Medicare Basics & Resources

 

This article describes some of the basics of Medicare, including Parts A, B, & D, Medicare Advantage, Medicare Supplement plans (or “Medigaps”), Medicare Premium Payment Programs (MPPPs), and Extra Help.  More importantly, this article points to many reliable Medicare resources where more detailed information can be found.

Resources

There are many great resources, both national and local, that provide information about Medicare.  Some of the best include:

  • www.MedicareInteractive.org – This site is maintained by the Medicare Rights Center and includes a ton of detailed information for advocates.  Just type your question into the search box on the site and see what you find.
  • www.medicareadvocacy.org – Another well-regarded national non-profit specializing in Medicare.
  • www.Medicare.gov and www.CMS.gov – Official websites of the Medicare program.  It’s often easiest to search using Google, then use the reliable information found on these sites.
  • www.Medicare.gov/find-a-plan – Knows as the “Medicare Plan Finder,” this site contains all the details of every Part D and Medicare Advantage plan available.  It allows plan shopping (based on a patient’s specific list of medications) and enrollment.
  • Medicare & You (2016) – The official handbook for the Medicare program.  Written to be understandable for most Medicare beneficiaries, it contains a wealth of information.
  • www.ssa.gov/medicare/prescriptionhelp – Information about the Extra Help program that helps low-income Medicare beneficiaries with their prescription drug costs.
  • RI EOHHS website on Medicare Premium Payment Programs – Basic information about MPPPs in Rhode Island.
    • The MPPP application is available here.
  • The Point – 401-462-4444 – A program that provides one-on-one Medicare counseling all over the State of Rhode Island, both in person and over the phone.

What is Medicare?

Medicare Part A – Hospital Coverage

  • Coverage for hospital stays, hospice, nursing home, skilled nursing facilities, and home health care.
    • Coverage can be limited, especially for nursing home, skilled nursing facilities, and home health care.
    • More information on Part A covered services available here.
  • Includes a deductible of $1,288 per stay (in 2016) and some co-insurance depending on length of stay
    • More information on Part A costs available here.
  • Free (no premiums) for those who worked (or those whose spouse worked) long enough.  Can cost money for those with less work history.
    • More information on Part A premiums available here.

      People with Medicare Parts A and/or B have a red, white, and blue Medicare card.
      Red, white, and blue Medicare card.

Medicare Part B – Outpatient Coverage (Doctor’s Offices)

  • Coverage for doctor’s office visits, other outpatient services, and durable medical equipment
    • More information on Part B covered services available here.
  • Normally 20% co-insurance (so Medicare only pays 80% of costs)
  • Annual deductible of $166 (2016)
    • More information on Part B costs available here.
  • Most people pay a premium of $104.90 (in 2016)
    • Premium can be higher for those with higher incomes.
    • Premium can vary depending on the year in which your Part B started.
    • Premiums can be waived for those with limited income and resources.  See information below on Medicare Premium Payment Programs.
    • More information on Part B premiums available here.

Medicare Part D – Prescription Drugs

  • Drug coverage, provided through private health insurance companies
  • There are about 25 different plans available in RI (in 2016)
    • Each plan has different copays, deductibles, and covered drug formularies
    • Most plans include a “donut hole”
    • More information on Part D coverage and costs available here
  • For those with limited income, many plans are available at zero premium and with no donut hole.  See information below on Extra Help.
  • Detailed information about all Part D plans available at www.Medicare.gov/find-a-plan

Medicare Advantage (sometimes called “Part C”)

  • Medicare Parts A and B (and often D) delivered through a single insurance company
  • Plans offered in RI by BCBSRI and by AARP (United) (in 2016)
  • Most plans have fixed copays for doctor and hospital visits (instead of the 20% coinsurance in Part B)
  • Plan premiums vary from $0 to about $250 per month (in addition to the normal Part B premium)
  • Enrollees must get care from providers participating in the insurance company’s network.
  • Detailed information about all Medicare Advantage plans available at www.Medicare.gov/find-a-plan

