to contact the Social Security Administration (SSA) office to enroll.

If you are getting Social Security or RRB benefits, have been awarded SSDI benefits or have been diagnosed with ALS, you will be automatically enrolled in Medicare. If you have been diagnosed with ESRD, you will need to contact the SSA to enroll.

HOW DO I BECOME ELIGIBLE FOR MEDICARE?

  • Most people become eligible for Medicare when they turn 65.
  • If you’re awarded Social Security Disability Insurance benefits for something other than Lou Gehrig’s disease (ALS), you will become eligible for Medicare 24 months after the date of entitlement to cash benefits.
  • If you have ALS, you will automatically be eligible for Medicare once you begin getting Social Security Disability Insurance (SSDI).
  • If you have been diagnosed with ESRD or kidney failure, you will be eligible for Medicare three months after starting dialysis. If you choose self-dialysis, then Medicare coverage begins retroactively to the first month of dialysis.

ONCE I’M ELIGIBLE FOR AND ENROLLED IN MEDICARE, WHAT DO I DO?

Once you’re enrolled in Medicare, you’ll have a variety of options to choose from to get complete coverage. You can either choose a single plan to cover all your needs or you can choose a combination of plans. But before you make a decision, you should assess your health and finances and compare these with the Medicare options available to you. Your Medicare options will generally fall under two main categories: Original Medicare (also known as traditional Medicare, which includes Part A and Part B) and Medicare Advantage plans. There also are other specialized Medicare plans available.

WHAT IF MY CIRCUMSTANCES CHANGE?

If you experience certain changes, you should have your Medicare options re-evaluated. Changes include:

  • Moving outside the area your plan covers
  • Traveling more
  • Moving into or out of a long-term-care facility
  • Becoming eligible for low-income subsidy

IS IT NECESSARY TO REVIEW MY MEDICARE ADVANTAGE PLAN EVERY YEAR?

Medicare plan prices and availability change every year. And so might your healthcare needs. So a plan that was relatively inexpensive this year may be more expensive next year. Some plans may be discontinued completely. While it’s not required that you review all your options every year, we strongly recommend that you do so to make sure you’re getting the coverage that is right for you.

DOES BEGINMEDICARE RECOMMEND ONE TYPE OF MEDICARE PLAN OVER ANOTHER?

BeginMedicare understands that no one type of Medicare plan will work for everyone. While one person might find that a Medicare Advantage plan most closely meets their stated needs, a spouse or friend might find that a Medicare Part D plan works better for them. If you would like to learn more about all the Medicare options that may be available to you, including Original Medicare, Medicare Advantage, Part D and Medigap you can contact us at 215-240-1263.

WHAT IS CMS?

CMS stands for Centers for Medicare & Medicaid Services, the agency within the U.S. Department of Health and Human Services that oversees Medicare, Medicaid, the State Children’s Health Insurance Program and other programs.

WHAT ARE MY RIGHTS AND PROTECTIONS UNDER MEDICARE?

No matter what kind of coverage you have, you have the right to:

  • Get a decision regarding coverage and payment of healthcare services
  • Appeal a decision regarding payment and coverage
  • Get emergency and urgently-needed care
  • Get information on covered services and costs
  • File complaints, including quality-of-care complaints
  • Non-discrimination
  • Know treatment options and participate in treatment decisions
  • Privacy and confidentiality

MEDICARE ADVANTAGE

WHAT IS A MEDICARE ADVANTAGE PLAN?

Medicare Advantage plans are health plan options approved by Medicare and administrated by private companies. Some Medicare Advantage plans offer drug coverage.

WHAT TYPES OF MEDICARE ADVANTAGE PLANS ARE AVAILABLE?

  • Health Maintenance Organization Plan (HMO) −Joining an HMO means that to ensure you pay the lowest price possible, you’ll need to see only those providers in your plan’s network unless you need emergency or urgent care. If you regularly see a provider, not in your plan’s network, you’ll need to pay full price for those services on your own.An HMO requires you to have a Primary Care Physician (PCP) who can perform general checkups and evaluations and refer you to other doctors. You may also need to get a prior authorization from the HMO plan, which means that you or your doctor will need to call the plan to get approval before obtaining treatment. If you do not get a referral from your PCP or prior authorization from the plan, you may need to pay full price at the time you’re treated.
  • Preferred Provider Organization Plan (PPO) −If you decide to become a member of a PPO, you can usually go to any doctor or provider in or out of the plan’s network, though your copayments will probably be higher if you see someone outside of the network. You do not have to get a referral from a PCP to see another doctor, but your plan may want you to get prior authorization for certain services.
  • Private Fee for Service Plan (PFFS) −Some PFFS plans have a network while others do not. Generally, you can see any healthcare provider in your plan’s coverage area as long as the provider is eligible to be paid by Medicare and is willing to accept the PFFS plan’s terms of payment. If your PFFS plan has a network, you may pay more to go to the doctor if he or she is out-of-network.It is important to know that a doctor or other healthcare provider may choose not to accept a PFFS plan at any time, even if the provider otherwise participates in Medicare. So, before seeking any non-emergency treatment under a PFFS plan, contact your doctors, hospitals and other healthcare providers to make sure they still agree to accept the PFFS plan.
  • Special Needs Plan (SNP) −A SNP is an HMO specifically developed for beneficiaries who are either institutionalized, eligible for both Medicare and Medicaid, or have certain diseases. Although some SNPs do allow everyone to enroll, many only accept individuals who meet their criteria. If a SNP does not allow you to enroll, you will be instructed to find a different plan that will cover you, such as an HMO, PPO or PFFS.
  • Medical Savings Account (MSA) −MSAs are typically high-deductible plans that also include a bank account to be used only for your healthcare expenses. If you decide to join an MSA, your plan will create an account for you and deposit a certain amount of money that it receives from Medicare. When you go to the doctor or get prescription drugs, you’ll use money from this account to pay for the expenses until you have reached your deductible. Once you reach your deductible, many plans pay up to 100% of your costs for the rest of the year. For every year you are a member, the MSA plan will make a new deposit into the account.

