Posted by Teresa Iafolla
As a telemedicine company, we know that navigating issues around telemedicine policy and reimbursement can be tricky. Afterall, your job as a provider isn’t to be an expert on telemedicine rules – it’s to provide the very best care to your patients.
And that’s where we want to keep your focus. Leave the telemedicine reimbursement research to us.
So for this first piece in our telemedicine reimbursement blog series, I’ll cover the basics when it comes to Medicare and telemedicine. What are the current Medicare guidelines for telemedicine? What medical procedures can be done via telemedicine? How does billing work? Which providers and patients are eligible?
I’ll walk you through answers to these common questions and more. The bottom line on Medicare and telemedicine is – Medicare is reimbursing for more telemedicine services now than ever, and CMS is consistently adding more eligible CPT codes every year. The tide is turning based on popular demand and studies showing the cost-savings of telemedicine. That’s good news for everyone!
Ready to dive in? Here’s what you need to know about Medicare and telemedicine.
What is an Originating Site and a Distant Site?
If you’ve been reading up on Medicare and telemedicine, you’ve probably seen the terms “Originating Site” and “Distant Site.” The Originating site refers to the location of the Medicare beneficiary (the patient) and the Distant Site refers to the location of the eligible healthcare provider.
Does the patient’s location at the time of telemedicine service affect Medicare coverage?
Yes. While there are no restrictions on the Distant Site, the Originating Site has to meet these conditions:
- It has to be located within a Health Professional Shortage Area (HPSA)
- It must be one of the following types of health facilities:
- Physicians or practitioner offices
- Critical Access Hospitals (CAH)
- Rural Health Clinics
- Federally Qualified Health Centers
- Hospital-based or CAH-based Renal Dialysis Centers
- Skilled Nursing Facilities (SNF)
- Community Mental Health Centers (CMHC)
In other words, your patient needs to be at health facility that falls into one of those categories and is located in a health professional shortage area for the telemedicine service to be covered under Medicare.
How do I find out if the Originating site/location of my patient is in a HPSA?
Luckily this part’s easy. To see if the health facility is in a HPSA, type in their address to this CMS tool.
What is a facility fee and how do I bill for it?
Medicare not only reimburses for the actual telemedicine service, but will also pay the originating site a facility fee for hosting the patient. For instance, if you have a patient in your office and you host a telemedicine visit with a physician in another location, you could bill for the facility fee. Lookup HCPCS code Q3014 for the full details on facility fees.
What type of telemedicine does Medicare cover?
In almost all cases, Medicare only reimburses for live telemedicine – in other words, a real-time videochat between a physician and patient. The idea is to model a face-to-face visit as closely as possible. Medicare also reimburses for store-and-forward telemedicine services, but only in Hawaii and Alaska.
What medical procedures are eligible for telemedicine reimbursement under Medicare?
For a full list of the eligible medical procedures and their CPT codes, see pages 3-4 of this handout from the Medicare Learning Network.
What healthcare providers can practice and bill for telemedicine services under Medicare?
According to Medicare guidelines, the following healthcare providers are eligible:
- Nurse Practitioners
- Physician Assistants
- Nurse Midwives
- Clinical nurse specialists
- Clinical Psychologists
- Clinical Social Workers
- Registered dietitians or nutrition professionals
How do I bill for telemedicine under Medicare?
There are a few points to remember here. First, reference this handout from the Medicare Learning Network for a full list of eligible procedures and their CPT/HCPCS codes. When billing, you’ll need to use one of those codes, along with the “GT” modifier to note that the procedure took place virtually.
Will Medicare reimburse me at the same rates as an in-person visit?
Yes! The health professional delivering the telemedicine service will be reimbursed at the current fee schedule rate for the comparable in-person medical service.
When it comes to moving, many people create a checklist to stay organized in the process. As a Medicare beneficiary, one thing you will need to add to your checklist is “Updating Medicare”.
This is not as simple as it may seem as not all parts of Medicare are transferable between states. For example, Medicare Advantage (Part C) and Medicare Part D drug plans are offered based on the residential area in which you live.
When you move out of that area, you need to notify your Medicare Plan providers. It’s important to notify the right parties within the allotted timeframe so you don’t accidentally end up with a lapse in coverage.
If you enrolled in a Medicare supplement, your policy may also change in price depending on where you move to.
Timeline for Notifying Your Medicare Plan Providers
Whenever you have Medicare and you move to another state, you have a Special Election Period that you can use to change your Part D drug plan and/or your Medicare Advantage plan (if you are enrolled in one).
If you notify your Medicare Plan provider of the change before you actually move, your opportunity to switch will begin one month prior to your move date and will continue for two months after the month of which you move. See Figure A.
Figure A: Before You Move
If you wait until after you move to notify your plan, your chance to switch will begin the month you informed your plan provider and will continue for two additional months. Note that this gives you only three months to move your Medicare plan to the new state. See Figure B.
Figure B: After You Move
When You Have Original Medicare with a Medigap Plan
Nearly 70% of Medicare beneficiaries are NOT enrolled in a Medicare Advantage plan. Instead, they have Original Medicare consisting of Part A and Part B coverage.
Original Medicare is a federal benefit. Your benefits under Parts A and B do not change when you move from one state to another with Medicare. You can also take your Medicare supplement (Medigap plan) with you to another state.
Your zip code determines the price of your monthly Medigap premium. Medigap plan prices do vary from state to state. Healthcare in some areas is more expensive than in other areas. That said, there is a chance your plan’s price will increase or decrease when you move.
If the price increase is more than you can afford, contact your Medicare insurance broker to shop your plan. There may be another carrier in your new zip code with a more affordable premium for you.
Be aware that when you apply to change plans, you will most likely need to go through medical underwriting. This means answering health questions so the carrier can decide whether to accept or decline you based upon your answers to those questions.
