Medicare and Medicaid Overview

Overview of Medicare

  • Medicare is a federal health program primarily for individuals aged 65 or older.
  • Certain individuals with specific health conditions may also qualify for Medicare.
  • The Centers for Medicare and Medicaid Services (CMS) is the federal agency responsible for administering and overseeing Medicare.
  • Participants apply for Medicare through the Social Security Administration.

Eligibility for Medicare

  • Primary Eligibility: Individuals aged 65 or older, even if employed.
  • Other Qualifications:
    • Individuals under 65 who have received Social Security benefits for two years.
    • Those diagnosed with End Stage Renal Disease (ESRD) or permanent kidney failure.
    • Individuals diagnosed with Amyotrophic Lateral Sclerosis (ALS), also known as Lou Gehrig's disease.

Parts of Medicare

  • Medicare consists of four parts:
    • Part A: Hospital insurance.
    • Part B: Medical insurance.
    • Part C: Medicare Advantage, which is provided through private health insurance programs.
    • Part D: Prescription drug coverage.

Original Medicare

  • Parts A and B are often referred to collectively as Original Medicare.
  • Part C (Medicare Advantage) expands Original Medicare benefits through private insurance.
  • Part D adds coverage for prescription drugs to standard Medicare coverage.

Enrollment Periods for Medicare

  • There are three types of enrollment periods for Medicare Parts A and B:
    1. Initial Enrollment Period:
    • Measured around the individual’s 65th birthday, covering three months before, the month of, and three months after.
    • Enrollment in Part B is optional during this period.
    1. General Enrollment Period:
    • Runs from January 1 to March 31 each year.
    • Provides an opportunity for individuals to enroll in Parts A or B if they missed the Initial Enrollment Period.
    1. Special Enrollment Period:
    • Available for those eligible for Part B based on age but still covered by an employer's group health plan.
    • Individuals can sign up for Part B any time while covered or within eight months after the plan ends, without penalty.

Consequences of Delaying Part B Enrollment

  • If an individual does not enroll in Part B at first eligibility:
    • The premium for Part B increases by 10% for every 12-month period without coverage.
    • Producers should inform clients of potential premium increases due to delayed enrollment.

Coverage Details of Medicare Parts

Medicare Part A (Hospital Insurance)

  • Covers:
    • Inpatient care in hospitals or skilled nursing facilities,
    • Home health care,
    • Hospice care.
Specific Inpatient Coverage
  • Hospitalization:
    • Covers necessary expenses such as:
    • Semi-private rooms,
    • Meals,
    • Regular nursing services,
    • Lab tests,
    • Medications, and supplies.
    • Time Limits:
    • Up to 90 days a year in a participating hospital.
    • First 60 days covered at 100% after deductible.
    • Days 61 to 90 have a daily co-payment.
    • Beyond 90 days, Medicare provides 60 lifetime reserve days.
  • Important to note that once the 60 lifetime reserve days are used, they cannot be re-gained.
Skilled Nursing Care Coverage
  • Up to 100 days in a skilled nursing facility per benefit period.
  • First 20 days covered at no cost; thereafter, out-of-pocket costs apply.
  • A doctor must certify that skilled daily care is required.
Home Health Care
  • Provides services to those confined at home (unlimited visits).
  • Includes part-time skilled nursing care and various therapies.
Hospice Care
  • For terminally ill patients certified by Medicare.
  • Covers:
    • Doctor and nursing services,
    • Supplies,
    • Short-term inpatient care and counseling.
Blood Coverage
  • Those insured must pay for the first three pints of blood per calendar year; thereafter, Medicare covers medically necessary blood.

Medicare Part B (Medical Insurance)

  • Covers:
    • Doctor services,
    • Outpatient hospital services,
    • Home health visits,
    • Annual wellness visits (no out of pocket cost).
Out-of-Pocket Costs
  • Once the annual deductible is met, Medicare Part B pays 80% of approved charges; the insured pays the remaining 20%.
  • There is no limit to the out-of-pocket expenses under Part B.
Limitations of Coverage
  • Does not cover:
    • Private duty nursing,
    • Skilled nursing home care beyond 100 days per benefit period,
    • Custodial care at home or in nursing homes,
    • Any care outside the United States.
    • Physician charges exceeding Medicare's approved amount.