WHAT ARE THE SPECIAL RULES FOR THE VARIOUS MEDICARE ADVANTAGE PLANS?

HMO:

Primary Care:

  • Participants must choose a primary care physician (PCP)
  • Referrals and prior authorization requirements to deal with
  • Generally, participants must get a referral from the PCP to see other physicians
  • Generally, participants must get prior authorization from the plan to see other providers

Network:

  • Must see plan providers in the network except for emergency and urgently-needed care in the plan network
  • If you see a provider outside of the network, you will have to pay the full cost of the service
  • Some plans may offer a travel benefit, which allows for limited coverage out of the area/out of network
  • Some plans may offer a point-of-service (POS) option that allows members to use out-of-network providers for a higher cost

Part D:

  • Usually, has a plan option that covers Part D prescription benefits (called Medicare Advantage prescription drug or MA-PD)
  • If you want drug coverage, it must be purchased through this plan and may not be a free-standing Part

Other Benefits:

  • Vary according to plan

SPECIAL NEEDS PLANS (SNP):

Primary Care

  • You must choose a primary care physician (PCP).
  • Referrals and prior authorization requirements to deal with
  • Generally, you must get a referral from the PCP to see other physicians.
  • Generally, you must get prior authorization from the plan to see other providers.

Network

  • You must see plan providers in the network except for emergency and urgently needed care in the plan network.

Part D

  • Must offer Part D prescription benefits
  • If you want drug coverage, it must be purchased through this plan and may not be a freestanding Part D plan.

Other Benefits

  • Other services may be available.

Enrollment Rules

  • Unlike other Medicare Advantage plans, you may join or leave at any time of the year.
  • You must meet plan specific criteria.

PREFERRED PROVIDER ORGANIZATION (PPO):

Primary Care

  • You do not need to choose a primary care physician (PCP).

Referrals and Prior Authorization

  • You do not need to get a referral from the PCP to see other physicians.
  • You may need to get a prior authorization from the plan to see other providers.

Network

  • You may see providers who are in or out of the network.
  • If you see a provider outside of the network, you will have to pay a higher cost.

Part D

  • Usually, has a plan option that covers Part D prescription benefits (Medicare Advantage-Prescription Drug or MA-PD)
  • If you want drug coverage, it must be purchased through this plan and may not be a freestanding Part D plan.

Other Benefits

  • Other services may be available.

PRIVATE FEE-FOR-SERVICE (PFFS) PLAN:

Primary Care

  • You do not need to choose a primary care physician (PCP).

Referrals and Prior Authorization

  • You do not need to get a referral from the PCP to see other physicians.
  • You do not need to get a prior authorization from the plan to see other providers.

Network

Non-Network PFFS:

  • You can see any Medicare-approved provider if the provider agrees to the plan’s terms and conditions – called “deemed provider."
  • Providers have a choice to accept these terms and conditions.

Limited Network PFFS

  • If certain providers are used, there is lower member cost sharing.
  • If non-network providers are used, non-network PFFS guidelines apply.

Part D

  • May cover Part D prescription benefits
  • If the plan offers prescription drug coverage, it must be purchased through this plan and may not be a free-standing Part D.
  • If Part D is not a plan option (integrated Part D coverage), then you have the opportunity to purchase a freestanding Part D plan.

Other Benefits

  • Other services may be available.

 MEDICARE MEDICAL SAVINGS ACCOUNT (MSA):

Cost

  • High deductible plan with significant cost sharing until deductible is met

Benefits

  • Purchase free-standing prescription plan
  • Purchase high deductible plan with additional benefits

ARE MEDICARE ADVANTAGE PLANS CONSIDERED MEDIGAP PLANS?

No. Medigap plans are purchased to supplement original Medicare. Medigap plans pay for cost-sharing charges. Essentially, these plans “cover the gaps" in Original Medicare coverage.

Medicare Advantage plans actually replace Original Medicare. When a beneficiary opts to enroll in a Medicare Advantage plan, the privately administered plan provides their Medicare coverage. By law, Medicare Advantage plans must cover everything covered under Traditional Medicare Parts A and B. Medicare Advantage plans may also offer additional benefits, (such as dental or vision coverage), and prescription drug coverage.

DO I NEED A MEDIGAP POLICY IF I CHOOSE TO ENROLL IN A MEDICARE ADVANTAGE PLAN?