If you choose to apply for a new plan, know that there are a few states that have unique Medigap plans and rules that aren’t like other states. Moving Medicare from one state to another in Wisconsin, Massachusetts or Minnesota means that the structure of your benefits may also change.
When You Have a Standalone Prescription Drug Plan (PDP)
Most people with Original Medicare and a Medigap plan also have a standalone Part D drug plan. When moving to another state, getting a new drug plan is inevitable because drug plans are state specific. Even if you choose the same insurance company for your drug plan in your new state, your plan number will be different, so you have to apply for the new plan.
If you decide that you don’t want to get a new PDP when you move, just be aware that there will likely be a late penalty when you do re-enroll in a drug plan.
When You Have a Medicare Advantage Plan
Unlike Medigap plans, Medicare Advantage Plans do have networks that operates in select counties where you live, so if you move from one state to another, you will almost always need to change your plan.
When you move, you can choose to return to Original Medicare and apply for a Medigap policy. Another option would be looking for another Medicare Advantage plan that operates where you are moving.
There are two main plan types of Part C Medicare Advantage Plans. They are called HMO and PPO plans. HMO plans are usually quite restricting to the local area when it comes to which providers they allow you to use. You may have to choose a specific Primary Care Provider (PCP). You will need to stay within the plan’s network for all of your care except in medical emergencies.
PPO type plans usually have larger networks and unlike HMO plans, you usually don’t have to select a PCP. With a PPO plan, you can see a provider outside of the network if the provider is willing to see you and to bill the plan. It is almost always cheaper to stay within the network though.
Medicare Advantage Plans pay instead of your Original Medicare. This means your providers must bill the Medicare Advantage plan instead of Original Medicare.
Let Us Handle your Medicare Move to Another State
Let our team take a little bit of the stress out of your move.
When you are a client of Boomer Benefits, we help you with this crazy process at no charge. Odds are you have multiple plans that you will need to change when moving to another state.
Our Client Service Team is excellent at reviewing rates and exploring options within your new state. We can get your plans updated in a timely manner, leaving you with no worries about changes in coverage.
We have team members who are licensed and appointed in every state with knowledge of each of their specific rules. They will be able to inform you on how Medicare works within your new state. You can compare basic options by state at our website as well.
Yes, you read that right! There are penalties for not signing up for Medicare. If you incur penalties from enrolling in Medicare at the wrong time, they can stick around for a lifetime. Understanding when to enroll in Medicare and how to navigate the process, will help you keep your hard-earned money where it belongs.
Have you ever been late on paying a bill and been able to easily fix your tiny mistake? Me either. Unfortunately, life happens and we forget things. That’s understandable! Though, choosing to put things like Medicare on the back burner can come with a hefty price tag.
Your Initial Enrollment Period (IEP) begins three months prior to the month of which you turn 65 and ends three months later.
Late Enrollment Penalty with Part B
You are required to apply for Medicare Parts A and Part B on your own, if you are not already receiving social security benefits. You will enroll in both during your Initial Enrollment Period (IEP). The IEP begins three months prior to the month in which you turn 65 and ends three months later.
Part A is free to those that have worked in the United States for at least 10 years while Part B, however, will cost you each month. If you make $85,000 or less per year, the standard monthly premium as of 2018 is $134.00. The LEP (late enrollment penalty) will occur if you do not apply for Part B within your initial enrollment period. The LEP is not a one-time charge that you can pay and get rid of, it’s lifelong!
Part B monthly premiums go up by ten percent each year that you do not have creditable coverage.
For example: Sally decides to not get Part B for five years after her IEP ends.
5 years x 10%/year = 50%
$134 (monthly Part B premium) + 50% = $201/month
Instead of Sally only having to pay $134 per month for her Part B premium, she is stuck paying an additional $67 every month. Applying for Part B sooner rather than later means you will have coverage and you will avoid the penalties for not signing up for Medicare. A win-win situation if you ask me!
Late Enrollment Penalty with Part D
Part D is your Prescription Drug Coverage. Even though you are not required to obtain this, we recommend you do. That way you have protection for both current and future medications. Your IEP for Part D is usually identical to your IEP is for Part A and B. If you have a Medicare Advantage Plan, your Part D is probably included, so you won’t have to enroll in another one. If you have anything other than an advantage plan, Medicare expects you to enroll in Part D on your own. Now, if you fail to enroll in Part D, you will get a LEP just like with Part B.
The penalty is again added to your Part D monthly premium and is lifelong. It is calculated by multiplying 1% of the national base premium, which is $35.02, by the number of uncovered months without creditable coverage.
For example: Fred doesn’t enroll in Part D because he isn’t currently prescribed any medications. He goes 24 months without Part D coverage.
48 months x 1% of $35.02 (.35 ₵) = $16.80
$16.80 + your Part D monthly premium = your Part D monthly premium for life
The only way you can not enroll in Medicare after your IEP ends and still avoid the penalties is by having creditable coverage. Creditable coverage is when you have insurance through a different source other than Medicare. Forms of creditable coverage include being apart of your current employer’s insurance or being apart of your spouse’s employer’s insurance. It’s not always necessary for someone who does have creditable coverage to enroll in Medicare, but if you do choose to enroll during your IEP it will be for the better.
Creditable coverage will ensure you do not pay penalties for not signing up for Medicare.
Let’s say you don’t enroll in Medicare during your IEP because you have creditable coverage. You will then have to prove to Medicare that you did in fact have insurance during that time to avoid penalties for not signing up. As you might imagine, proving something to the government can take a lot of paperwork and time. Then there are those times when it doesn’t work at all. If Medicare has any reason to believe that you didn’t have creditable coverage, they can deny your forms. If that happens, you can always try calling Medicare but that doesn’t guarantee a resolution. While you are trying to straighten things out, those penalties are being tacked on to your premium.
Appealing these penalties is the next step. Appealing the penalty can be done through Maximus. Maximus is a business that provides help to Medicare and other government health agencies. They require you to mail forms in for your requests. From there, they will try and obtain proof of your creditable coverage by calling your previous employer for instance. Finally, a reimbursement for those penalties you were paying will be issued to you. The process with Maximus alone can take 90 days!