Medicare Part C (Medicare Advantage)

  • Must have both Parts A and B to be eligible for Part C.
  • Offered through private health insurance programs (HMOs or PPOs).
Coverage Details
  • Covers all services under Original Medicare except:
    • Hospice care and certain qualifying medical research programs.
  • Potential additional coverages may include vision, hearing, dental, and health and wellness programs.
  • Lower out-of-pocket costs compared to Original Medicare often noted.

Medicare Part D (Prescription Drug Coverage)

  • Participation is optional and offered through private insurers.
  • Open to individuals enrolled in Part A or both Parts A and B.
Structure of Coverage
  • Can be offered as a standalone plan or part of a Medicare Advantage plan.
  • Includes a monthly premium and a deductible.
  • After deductible is met, the plan pays for prescription drugs until an initial benefit limit is reached.
  • Beneficiary typically responsible for 25% of drug costs after the limit is met until reaching an out-of-pocket spending threshold.
  • Catastrophic coverage takes over once the spending limit is reached, covering 95% of prescription drug costs thereafter.

Medicare Supplement Plans (Medigap)

  • Designed to fill gaps in Original Medicare coverage (Parts A and B).
  • Offered by private insurance companies.
  • Anyone eligible for Medicare can purchase a Medigap plan after signing up for Part B.
Key Details of Medigap Plans
  • Enrollment is allowed within six months after signing up for Part B.
  • Cannot duplicate Medicare benefits and cannot be used with Medicare Part C co-payments or deductibles.
  • Must be guaranteed renewable, with specific guidelines for cancellation and a 30-day free look period offered.
  • Plans A through N exist, with plans such as C, E, F, H, and J no longer available to new purchasers; however, existing policyholders can retain these.
Core Benefits of Medigap Plan A
  • Core benefits common to all plans include:
    • Part A coinsurance or co-payments,
    • Hospital costs for up to 365 days after Medicare benefits are exhausted,
    • Part A hospice care coinsurance,
    • Part B coinsurance or co-payments,
    • First three pints of blood.

Long Term Care (LTC) Insurance

  • Provides assistance for extended periods, assisting individuals in home or nursing home settings.
  • Benefits can be enacted when individuals cannot perform two or three activities of daily living (ADLs).
Activities of Daily Living (ADLs) Include:
  • Eating,
  • Bathing,
  • Dressing,
  • Continence,
  • Toileting,
  • Transferring (moving in and out of bed or chair).
Long Term Care Policy Conditions
  • Must be guaranteed renewable and cover organic cognitive disorders (e.g., Alzheimer’s disease).
  • It may similarly include inflation protection options.
  • Policies can be standalone, group, or life policy riders.
Elimination and Benefit Periods
  • The elimination period is a deductible period after which the policy begins to pay.
  • Benefit periods must cover at least 12 consecutive months, after which providers may offer tailored terms (e.g., 2 to 6 years or lifetime coverage).
Levels of Care Offered
  1. Skilled Nursing Care: Provided by medical personnel in a hospital or facility.
  2. Intermediate Care: Less frequent care, not requiring nonstop professional supervision.
  3. Custodial Care: Covers personal assistance with daily activities and can be provided by non-professional staff.

Medicaid Overview

  • Medicaid is a collaborative federal and state funded program that provides low-income individuals with health coverage.
  • Eligibility requires meeting income-based poverty level requirements among other criteria.

Key Features of Medicaid

  • Administered at the state level.
  • Coverage includes low-income adults, children, pregnant women, the elderly, and individuals with disabilities.
  • Individuals may qualify for both Medicaid and Medicare.
  • Medicaid serves as the last payer, meaning all other coverage must be exhausted before Medicaid reimbursement occurs.