No. When you enroll in a Medicare Advantage plan, Medigap will not cover Medicare benefits nor any health plan deductibles, coinsurance or co-pays for you.

WHEN CAN I ENROLL IN A MEDICARE ADVANTAGE PLAN?

When first eligible for Medicare at age 65 or after you have been receiving SSDI for 24 months:

  • You can enroll three months before you turn 65, during the month of your 65thbirthday and for three months after and still have your coverage effective on the day you first became eligible (usually the first of the month after your 65th birthday).
  • If you are under 65 and become eligible for Medicare due to disability, you can enroll in Medicare three months before the month of and three months after you have been getting SSDI for 24 months.

Annual enrollment:

  • Each year, from Oct. 15 – Dec. 7, you can change plans, with the change effective Jan. 1 of the following year.

Special enrollment periods (when certain criteria are met):

  • Special enrollment rules allow you to drop, add or change plans under certain circumstances. For example, if you move out of a plan’s service area, have both Medicare and Medicaid, live in an institution as defined by CMS to be a long-term care facility such as a skilled nursing facility (but not an assisted living or residential home), or are a member of a special needs plan (SNP), you can change plans as needed. Also, if you feel you have been misled when you joined a plan, you can request that CMS allow you to change plans, even if it is outside the open enrollment period.

ONCE I ENROLL IN A MEDICARE ADVANTAGE PLAN, WHEN DOES IT BECOME EFFECTIVE?

Your effective date will depend upon which enrollment period applies to you.

  • If you enrolled when you were first eligible for Medicare, your effective date will be retroactive to the date of your eligibility.
  • If you enrolled during a regular annual election period, your effective date will be January 1 of the following year.
  • If you enrolled during the open enrollment period, your effective date will generally be the first day of the month after which the Medicare Advantage organization received your enrollment form.
  • If you enrolled during a special enrollment period, your effective date may vary depending upon your circumstances.

If you choose to enroll in a Medicare Advantage organization, you should ask them when your effective date will be.

DO MEDICARE ADVANTAGE PLANS COVER EMERGENCY OR URGENTLY NEEDED CARE?

Yes, all plans must cover all Medicare Parts A and B services, including emergency and urgently needed care.

WHICH MEDICARE ADVANTAGE PLANS DO NOT OFFER PRESCRIPTION DRUG COVERAGE?

Some plans, such as Medicare medical savings accounts and certain Medicare private fee-for-service (PFFS) plans, do not offer prescription drug coverage. Because the Medicare Advantage plans are administrated by private companies, they vary widely Check out Quote tool to compare different plans that are available.

WHAT HAPPENS IF THE MEDICARE ADVANTAGE PLAN SELECTED DOES NOT OFFER PRESCRIPTION DRUG COVERAGE?

If a Medicare Advantage plan does not offer drug coverage, you may be able to join a Medicare prescription drug plan (Part D).

DOES EVERYONE PAY THE SAME AMOUNT FOR MEDICARE ADVANTAGE PLAN MEMBERSHIP?

The only exception is those members with Medicare and Medicaid who may be able to pay less or those who are eligible for low-income subsidy (LIS).

DOES EVERYONE PAY THE SAME AMOUNT FOR MEDICARE ADVANTAGE PLAN MEMBERSHIP?

The only exception is those members with Medicare and Medicaid who may be able to pay less or those who are eligible for low-income subsidy (LIS).

WHEN CAN YOU JOIN, SWITCH OR DROP A MEDICARE ADVANTAGE PLAN?

You can join, switch or drop a Medicare Advantage plan:

  • When you first become eligible for Medicare (three months before you turn 65 and up to three months after the month you turn age 65).
  • If you get Medicare due to a disability, you can join during the three months before and up to three months after your 25thmonth of entitlement to cash disability benefits.
  • From Oct. 15 – Dec. 7 of each year. Your coverage will begin on Jan. 1 of the following year.
  • In certain situations, you may be able to join, switch or drop Medicare Advantage plans at other times (like if you move out of the service area, have both Medicare and Medicaid or live in an institution).

WHAT IS NOT COVERED BY PART A AND PART B?

  • Acupuncture
  • Chiropractic services, except to correct a subluxation (when one or more of the bones in the spine move out of position) using manipulation of the spine
  • Cosmetic surgery
  • Custodial care (like help with bathing or using the bathroom) except when you also get skilled nursing care in a skilled nursing facility, at home or in a hospice
  • Deductibles, coinsurance or co-payments for certain health care services
  • Dental care and dentures
  • Eye care, eye exams (except for people with diabetes to check for diabetic retinopathy), eye refractions and eyeglasses (except after cataract surgery that implants an intraocular lens)
  • Foot care (routine), such as cutting corns or calluses
  • Hearing aids and exams for the purpose of fitting a hearing aid
  • Hearing tests that haven’t been ordered by a doctor
  • Certain laboratory tests
  • Long-term care for custodial care in a nursing home
  • Orthopedic shoes
  • Prescription drugs
  • Syringes or insulin, unless the insulin is used with an insulin pump, but it may be covered by Medicare prescription drug coverage (Part D)
  • Healthcare while traveling outside the United States except when you travel on the most direct route through Canada between Alaska and another state. Medicare also covers hospital, ambulance and doctor services if you are in the U.S., but the nearest hospital that can treat you isn’t in the United States. The “United States" includes the 50 states, the District of Columbia, Puerto Rico, the Virgin Islands, Guam, the Northern Mariana Islands and American Samoa. In some limited cases, Medicare may pay for services you get while on board a ship within the territorial waters adjoining the land areas of the United States

WHO CAN JOIN A MEDICARE ADVANTAGE PLAN?