Boomer Benefits Services
Policyholders receive support from the Client Service Team for life!
That’s where Boomer Benefits comes in. As our client, we’d help you through all of this! Our team will act as your Medicare gurus, helping you avoid wasting time on the phone with automated systems. The Client Service Team speeds up the process by dedicating our time to you and following up with Medicare accordingly. This is good news for you, because with our guidance we can make sure you never see the penalties for not signing up for Medicare at the right time.
Moving on to Medicare after a lifetime of insurance through your employer can be a scary thing. We sometimes meet people who have unnecessarily double or even triple-insured themselves. It’s usually done out of anxiety over how Medicare will cover their healthcare needs. Some will even ask us – is Medicare good or bad?
Well, I’ve worked with Medicare-related insurance products for many years now. I’m happy to report that Medicare combined with the right supplemental insurance is some of the best coverage you will ever have.
I wish I could buy it myself.
Here’s why you should NOT fear Medicare:
Medicare’s “Network” is Huge
Approximately 91% of all physicians participate in Medicare. This is over 800,000 healthcare providers for you to choose from. This is far, far larger than any other network you have ever been covered by. In addition, if you choose to enroll in a Medigap plan, you can continue to use all of these providers. It doesn’t matter which insurance company provides your Medigap coverage.
Let me say that again because it’s important.
With Original Medicare and any Medigap plan, you can see any doctor that takes Medicare. It does not matter who your Medigap insurance company is.
Is Medicare good in terms of provider access? You bet it is!
Despite the fears about doctor shortages, fewer than 1% of physicians have quit the Medicare program. The Kaiser Family Foundation reported in 2013 that 96 percent of Medicare beneficiaries have access to care in a doctor’s office. The story that people on Medicare aren’t able to find a doctor is rarely true.
Here at Boomer Benefits we have had clients who have moved to a new city worried about finding a physician. They call us, and in every single instance over the last decade, we have found them a physician with no problem. We have NEVER had a single instance where we could not locate a convenient provider for them.
So rest assured that if you are enrolled in traditional Medicare, your access to physicians is a foregone conclusion. You can even visit Medicare’s website to use the Physician Compare tool to search for doctors in your city.
Is Medicare Good for People who Travel? Yep.
Is Medicare Good for People Who Travel?
Many retirees these days travel extensively. Some may even live part of each year in two different states. This is more common than ever with global families. We have a number of clients here who live several months every year in another state to be near children and grandchildren. Since traditional Medicare is a national program, you can see physicians in both states with no problems.
Likewise, if your supplemental insurance is a Medigap plan, that plan will pay after Medicare no matter where in the U.S. that you are receiving care. (Medicare Advantage programs, on the other hand, often have smaller local networks and care received outside of your local area may or may not be covered depending on your plan benefits. Do not join a Medicare Advantage plan without looking into this and ensuring that you are comfortable with your travel benefits)
No Referrals Necessary no Original Medicare
If you have been covered by an HMO plan in the past, you know that sometimes having to get a referral from primary care doctor in order to see a specialist can be a real pain. On traditional Medicare A & B, you can see any specialist or provider who accepts Medicare – referrals are not necessary.
While certain services require prior authorization under Medicare to ensure you get the most coverage, the flexibility of choosing your own providers within Medicare is a terrific benefit. For serious illnesses especially, you have the ability to see more than one specialist, or to see out the best specialist for your health condition, without having to obtain a referral.
So if having no referral requirement is important to you, choose Original Medicare instead of a Medicare Advantage plan.
Medicare + Medigap F = First Dollar Coverage
Did you know that if you enroll in a Medigap Plan F, which covers all your deductibles and coinsurance, you will essentially have first dollar coverage? This means that for any covered services, your coverage pays right from the first dollar due. You will have no copays for any Medicare-covered services.
Go to the doctor? No copay due from you. Spend 3 days in the hospital? No deductible to pay. Expensive MRI? Covered! What about chemotherapy? Won’t cost you a dime. As long as Medicare first pays its share, your Medigap Plan F will then pick up the rest. Your Medigap plan cannot refuse to pay its share on a bill that Medicare has approved.
That being said, you should know that in 2020, Medigap Plan F is going away. New enrollees will no longer be able to enroll in it. So many people are opting for Plan G these days. It works just the same as Plan F except you pay the Part B deductible once per year. Premiums are lower than Plan F though, so you usually come out ahead.
This can be especially important in states like Florida, where Medicare supplements are particularly expensive. Rates around the nation vary based on the cost of healthcare in the local area, so sometimes your plan decisions will be affected by what rates carriers have to offer in your area.
Is Medicare Good about Pre-existing Conditions?
People with a serious or chronic health condition often fear transitioning to Medicare. They worry that their pre-existing conditions won’t be covered. Fortunately, that is not the case. When you activate Medicare Parts A & B, there is no waiting period for treatment.
Be sure to enroll in a Medigap plan within 6 months of your Part B enrollment date though, to ensure that your supplement will do the same. If you already have Part B and are leaving your group health insurance plan, there is a similar but shorter guaranteed issue window where you can enroll in Medigap without fear of pre-existing conditions being excluded.
There are open enrollment periods so that you can get Medicare supplemental coverage without having to answer health questions.
Let me give you a real life example. Several years ago I received a call from a woman who was very ill and losing her group health insurance coverage because she could no longer work due to her illness. She was literally crying when she called our office because she was so scared. She had also just turned 65 during the prior month.
When we helped her enroll in her Medigap plan, she had an IV rack with her from which she was receiving fluids. She had further chemotherapy scheduled the next day. We assisted her with getting Medigap Plan F coverage in place the following day. She was immediately approved.
All of her further cancer care was covered. That’s how powerful the Medigap open enrollment window is for you!
Is Medicare Good for Preventive Care?