In order to join a Medicare Advantage plan, you must have Medicare Parts A and B and live in the plan service area at least six months of the year.

MEDICARE PART A (HOSPITAL)

WHAT DOES MEDICARE PART A COVER?

Medicare Part A is hospital insurance and helps cover inpatient care in hospitals. Part A also helps cover skilled nursing facilities, hospice and home healthcare if certain conditions are met.

WHEN CAN I SIGN UP FOR PART A?

If you get benefits from Social Security or the Railroad Retirement Board, you will automatically get Part A on the first day of the month you turn age 65. If you are under age 65 and disabled, you will automatically get Part A after you get disability benefits from Social Security or Railroad Retirement Benefits for 24 months.

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MEDICARE PART B (MEDICAL)

WHAT DOES MEDICARE PART B COVER?

Medicare Part B is medical insurance and helps cover medically-necessary services such as doctors’ visits and outpatient care. Part B also covers many preventative services, such as flu shots, mammograms and Pap tests.

WHEN CAN I SIGN UP FOR PART B?

If you get benefits from Social Security or the Railroad Retirement Board, you will automatically get Part B on the first day of the month you turn age 65. If you are under age 65 and disabled, you will automatically get Part B after you get disability benefits from Social Security or Railroad Retirement Benefits for 24 months.

If you didn’t sign up for Part B when you first became eligible, you may be able to sign up during one of these times:

  • General Enrollment Period: From January 1 through March 31 each year
  • Special Enrollment Period: If you waited to sign up for Part B because you or your spouse are working and have group health coverage based on that work or if you are disabled and you or a family member are working and have group health plan coverage based on that work

IS THERE A PENALTY FOR NOT SIGNING UP FOR PART B AS SOON AS I BECOME ELIGIBLE?

You may have to pay a late-enrollment penalty for not signing up for Part B benefits as soon as you became eligible. The premium may go up 10 percent for each full 12-month period that you could have had Part B but didn’t sign up for it.

WHAT IS THE FEE FOR PART B BENEFITS?

The fee for Part B benefits varies according to income. The table below shows the 2015 Part B premiums.           

If Your Annual Income is…
File Individual Tax Return File Joint Tax Return You Pay
$85,000 or below $170,000 or below $104.90*
$85,001 – $107,000 $170,001 – $214,000 $146.90*
$107,001 – $160,000 $214,001 – $320,000 $209.80*
$160,001 – $214,000 $320,001 – $428,000 $272.70*
Above $214,000 Above $428,000 $335.70*

MEDICARE PART C

WHAT DOES MEDICARE PART C COVER?

Medicare Part C (also called Medicare Advantage) is another way to get Medicare benefits. Medicare Part C combines Part A, Part B and, sometimes, Part D (prescription drug coverage).

WHAT IS MEDICARE PART C?

Medicare Part C is medical and hospital insurance. It includes everything that Medicare Parts A and B includes and often also provides prescription drug coverage under Part D and other benefits such as vision and dental coverage. Medicare Part C is also known as Medicare Advantage and is offered by private companies.

WHO IS ELIGIBLE FOR MEDICARE ADVANTAGE?

In general, most people who are eligible for Medicare Part A or Medicare Part B can enroll in a Medicare Advantage plan. However, people with certain disabilities or End Stage Renal Disease (ESRD) may not be able to participate in Medicare Advantage and may need to use Original Medicare instead.

IF I JOIN A MEDICARE ADVANTAGE PLAN, DO I STILL NEED TO PAY A PART B PREMIUM?

Yes, you will still need to pay your Part B premium to Medicare. Most Medicare Advantage plans also charge a fee over and above what Medicare Part B charges because they provide extra coverage, such as prescription drug coverage, dental and vision.

MEDICARE PART D

WHAT DOES MEDICARE PART D COVER?

Medicare Part D helps cover prescription drugs.

ARE ALL DRUGS COVERED UNDER MEDICARE PART D?

No. Although most prescription drugs are covered under Medicare Part D, there are certain medications, such as those administered in a doctor’s office, that are covered under Medicare Part B. If you’re interested in Part D coverage, you should contact the plan administrator to see if the drugs you take are covered.

WHO IS ELIGIBLE FOR MEDICARE PART D?

If you are entitled to Medicare Part A or are enrolled in Part B, you can get prescription drug coverage under Medicare Part D.

HOW DO I PURCHASE PART D BENEFITS?

Part D benefits can be purchased in two different ways. You have a choice of private drug plans that are either integrated with medical coverage (Medicare Advantage-Prescription Drug or MA-PD) or offered as a stand-alone prescription drug plan (PDP). Which one you are eligible to purchase can depend on how you are receiving your Medicare Part A and Part B benefits. 

A stand-alone Medicare prescription drug plan (PDP) can be purchased to add coverage to Original Medicare, some Medicare private fee-for-service (PFFS) plans that do not offer integrated Medicare prescription drug coverage, some Medicare cost plans and Medicare medical savings account plans.

Most Medicare Advantage Plans (like an HMO or PPO) and other Medicare health plans include integrated coverage for prescription drugs. You then get all your healthcare and prescription drug coverage through one plan.

HOW MUCH WILL I PAY FOR MEDICARE PART D?

If you decide to get a stand-alone Medicare Part D plan, you will pay a monthly premium. Premiums differ from plan to plan. You should be aware that individuals with higher incomes will pay more for Medicare Part D. If you have to pay more for Medicare Part D, Social Security will deduct the extra amount from your Social Security check. Following is a table that provides you information on how much you will be charged if you have to pay extra for Medicare Part D in 2015. This charge will be in addition to what you pay for your Medicare Part D premium:

If your annual income is… Add the following amount to your Part D premium:
File Individual Tax Return File Joint Tax Return  
$85,000 or below $170,000 or below Your plan premium
More than $85,000 up to $107,000 More than $170,000 up to $214,000 Your plan premium + $12.30
More than $107,000 up to $160,000 More than $214,000 up to $320,000 Your plan premium + $31.80
More than $160,000 up to $214,000 More than $320,000 up to $428,000 Your plan premium + $51.30
More than $214,000 More than $428,000 Your plan premium + $70.80

WHAT IS THE DONUT HOLE OR COVERAGE GAP?

Some Medicare drug plans have a coverage gap, often called a “donut hole." Historically, this has meant that after you have spent a certain amount of money for covered drugs, you have to pay all costs for drugs until you’ve paid a total of $4,700 out of pocket, after which you’ll fall into catastrophic coverage where your plan will pick up most of the cost of your drugs. Starting in 2015, help will be available for people falling into the donut hole – if you reach the donut hole, you’ll get a 55 percent discount on brand-name drugs and a 35 percent discount on generics until you’ve reached catastrophic coverage. The discount will not affect how quickly you go through the donut hole; in other words, if you get the discount, that won’t mean that you’ll be in the donut hole longer.

WHAT DO I NEED TO KNOW ABOUT JOINING A MEDICARE PRESCRIPTION DRUG PLAN?

ELIGIBILITY

To join a drug plan, you must be entitled to Medicare Part A or have Medicare Part B and live in the service area of the plan. Drug plans offer their benefit options in specific service areas. Beneficiaries are eligible to purchase only plans offered in the area where they reside.

ENROLLMENT PERIODS

You are eligible to enroll in a Medicare drug plan only during certain time periods depending on your situation:

  • Initial Enrollment Period (IEP)takes place when you first become eligible for Medicare. You can join starting three months before the month you turn age 65 through three months after the month of your 65th If you join during the three months before turning age 65, coverage begins the first day of the month of your 65th birthday. If you join the month of your 65th birthday or during the three months after, coverage is effective the first day of the month after the month joined. Disabled beneficiaries can generally join three months before and three months after the 25th month of disability benefits.
  • Annual Open Enrollment Period (AEP)runs each year from Oct. 15 – Dec. 7. During this period, you may change prescription drug plans, add a drug benefit or switch plans. If you join during this time, the coverage is effective Jan. 1 of the following year.
  • Special Enrollment Periods (SEPs)are periods outside of the enrollment periods listed above where members of Part D plans can enroll or disenroll from the plan. SEPs can only be used in certain circumstances, and members need to work with their plan or Medicare to get one. For example, if during the year a member feels that their plan has misled them about their coverage or has provided them with sub-par service, they may be able to request a SEP to disenroll from their current plan and enroll in a new one. Or, if a member moves out of their plan’s service area, they can ask to be disenrolled from the plan and enroll in a new one that is in their service area. The Centers for Medicare & Medicaid Services (CMS) and the plan have the authority to create SEPs in exceptional circumstances.

WHAT IS THE LATE ENROLLMENT PENALTY FOR PART D?

If you do not join a drug plan when first eligible, you may have to pay a penalty for enrolling later. This means that you may pay a higher premium for as long as you have Medicare drug coverage.

In most cases, you will pay a penalty if you:

  • do not join when first eligible for Medicare,and
  • do not have creditable prescription drug coverage, or other prescription drug coverage that is, on average, at least as good as standard Medicare prescription drug coverage

To estimate the penalty, take one percent of the national average benchmark premium for the coverage year. The national average benchmark premium for 2015 is $33.13.

Multiply it by the number of full months that you were eligible to join a Medicare drug plan and weren’t enrolled in one. The answer is the penalty amount. This penalty amount is added to the monthly premium of whichever Medicare drug plan you join for as long as you are in the plan. The penalty is recalculated each year there is a change in the national average premium. If you have to pay a penalty, the Medicare drug plan you joined will tell you the amount that must be paid.

If you are told that you need to pay a penalty but disagree with the plan, you can request that the plan reconsider the late enrollment penalty. To do so, you should contact your plan and they will provide you with the appropriate forms and instructions.

WHAT DRUGS ARE COVERED BY MEDICARE?