Back in the day, Medicare used to only provide benefits for injuries and illnesses. People had to pay out of pocket for an annual physical unless they purchased a Medicare supplement that included a benefit for an annual check-up.
In recent years though, Medicare has learned that proper preventive care can save the government a lot of money by catching illnesses early on. So they ahve added a whole host of new preventive care services. Medicare now offers free screenings for diabetes, cancer, glaucoma, aortic aneurysms and cardiovascular conditions. Other services are yearly wellness visits, bone mass measurements, flu and pneumonia vaccines.
People who use tobacco can take advantage of cessation counseling, which includes up to 8 sessions of therapy as well as nicotine patches in some circumstances.
There is even nutrition therapy for people with diabetes and renal disease and alcohol misuse counseling. Considering that prior to 2010, Medicare didn’t cover even an annual physical, the preventive care benefits are very good today.
We also shouldn’t forget that for 40 years there was no drug coverage in Medicare. Today we have Part D as a voluntary option for anyone who needs help with retail outpatient medications. There are better discounts on medications for people on Part D who experience the coverage gap, and due to the recent Bipartisan Budget Deal, there will be no more coverage gap in Part D as of January 1st, 2019.
Medicare IS Good When Paired with the Right Coverage
So is Medicare good or bad? All in all, it’s pretty great. While no program is perfect, we see people here all the time who are spending over a thousand dollars a month on Cobra benefits. Transitioning to Medicare is a relief for them. Medicare Part A costs nothing for most people and Medicare Parts B and D are reasonably priced.
As you age, taking new medications may become part of your daily life. It is important to know the effects these medications have on your body, how to properly take them, and any problems they may cause. With a busy life, it might be hard to find resources dedicated to educating you on your medications. Thankfully, you can get the education you need through a Medication Therapy Management program.
When you enroll in Medicare, you can choose to enroll in Medicare Part D (Prescription Drug Coverage). Once enrolled in Part D, you can find a list of prescription drugs covered by Part D in a Medicare Part D Formulary, or Medicare drug list. From this drug list, you and your doctor can decide the proper route of treatment for your medical needs.
After you determine a treatment plan with your doctor, you may be eligible to receive free services through a Medication Therapy Management (MTM) program. Through an MTM program, you will receive a comprehensive medication review to ensure the medications you are taking work to improve your health.
Your local pharmacist or health care professional can provide these services for you. If you are eligible and they provide this service, you will be able to sign up through them.
Am I Eligible for a Medication Therapy Management Program?
You are eligible for a Medication Therapy Management program if you take many medications for more than one chronic health condition. As long as you enroll in Part D and meet this requirement, contact your drug plan to confirm your eligibility. Once your plan confirms that you are eligible, you can schedule and receive your comprehensive medication review.
During this comprehensive medication review, you and your health care provider will discuss:
How well your medications are working
Side effects of your medications
Potential interactions between drugs you are taking
If your medication costs can decrease
Any other problems you are experiencing
After this process, you will receive a written document summarizing your medication review from your health care provider. This document will include their recommendations and describe any changes they believe would make your medications more effective. You will also get a personalized medication list that details all the medications you take and why you take them. This medication list is useful in any situation when you may need to present the medications you’re taking. This allows you to get the proper treatment in places such as an emergency room.
Note: You are still eligible to participate in a Medication Therapy Management program even if you are currently in a Long Term Care facility. Because these facilities already offer a monthly drug regimen review (DRR), there will be some overlap in the Medication Therapy Management program and the DRR. This overlap will not cause any problems.
When Should I Sign Up for Medication Therapy Managmement?
As soon as you contact your Part D plan and verify your eligibility, it is recommended that you enroll in a Medication Therapy Management program if you feel it is right for you. This allows for as much time as possible to receive the most out of your medications. There is, however, no penalty if you want to sign up later in your life.
The Centers for Medicare & Medicaid Services (CMS) requires every Part D sponsor to provide a Medication Therapy Management program for patients. The CMS reviews the program descriptions each year to ensure that whenever you sign up, you are getting the highest benefit from the program and from your medications.
Medicare Part D helps cover prescription drugs, but it doesn’t cover all of the costs. These out-of-pocket costs can quickly add up. Sometimes, the medications you need might be too expensive to afford. If this is the case, do not feel discouraged. You might qualify for Extra Help, a federal program that helps pay for some of these costs.
Who Is Eligible for Medicare Extra Help?
Depending on your monthly income, you may be eligible for the Medicare Extra Help program. In addition to income, your assets are also considered when you apply for Extra Help. You should still apply even if your monthly income and assets exceed the typical eligibility limits. You might still qualify. Complete the application if:
You have Medicare Parts A and B
Your combined savings and assets are not more than $14,100 if you are single or $28,150 if you are married
In some cases, you might automatically qualify for Extra Help. You might automatically qualify if you:
Have full Medicaid coverage
Get help from your state Medicaid program to pay your Part B premium
Get Supplemental Security Income benefits
It is important to note that your qualifications for Extra Help might change from year to year. If you do not qualify one year, you might the next. If you do qualify one year, you might not the next.
Extra Help Coverage
Not all Extra Help coverage is the same. Depending on your monthly income and your assets, you may qualify for full or partial Extra Help. If you qualify for full Extra Help, then you will have a $0 premium and deductible. This premium is only free if you also have a basic Part D drug plan with a premium at or below the Extra Help premium limit for your area. Your copay for generic prescription medications will be $3.35 and your copay for brand-name prescription medications will be $8.35. Your copayments will stop after you reach $5,000 in out-of-pocket drug costs.
If you qualify for partial Extra Help, your premium will depend on your income. You will find out more information about this coverage when you apply for Extra Help. In addition to the premium, you will have to pay an $83 deductible or the plan’s standard deductible, whichever is less expensive. You will have to pay 15% coinsurance or the plan’s copay, whichever is cheaper. After you hit $5,000 in out-of-pocket drug costs, you will pay $3.35 for generic prescription drugs, $8.35 for brand-name prescription drugs, or 5% of the drug cost, whichever is greater.