MEDICARE PARTS A AND B-COVERED DRUGS

Traditional Medicare (Parts A/B) does not cover most outpatient prescription drugs. Medicare Part A bundled payments made to hospitals and skilled nursing facilities generally cover all drugs during an inpatient stay. Medicare Part B makes payments to physicians for drugs or biologicals that are not usually self-administered. Part D does not generally cover drugs that fall under Part A/B.

PART D-COVERED DRUGS

A covered Part D drug includes prescription drugs, biological products, insulin and certain vaccines. The definition also includes “medical supplies associated with the injection of insulin (as defined in regulations of the secretary)." These medical supplies include syringes, needles, alcohol swabs and gauze.

OVER-THE-COUNTER PRODUCTS (OTCS)

The definition of the Part D drug coverage does not include OTCs. Therefore, Part D plans cannot include OTCs in their drug benefit or supplemental coverage.

NOT COVERED

By law, there are certain types of drugs that Medicare must exclude from Part D. These include drugs used for anorexia, weight loss or weight gain; fertility drugs; drugs used for cosmetic purposes or hair growth; cough and cold medicines; prescription vitamins and minerals and over-the-counter drugs.

WHAT ARE THE DRUG COVERAGE REGULATIONS FOR PART D PLANS?

Medicare drug plans must cover prescription drugs in all prescribed categories and classes, but Medicare drug plans do not have to cover every drug in a given class or category.

CAN A PART D PLAN STOP PAYING FOR MY MEDICATION?

Yes, but there are specific regulations the plan must follow. Prior to removing a covered Part D drug from its Part D plan’s formulary, or making any change in the preferred or tiered cost-sharing status of a covered Part D drug, a Part D plan must either:

  • Provide direct written notice to affected enrollees at least 60 days prior to the date the change becomes effective; or
  • At the time an affected enrollee requests a refill of the Part D drug, provide such enrollees with a 60-day supply of the Part D drug under the same terms as previously allowed and written notice of the formulary change.

If the Federal Drug Administration (FDA) has decided that a drug is unsafe, the plan must remove the drug from its formulary immediately and notify members as soon as possible, but within no less than three days of the drug’s removal from the formulary.

COST SHARING

WHAT IS COST SHARING?

The term cost sharing refers to the costs participants will pay in addition to what Medicare pays for medical services.

WHAT IS CO-INSURANCE?

Co-insurance is an amount you may be required to pay for services after you pay any plan deductible. Co-insurance is usually a percentage of the total cost of the service. In the original Medicare plan, this is a percentage (like 20 percent) of the Medicare-approved amount. You have to pay this amount after you pay the Part A and/or Part B deductible.

WHAT IS A COPAYMENT?

A copayment is a flat fee you pay in some Medicare health and prescription drug plans for each medical service, like a doctor’s visit, or prescription. Copayments may be different for services or prescriptions that are more expensive. For example, you may pay $10 to see your regular doctor, while your plan may require you to pay a $20 copayment to see a specialist such as a cardiologist or neurologist.

WHAT IS A DEDUCTIBLE?

The deductible is the amount you must pay for healthcare or prescriptions before the original Medicare plan, your prescription drug plan or other insurance begins to pay. For example, in the original Medicare plan, you pay a new deductible for each benefit period for Part A and each year for Part B. These amounts can change every year.

LOW INCOME SUBSIDY

WHAT IS EXTRA HELP OR LOW INCOME SUBSIDY?

Extra Help or Low Income Subsidy (LIS) refers to the program offered through Medicare that assists qualified beneficiaries with Part D premiums and overall drug costs. You must meet certain criteria to qualify for LIS. In 2015, you may qualify if you have up to $17,508 in annual income ($23,592 for a married couple) and up to $13,440 in resources ($26,860 for a married couple). The cost sharing amount for LIS depends on income and resources, but most people who qualify will pay no premiums, no deductibles and no more than $2.65 for generics and $6.60 for brand name prescriptions in 2015.

HOW DOES A MEDICARE BENEFICIARY AUTOMATICALLY QUALIFY FOR LIS?

Certain Medicare beneficiaries will automatically qualify for the Extra Help (LIS) and don’t need to apply in the following circumstances:

  • If you have full coverage from a state Medicaid program. Medicaid no longer pays for most prescription drugs for people with Medicare.
  • If you get help from Medicaid paying Medicare premiums (belong to a Medicare Savings Program).
  • If you receive Supplemental Security Income (SSI) benefits.

HOW DOES MEDICARE NOTIFY BENEFICIARIES THAT THEY QUALIFY FOR LIS?

CMS mails letters to beneficiaries to notify them of their LIS qualification.

YELLOW LETTER

When you have Medicare and Medicaid, CMS mails a letter on yellow paper to you as notification that Medicare is covering your prescriptions instead of Medicaid. The letter provides the name of the plan Medicare is enrolling you in and the date your coverage begins.

GREEN LETTER

Beneficiaries who get help from their state to pay Medicare premiums (Medicare Savings Program), get Supplemental Security Income (SSI) benefits, or applied and qualified for the extra help, receive a letter from CMS on green paper. The letter provides the name of the plan Medicare has chosen for you and the date coverage begins.

WHAT IF THE DRUG PLAN MEDICARE SIGNS ME UP FOR DOESN'T MEET MY NEEDS?

If you’re not happy with the plan Medicare assigns you to, you may be eligible for a SEP. You also can make changes to your coverage during the annual enrollment period from Oct. 15 – Dec. 7 each year.

WHAT ARE THE ELIGIBILITY QUALIFICATIONS FOR LIS?

In determining your eligibility for LIS, both income and resources are counted. If you are married and living with a spouse, both of your incomes and resources are counted – even if only one is applying for Extra Help. If you are married, but not living with the spouse when applying, only your income and resources are counted.

WHAT INCOME COUNTS FOR LIS?

Income is any cash, goods or services that can be used to meet needs for food or shelter. Examples include, but aren’t limited to, the following:

Income counted:

  • Wages
  • Earnings from self-employment
  • Social Security benefits
  • Railroad Retirement benefits
  • Veterans benefits
  • Pensions
  • Ann uities
  • Alimony
  • Rental income
  • Workers’ compensation

Income not counted:

  • Income tax refunds
  • Assistance based on need, funded by a state or local government
  • Foster care payments
  • The value of expenses that a blind or disabled person needs to work

WHAT RESOURCES COUNT TOWARD LIS?

Resources include cash and other things that normally can be converted to cash within 20 workdays. Examples include, but aren’t limited to the following:

RESOURCES COUNTED:

  • Accounts at financial institutions (such as savings; checking; money market; time deposits or certificates of deposit; and retirement, such as individual retirement accounts (IRA) or 401(k) accounts)
  • Stocks
  • Bonds
  • The value of property that isn’t connected to the home

RESOURCES NOT COUNTED:

  • Life insurance policies owned with a combined face value of $1,500 or less ($3,000 or less for applicant and spouse)
  • The home you live in and the land it’s on
  • Resources such as family heirlooms and wedding/engagement rings
  • Property of a trade or business that is essential to means of self-support
  • Funds received and saved to pay for medical and/or social services

VETERANS

AM I ELIGIBLE FOR VA HEALTHCARE COVERAGE?

It depends. If you have served on active duty in the armed forces and meet certain criteria, you may apply for VA healthcare coverage. Eligibility criteria include:

  • Length of service
  • Service-connected disabilities
  • Income level
  • Available VA resources

If the VA determines that you qualify for healthcare coverage, you will be assigned a priority level based on a scale of 1 to 8-1 being the highest priority and 8 being the lowest.

For example, if you are considered a priority level 8, you will get far less coverage and slower access to care than if you were a priority level 1 or 2. In general, the more you need healthcare coverage due to a combination of service-related disability and low income, the more coverage you will get from the VA.

For more information on eligibility and coverage or to apply for veterans health benefits, visit www.va.gov/healthbenefits.

WHAT ARE PRIORITY LEVELS, AND HOW DO THEY AFFECT VA HEALTHCARE COVERAGE?

Priority levels are an important part of VA coverage. Your priority level determines what type of health benefits you will receive. It also may determine when you will be scheduled for medical care or, if necessary, your placement in a VA long-term care facility.

WHAT TYPE OF BENEFITS DOES MY VA COVERAGE OFFER?

If you qualify for VA health benefits, regardless of what priority level you are, you will get the VA’s Uniform Benefit Package, which includes:

  • Preventive care and services
  • Adult day care
  • Dental coverage
  • Inpatient hospital care
  • Ambulatory services
  • Emergency care
  • Home health care
  • Prescription drug coverage
  • Durable medical equipment
  • Prosthetics
  • Orthodontics
  • Diagnostic services
  • Rehabilitation care
  • Mental healthcare
  • Substance abuse services
  • Assisted living
  • Nursing home care
  • Respite care
  • Hospice care

IF I HAVE VA HEALTH COVERAGE, SHOULD I ALSO HAVE TRADITIONAL MEDICARE (PARTS A AND B)?

Generally, yes. The VA usually suggests that you take Medicare Part A, which covers hospital care, and Part B, which covers medical services, if you are eligible. While there is some cost associated with Part B ($104.90 a month for most people in 2015), there are definite benefits to having Medicare. These include greater flexibility in healthcare options and greater overall cost savings. This is important if your VA health coverage gets reduced or denied at any point.

Funding for VA benefits and the priority groups is set by Congress each year and can be unpredictable. So you don’t want to suddenly find yourself having to make up unexpected, increased out-of-pocket medical costs, especially if you are in one of the lower-priority veterans groups.

CAN I HAVE VA HEALTH COVERAGE AND MEDICARE AT THE SAME TIME?

Yes. If you have VA coverage, you automatically get Medicare Parts A and B when you become eligible for Medicare due to age or disability. When your date of eligibility approaches, you will receive a notice and an ID card from Social Security. You will also receive information about your Part B premium, which is deducted from your monthly Social Security check unless you choose to pay your premiums in some other way. If you are eligible for Medicare Part B, but decided not take it, you will have to pay a penalty later if you change your mind and add it to your Medicare coverage.