What If I Don’t Qualify for Extra Help?
You still have some options even if you don’t qualify for Extra Help. Your state might have programs in place to help you pay for your medications. To find out if your state offers these programs, contact your local State Health Insurance Assistance Program for more information.
How Can I Apply for Extra Help?
You can apply for Extra Help by going to the Social Security Administration website or by clicking here. On this site, you can find out if you qualify, apply for Extra Help, or return to an existing application.
How GoMedigap Can Help
Know the difference before you choose
Original Medicare is the familiar program that’s been around since 1965. In original Medicare, the government pays Medicare’s share of your medical bills directly to doctors and hospitals. You can go to any doctor or hospital anywhere in the country that accepts Medicare reimbursement. That is nearly all of them.
But original Medicare is not free. You will still be required to pay some health care costs out of your own pocket. For instance, people on original Medicare must pay a $1,216 deductible for every hospital stay (rising to $1,260 in 2015). They must also pay 20 percent of the cost of most kinds of outpatient treatments, including doctor visits. And unlike the private insurance you’re used to from your working years, Medicare does not have any limit on what you can spend out of your own pocket. The bills can mount up quickly, especially if you need costly treatments such as outpatient chemotherapy.
You may have a retiree or TRICARE plan that helps pick up some or all of those costs.
If not, you have two options for limiting your exposure to excessive out-of-pocket costs.
1. Medicare Supplement (Medigap) plans
These private plans cover most or all of original Medicare’s out-of-pocket costs. If you select this option, you will continue to be covered by original Medicare. After Medicare has paid your claims, it will automatically forward them to your Medigap plan. The Medigap plan will then pay its portion of the bill.
Medigap plans do not cover prescription drugs. Therefore you must also purchase a stand-alone Part D plan if you want drug coverage.
How to pick a Medigap plan.
2. Medicare Advantage
Anyone on Medicare can choose to receive their Part A and Part B benefits through one of these private health plans instead of through original Medicare. Medicare Advantage plans now cover nearly 3 in 10 Medicare recipients. Most Medicare Advantage plans also include Part D prescription drug coverage.
With a Medicare Advantage plan, you continue to pay your Part B premium as usual. You may also pay an extra premium for the plan. You are not allowed to have a Medigap and Medicare Advantage plan simultaneously.
Medicare Advantage plans typically come with deductibles and co-pays. But unlike original Medicare, they have an annual out-of-pocket limit. That means that once you have paid deductibles and co-pays that add up to the annual out-of-pocket limit, the plan will pay 100 percent of your medical bills for the rest of the year.
Medicare Advantage plans work like the managed care plans you may have had during your working years. You will have to receive your care from doctors, hospitals, and other providers within the plan’s network.
If you have a retiree plan, check with your plan administrator before signing up for a Medicare Advantage plan. It may affect your eligibility for your retiree benefits.
Once you are enrolled in Medicare, you can join, switch, or drop a Medicare Advantage or Part D plan once a year during the annual open-enrollment period, which runs from Oct. 15 through Dec. 7.
How to pick the best Medicare Advantage plan for you.
Here’s a chart that summarizes the two choices.
How it relates to Original Medicare Parts A & B
Private supplemental coverage that pays all or most Part A & B out-of-pocket costs.
Private health plan that provides Part A & B benefits directly in place of Original Medicare.
Average of about $150 to $200 a month. Can vary by age, health history, or both.
$0 to more than $100 a month depending on the plan. All plan enrollees pay the same regardless of age or health history.
Low to none (not counting premium).
In-network medical deductibles and copays of up to $3,400 to $6,700 a year, depending on the plan.
Choice of doctors and hospitals
Any that participate in Medicare.
HMOs: Plan providers only.
PPOs: Any provider, but out-of-network providers cost more.
When you can buy
First six months after you sign up for Part B and are at least 65 years old. After that, in most states you can be turned down or charged extra for pre-existing conditions.
When you first enroll in both Medicare A and B and annually thereafter during Open Enrollment (Oct. 15-Dec. 7).
Part D (drug) coverage
Not included. You must buy a separate Part D plan for this.
Most plans include Part D coverage.
Quality information available
No. There are no standardized ratings for Medigap plans.
Yes. Medicare.gov has star ratings (5 stars are the best). Consumer Reports has Medicare Advantage quality rankings from NCQA.
Cards in your purse or wallet
Three. 1. Red, white, and blue Medicare card. 2. Medigap card. 3. Part D card.
Usually just one Medicare Advantage card. The red, white, and blue Medicare card can stay in your desk drawer.
Little to none. Medigap almost always automatically cuts a check to providers after Medicare pays its share.
Some, because you pay deductibles and copays directly to providers.
How to pick the best Medicare Advantage plan for you
There’s a lot to consider when picking a Medicare Advantage plan. What will you have to pay out of pocket? Are your doctors in the plan? What would your drugs cost? We explain exactly how to use Medicare.gov’s search tool to research the best plan for you.
How to pick a Medigap plan
Shopping for these supplemental plans that pick up Medicare’s out-of-pocket costs can confuse the savviest consumer. We explain how Medigap work, how they are priced, and how to go about finding a plan that will work for you.
Which Medicare plan do you have?
You may be uncertain whether you have original Medicare or a private Medicare Advantage plan. The name on your insurance card probably doesn’t say “Medicare Advantage.” Instead, it might list a plan name, like “Secure Horizons.” Here’s how to find out which Medicare plan you have:
1. Call 800-MEDICARE (800-633-4227).
2. The system will ask you to say your “Medicare number.” That’s the number on your red, white, and blue Medicare card (see example). Everyone has this card, even those enrolled in Medicare Advantage plans.
3. The system will give you some options. Select 0 for a customer service representative.
4. When the representative comes on the line, you will be asked for your Medicare number again, as well as some other identifying information such as date of birth and full address.