The penalty can be substantial as it adds an extra 10 percent to your monthly Part B premium ($104.90 per month for most people in 2015) for each full 12-month period that you could have had Part B but didn’t sign up for it. Plus, you will have to wait until the general enrollment period to sign up. This period lasts from January 1- March 31 each year, and coverage does not begin until July 1. 

There are exceptions to the Part B enrollment penalty. The most common exception is having comparable coverage through a spouse’s employer, which can allow you to delay your enrollment in Part B until after you lose that coverage.

It is important to note that being part of the VA healthcare system is considered creditable coverage as far as Medicare Part D prescription drug coverage, so you don’t have to worry about facing a late-enrollment penalty if you don’t sign up for it right away.

CAN VA HEALTH COVERAGE WORK WITH MEDICARE?

The two plans are separate and seldom coordinate payments to give you extra cost savings. In other words, if you get care at a non-VA facility, Medicare generally pays the bills, unless you have received prior authorization from the VA. There are exceptions, of course. For example, an emergency may require you to go to the nearest medical provider which is a non-VA facility. In this case, the VA may pick up some of the cost until you can be moved to a VA facility for further care.

However, Medicare can still provide you with more options for care than VA health benefits Also, it can provide a secondary source of coverage if VA funding or facilities get scaled back.

CAN THE VA CHARGE MEDICARE FOR MY MEDICAL CARE OR PRESCRIPTION DRUGS AND VICE VERSA?

No. The VA and Medicare do not coordinate benefits. This means that if you have a Medicare-approved outpatient procedure completed at a non-VA facility, only Medicare will cover that procedure. In addition, Medicare may not cover the full cost of the procedure, so you may have out-of-pocket costs.

IF I HAVE VA HEALTH BENEFITS, SHOULD I GET MEDICARE PART D?

That is a personal decision depending on your needs and budget. The VA package offers prescription drug coverage, and Medicare offers the same, which is known as Part D. If you get a Medicare Part D plan, generally, you will need to pay monthly premiums to keep it. Your costs may be less if you purchase a Medicare Advantage plan that includes prescription drug coverage.

The drug coverage you receive through the VA is considered as good as or better than that offered under a Part D plan and is premium-free, so you may not need both. However, you will be required to fill your prescriptions at a VA-approved pharmacy or by the Consolidated Mail Outpatient Pharmacy Program (CMOP). If you decide later you want a Medicare Part D plan for whatever reason, you are allowed to enroll in one without penalty.

IF I HAVE VA HEALTH BENEFITS, DO I NEED MEDICARE ADVANTAGE?

Not necessarily. If you have VA benefits, but need medical services that the VA does not cover, you can simply use your Original Medicare benefits at the time of service. However, if you would like to have a Medicare Advantage plan, you can enroll in one. Medicare Advantage plans typically combine coverage provided by Medicare Parts A and B, and may include additional benefits and services. Some people find that having Medicare Advantage works best for them, even if they already have VA benefits.

WHAT ARE THE PROS AND CONS OF VA HEALTH COVERAGE?

Pros:

  • It’s free or low cost
  • You can receive care at any VA facility
  • If you are very sick and/or have extremely low income, you receive first priority
  • It offers creditable prescription drug coverage, so you don’t have to purchase a Medicare Part D plan or Medicare Advantage plan with Part D

Cons:

  • Care is prioritized based on who is most sick and/or has the lowest income
  • Some VA facilities have very long wait times for necessary procedures
  • You can only see VA doctors/go to VA facilities or approved non-VA facilities
  • Any prescriptions you fill must be filled at a VA pharmacy

WHAT ARE THE PROS AND CONS FOR HAVING MEDICARE AND VA COVERAGE AT THE SAME TIME?

Pros:

  • You can get care from both VA and non-VA-approved healthcare providers
  • You can have Original Medicare and coverage as good as Medicare Part D without having to pay for a stand-alone Part D plan
  • If you want medical care now, but there’s a waiting period at the VA, you can find a Medicare provider to see you sooner

Cons:

  • You have to pay your Medicare Part B premium every month
  • Some people may be confused about when to use a VA facility versus a non-VA provider that accepts Medicare
  • You may have an extra Part D premium, if you choose added coverage
  • You may face Medicare Part B late-enrollment penalties if you improperly handle your Medicare enrollment and deferral choices

IF I HAVE VA HEALTH COVERAGE AND MEDICARE, WHEN SHOULD I USE VA BENEFITS VS. MY MEDICARE BENEFITS?

It depends. Every VA office operates differently, and one facility may provide a different quality of care than another. Also, some facilities may have shorter wait times than others for access to specialists, certain medical procedures and more.

Since your VA coverage is free, if you are high on the priority list and there isn’t a long wait to get care, it may be wise to use your VA coverage instead of Medicare. VA coverage may be preferred, especially if you need inpatient hospital care or prescription drugs, because you are getting low- or no-cost health benefits in a timely manner.

However, if you face a long wait time for medical care (for example, you need to see a physical therapist or have an operation, but the VA waiting list is several months long), you might want to consider using your Medicare coverage outside the VA healthcare system. The same applies if you want to undergo a medical procedure or take a prescription drug that is not approved by the VA.

Because your healthcare situation is unique, you should carefully consider both your financial and healthcare needs when choosing what healthcare coverage will work best for you.

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