5. Once your identity has been confirmed, ask the rep: “Could you tell me whether I have original Medicare or Medicare Advantage”? You will be told either: “There’s no Medicare Advantage plan on file” OR the name of your Medicare Advantage plan.
Caregivers can make this call on behalf of a Medicare enrollee, if they have the identifying information.
How to find the best Medicare drug plan
If you do not have a Medicare Advantage plan that includes Part D drug coverage, you must sign up for it separately.
When to sign up
You should sign up for Medicare Part D at the same time that you enroll in Part B.
Do not delay even if you do not take any prescription drugs regularly right now. If you wait until later to sign up, you will be charged extra on your premium for every month that you waited.
The amount of the premium penalty changes every year. In 2015, you will be charged one percent of $33.13 for every month you are late in starting Part D. So if you have waited for two years, the extra charge would be 24 percent of $33.13, or about $8 extra per month.
The only way to avoid this penalty without signing up for Part D is having equivalent drug coverage, called “creditable” coverage, from another source, such as a retiree plan. Your plan administrator can tell you whether your plan is equivalent.
What you will pay for Part D
The average Part D plan costs about $32 a month but prices can vary. In general if you buy a plan with a higher premium, you will pay less out of your own pocket when you actually use the plan.
If your 2013 income was above $85,000 for a single person or $170,000 for a married couple filing jointly, you will be charged extra for your Part D premium in 2015.
In 2015 the maximum allowable deductible for a Part D plan is $320, though many plans have lower or even no deductibles. And plans also charge varying amounts for the prescriptions. Sometimes they charge a flat-dollar co-pay and sometimes they charge a percentage of the cost of the prescription, called co-insurance.
Most plans sort drugs into “tiers,” with drugs in the lower tiers costing less.
The three coverage phases of Part D
You can think of your Part D “coverage year” as divided into three phases that come in order. If you don’t take a lot of costly drugs, you probably will never get out of the first phase.
Phase 1: Initial coverage
In 2015 you will pay an average of 25 percent of the costs of your medications until you and Medicare together have spent $2,960. But that’s only an average. Your personal share of expenses might be different depending on whether your plan has a deductible, how many drugs you take, and how much your drugs cost.
Phase 2: Donut hole
When you and your Part D plan together have spent $2,960 on drugs, you will enter this phase, also called the “coverage gap.” While in the donut hole, you will have to pay a larger share of your drug costs. In 2015 you will pay 45 percent of the cost of brand-name drugs and 65 percent of the cost of generics.
One part of the Affordable Care Act created a schedule for closing the donut hole. It is about half-closed now and will be completely eliminated as of 2020. Then there will be only two coverage phases in a year. (For more information on how the donut hole is closing, download this guide from Medicare.)
Phase 3: Catastrophic coverage
When total cost of your brand-name drugs and your share of the cost of generic drugs together add up to $4,700 for the year, you will exit the donut hole and enter the “catastrophic coverage” period. With catastrophic coverage, you will pay only 5 percent of the cost of your drugs until the end of the year.
Click on the image to get to Medicare.gov
How to choose a good Part D plan
Depending on where you live, you might have dozens of private plans to choose from, with different premiums, co-payments, and levels of coverage, including which drugs are covered.
Choosing a plan that is right for you can save you thousands of dollars per year in premiums and out-of-pocket drug expenses. It pays to review your Part D coverage every year at open enrollment, especially if you have started taking new drugs.
1. Start at Medicare.gov
Your first stop should be the plan finder on Medicare’s website, Medicare.gov. On the home page (pictured above), click on the green button titled “Find health & drug plans” to get started. Follow the screen instructions carefully and you should be ok. If you mess up, you can always start over.
After you have entered your ZIP code, you will be asked to list the drugs you take. Before starting this step, make sure you have an up-to-date list of the names of your drugs and the monthly dosages, because you will be asked to provide this information.
This step is tedious if you take a lot of drugs, but if you take it slow, you will clearly see how to use it. When you are done, you will be allowed to save your drug list for later reference. Do this because you’re going to need to come back to it. Write down the “drug list ID” and your “password date” so you can retrieve it later.
If you don’t take any regular medications, you can skip this step.
Next you will be asked to select up to two pharmacies near you. Make sure they are not part of the same chain.
2. Look at your annual drug costs
Once you have finished answering all the questions, you will come to a page titled “Refine your plan results.” Check the box that says you want to see “Prescription Drug Plans (with Original Medicare).” Finally click the brown box that says “Continue to Plan Results.
The first thing to do is make sure you are seeing all the plans in your area. At the top of the list, you will see a choice between seeing just 10 plans or seeing all of them. Ask to see all of them.
The plans will be automatically sorted in order of annual cost to you, based on your drug list and the pharmacies you chose. The cost will include your premium and your out-of-pocket costs for the drugs you take. (If you don’t take any drugs, you’ll see the average cost for plan members.)
If you click on an individual plan name, it will give you access to details about the plan.You will be able to see which tier of coverage your drugs are in, and exactly how much they will cost you every month of the year at each pharmacy you chose.
You may be surprised to see that the cost of your drugs may be quite different from one pharmacy to the next, even within the same plan. The drugs might even be in a different tier, depending on the pharmacy you choose.
Many plans give a better to deal to “preferred” pharmacies than to “standard” ones, so you want to keep looking until you find out whether the plan does this. When you look at the plan’s detailed results, you will see this information under each pharmacy’s name.
That is why it pays to repeat your search several times, using a different pharmacy each time, to make sure you are truly getting the lowest possible price. This is easy to do by clicking on “Update Search” in the “My Current Profile” box that appears at the upper right on all your search result pages.
3. Check out coverage rules
Sometimes plans have extra rules concerning certain drugs. When you look at the detailed results for each pharmacy, you will see these under three headings.
Prior authorization. The plan will only approve the prescription under certain specific medical circumstances. Your or your doctor will have to supply this information before you can get the drug.
Quantity limits. The plan will only allow you to get a certain amount of medication at a time.
Step therapy. The plan will ask you to try other drugs first.
4. Consider star ratings
Every plan has a star rating, with five stars being the best. Star ratings are based on factors such as customer service, how well and promptly the plan handles coverage appeals, and how many members have complained about the plan.
Find out if you can get financial help
Individuals and couples with limited financial means may be able to qualify for Extra Help from Medicare to pay their Part D premiums and out-of-pocket drug costs.
The financial and asset limits for 2015 are:
Individuals must have annual incomes of less than $17,505 and financial resources (not counting your primary home) of less than $13,440.
Married couples must have incomes of less than $23,595 and resources of less than $26,860
It’s more complicated than just turning 65
Understanding Medicare’s different parts
Medicare comes in four parts, each of which covers particular services or types of insurance. Virtually everybody who gets Medicare eventually enrolls in the first two parts, which have been around since the program started in 1966.
Part A covers hospital inpatient care, some types of home health care, hospice care, and care in skilled nursing facilities. There is no premium for Part A if you or your spouse has earned at least 40 Social Security work credits. (Here are your options if you don’t have those credits.)
Part B covers doctor services, outpatient hospital care, preventive care, and some types of home health care. You have to pay a monthly premium for Part B. In 2015, as in 2014, it’s $104.90 for individuals with an income of less than $85,000 a year and couples with an income of less than $170,000. Higher-income beneficiaries pay more.
The second two parts were added later.
Part C, also known as Medicare Advantage, is an alternate way of getting your Part A and Part B benefits. Instead of the government paying your provider directly, Part C plans are run by Medicare-approved private insurance companies. If you elect to get your benefits through Part C, you must also be enrolled in Part A and Part B.
Part D covers prescription drugs. This is an optional benefit that is only available through private insurance companies. Most Medicare Advantage plans include Part D.
For more details on exactly what each part of Medicare covers, see Medicare’s website.
No matter how you choose to receive your Medicare benefits, you will receive certain preventive services for free, such as immunizations and screening tests for breast and colon cancer.
Signing up for Medicare for the first time
Must have: ‘Medicare & You’
Before you do a single other thing, download a copy of “Medicare & You,” the consumer handbook that Medicare puts out every year. It includes detailed and crystal-clear instructions for starting Medicare—but, inexplicably, Medicare won’t mail a copy to you until you are already enrolled. Here’s where to find it.
When you can enroll
The “initial enrollment period” for Medicare consists of the three months before, the month of, and the three months after your 65th birthday. If you want your coverage to start the month you turn 65, sign up during that first three-month period.
If you are already receiving Social Security, Medicare will automatically enroll you. If not, you must enroll on your own either online through Medicare.gov or at a Social Security office.
When to enroll in Part A
Nearly everyone who becomes eligible for Medicare should enroll in Part A immediately, because it has no premium. This is true even if you are still working and have health insurance through your job. It will get you into the system and you’ll start receiving “Medicare & You.”
When to enroll in Part B
This is trickier. If you get it wrong, it can cost you money.
If you are already retired or will retire right at 65, the answer is simple: sign up for Part B the same time you enroll in Part A. If you are still working, you’re going to have to figure out the right time to enroll on your own.
It’s really important not to mess this up. If you don’t sign up for Part B when you should, you will be hit with a harsh late enrollment penalty. The penalty is a permanent increase in your Part B premium of 10 percent for every year that you should have been enrolled but weren’t.
So for instance, if you sign up for Part B two years after you should have, your premium will be 20 percent higher.
Tricky Part B situations
Look down this list to see if any of these situations apply to you. It will tell you what you should do about signing up for Part B.
You receive financial help to buy an individual health plan through your state’s Health Insurance Marketplace. Once you become eligible for Medicare, you can no longer get a subsidy. If you keep the plan anyway you will get that late Part B enrollment penalty. Enroll in all parts of Medicare and cancel your Marketplace plan.
You have an individual health plan but don’t receive a subsidy to help pay for it. If you keep this plan instead of enrolling in Medicare when you turn 65, you’ll be hit with the late enrollment penalty. It doesn’t matter where you got it or how long you’ve had it. Cancel it and enroll in Medicare.
You are still working at an employer with 20 or more employees. You can delay Part B enrollment without a penalty if you have health insurance through your own or a spouse’s current job. Once the last working spouse leaves his or her job, even if they’re getting COBRA or retiree insurance, it’s time for both of you to sign up for Part B. You have eight months, starting the month after the job ends, to get this done without penalty.
You are still working at an employer with fewer than 20 employees. Sign up for Part B at 65. Your employee health plan then becomes a “secondary” plan that pays for things only after Medicare has paid its share of the bills. Smaller workplaces like these are allowed to drop you from their employee plan after you reach 65. (That’s against the law for for larger employers.) If you ignore this rule, and your group health plan finds out you’re over 65, it may refuse to pay claims that Medicare would have paid.
You or your spouse is on COBRA. Once you turn 65 you must switch to Medicare or face the late enrollment penalty. But COBRA can still function as the main insurance for the younger spouse, and you can keep parts of your COBRA plan that Medicare doesn’t cover, such as your dental benefit. Learn more about Medicare and COBRA.
You have a retiree plan. If you have a retiree plan from your old job, you must sign up for Part B when you turn 65. After you go on Medicare, the retiree plan becomes a secondary plan. But if your spouse isn’t old enough for Medicare yet, he or she can still get the retiree plan if your former employer allows that.
You receive veteran’s benefits. The Department of Veterans Affairs and Medicare operate independently of each other for the most part. Medicare won’t pay for care you get at a VA facility. The VA won’t pay for the share of your medical bills that Medicare doesn’t pay. The VA encourages veterans to sign up for Medicare A and B to have the flexibility to seek care at non-VA facilities if need be. Moreover, if you are not in one of the VA’s higher priority groups, you could lose your coverage suddenly if Congress decided to cut back the VA’s budget. At that point, you would have to pay a penalty for late enrollment in Medicare Part B. Learn more about VA and Medicare.
You have TRICARE for Life. If your military service entitles you to TRICARE for Life, you must sign up for Part B when you turn 65. This is required regardless of whether you are working or have other sources of coverage. If you don’t, you lose your eligibility for this valuable benefit. Learn more about how TRICARE works with Medicare.
You are on the Federal Employees Health Benefits Plan (FEHB). FEHB will continue to cover you after retirement, even if you don’t take Medicare at all. But if you delay enrollment in Part B after retiring, and then change your mind later, you’ll be hit with the Part B late-enrollment penalty. Because FEHB premiums can be substantial, you need to consider your options carefully. Learn more about how FEHB works with Medicare.
Medicare Supplement plans help pay Medicare Part A and Part B costs
Original Medicare, the health coverage you can get when you turn 65 or have a qualifying disability, consists of Medicare Part A and Part B. Part A provides hospital insurance, and Part B (medical insurance) covers doctor visits; preventive services like certain screenings and vaccinations; durable medical equipment; and other services and items. But Part A can come with substantial annual deductible and copayments or coinsurance for certain inpatient services. Medicare Part B also has copayments, coinsurance, a monthly premium, and an annual deductible. Medicare Supplement (also known as Medigap and MedSupp) insurance can help downsize your Original Medicare cost burden. For example, some plans pay the Medicare Part A deductible.
Ten advantages of Medicare Supplement plans
Large medical bill protection
Let’s say you regularly need to purchase Medicare-covered, but costly, medical supplies. Under Medicare Part B, 80 percent of your total costs may be taken care of, but 20 percent of the bill is still your responsibility. You’ll need to reach the yearly Medicare Part B deductible before Medicare begins to pay its share; this deductible amount may change from year to year. If you’re protected by a Medicare Supplement plan, that extra 20 percent out of your pocket will be at least partly covered (completely covered by many Medicare Supplement plans).
Coverage outside of the United States
If you’re on vacation outside the U.S. and an accident or sudden illness happens to you, some Medicare Supplement plans help cover medical expenses outside of the country.
Depending on when you buy Medicare Supplement insurance, the insurance company has to accept you as a member even if you have health problems, and it can’t charge you a higher rate because of your condition. This is true if you buy your Medicare Supplement plan during the Medicare Supplement Open Enrollment Period(the six-month period starting the month you turn 65 and have Medicare Part B).You can apply for a Medicare Supplement policy anytime you like, but if you apply after the Medicare Supplement Open Enrollment Period, in most cases the health insurer can refuse to sell you a policy, or charge you more, based on a review of your health history. In some cases—for example, if you’re losing other Medicare coverage—you have “guaranteed issue rights” to get a Medicare Supplement plan if you buy it after the Medicare Supplement Open Enrollment Period.
Guaranteed renewable policies
Even if you have health problems, all standardized Medicare Supplement plans are guaranteed renewable, meaning insurance companies can’t cancel your plan if you’re making your premium payments. This also means your policy will automatically renew every year.
Choice of any doctor who accepts Medicare
Under most Medicare Supplement policies, you’ll be covered if you visit any doctor and hospital that participates in Medicare. An exception is a Medicare SELECT policy, which is a type of Medicare Supplement plan that may require you to use providers and hospitals in its network.
Wide variety of plans
The 10 standard Medicare Supplement policies offer a wide variety of coverage to help pay your Original Medicare costs. Those plans with the most coverage tend to have higher monthly premiums, while the reverse is also true.
All 10 of the standardized Medicare Supplement policies are regulated by law; all the benefits from each separate plan are the same, regardless of who your insurer is or (in most states) where you live. This is important to note when comparing prices with various insurance agencies. Plans are standardized somewhat differently in Massachusetts, Wisconsin, and Minnesota.
Control over your options
With Medicare Supplement insurance, not only do you get to choose a plan that suits your needs—you also have the option of adding Medicare prescription drug coverage. You can buy any stand-alone Medicare prescription drug plan that serves your area. A stand-alone Medicare Part D plan works alongside your Original Medicare coverage and isn’t part of the Medicare Supplement plan. (You may have a Medicare Supplement plan that offers prescription drug coverage if your plan had that coverage when you bought it, but you can’t buy a new Medicare Supplement plan with drug coverage anymore.)
In most cases, you can keep your Medicare Supplement policy when you move within the U.S.
“Free look” period
In some situations, you can switch from one Medicare Supplement policy to another. You may not want to drop your former Medicare Supplement policy at first—when coverage starts on your new Medicare Supplement policy, you will have 30 days to decide whether you wish to continue with that specific plan, or return to the old one.
Medicare Supplement plans by state
There are 10 standardized Medicare Supplement plans in 47 states sold by private insurers. These plans are named by letter (Plan A through Plan N; Plans E, H, I, and J are no longer sold). The plans are standardized such that each plan of the same name provides the same coverage no matter where it’s sold; for example, Plan N in North Dakota is the same as Plan N in California. Medicare Supplement plan costs, however, may vary regionally and by company. Massachusetts, Wisconsin, and Minnesota have their own standardized Medicare Supplement plans.
Medicare Supplement plans and the Part B premium
You need to keep your Original Medicare insurance and continue paying your Part B premium when you get a Medicare Supplement plan. Medicare Supplement insurance only applies to you, so if your spouse is also looking to receive Medicare Supplement, he or she will have to purchase a separate policy. If you are unsure whether Medicare Supplement is right for you, here are the top 10 reasons why many beneficiaries get Medicare Supplement Insurance.It’s important to note that Medicare Supplement policies don’t generally cover items or services such as (but not limited to) routine vision and dental, long-term care, hearing aids, private nursing care, or eyeglasses. Some of these benefits are covered through Medicare Advantage plans.