Medicare Supplement Plans (“Medigaps”)

  • For people with Parts A & B (often called “Original Medicare”), Medigap plans fill in the gaps
  • Enrollees pay a monthly premium
  • The Medigap plan pays some of the costs that Medicare doesn’t cover, like (for example) the 20% coinsurance for Part B or the deductible for Part A
  • There are several types of Medigap plan designes, and each plan design covers different Medicare costs
  • There are about 10 companies offering Medigap plans in RI, and some of those companies offer multiple plan designs
Medigap plan designs and coverage
Medigap plan designs and coverage.

Who is Eligible for Medicare?

There are four categories of people who are eligible for Medicare:

  1. People 65 years of age or older
  2. People under 65 who are disabled and receiving Social Security Disability (SSD) for more than 24 months
  3. People with End-stage renal disease (ESRD)
  4. People with ALS (Lou Gehrig’s Disease)

To receive Medicare, with some very limited exceptions, the person must also be a U.S. citizen or be a legal permanent resident (“L.P.R.” or “green card holder”) with five years continuous residence in the U.S.

For Part A to be free, the person or their spouse must have 40 “quarters” of work history credit under the rules of the Social Security Administration.  Those with less work history may still be eligible for Medicare, but they may have to pay a premium for Part A.

Enrolling in Medicare

There are several ways in which somebody can enroll into Medicare:

  • Initial Enrollment Period (IEP) – 3 months before the month of the person’s 65th birthday, the month of their 65th birthday, and the 3 months following the month of their 65th birthday
  • SSD Recipients – Enrollment automatic after 24 months of SSD
  • Open Enrollment Period (OEP)
    • Parts A & B – January 1 to March 31 every year, with coverage effective July 1
    • Part D – October 15 to December 7 every year, with coverage effective January 1
  • Special Enrollment Periods (SEPs)
    • Parts A & B – During or within 8 months after someone has coverage through their own or their spouse’s current employment at a large employer.
    • Part D – Many options, but the most common Part D SEP opens for 2 months following the loss of other creditable coverage.
    • More information on SEPs available here (Medicare.gov), here (Part B), and here (Part D).

For those who join Medicare late, late enrollment penalties can apply.  More information available here (Part B) and here (Part D), and here (Part A, less common).

The decision about when to enroll into Medicare can be complex, and mistakes can have serious consequences.  The Point (401-462-4444) is an excellent resource for one-on-one counseling through this process.

Help for Low Income Medicare Beneficiaries

There are two sets of programs that help low-income Medicare beneficiaries with their healthcare costs:

  • Medicare Premium Payment Programs (MPPPs), and
  • Extra Help for Part D (sometimes called the “Low Income Subsidy” or “LIS”).

Medicare Premium Payment Programs (MPPPs)

The Rhode Island Executive Office of Health and Human Services (EOHHS) administers the MPPPs.  These programs can help with premiums (and sometimes copays and deductibles) for Parts A and B.  There are three MPPPs:

  • QMB (Qualified Medicare Beneficiary),
  • SLMB (Specified Low-Income Medicare Beneficiary), and
  • QI (Qualified Individual).

The program eligibility rules and coverage are outlined below:

MPPP Eligibility & Coverage

 QMBSLMBQI
Countable Income Limit (Monthly, 2016)100% of FPL
$990 (single)
$1,335 (couple)
120% of FPL
$1,188 (single)
$1,639 (couple)
135% of FPL
$1,336 (single)
$1,802 (couple)
Resource Limit (2016)$7,160 (single)
$10,750 (couple)
$7,160 (single)
$10,750 (couple)
$7,160 (single)
$10,750 (couple)
CoveragePart A/B Copays
Part A/B Deductibles
Part A/B Premiums
Automatic Extra Help
No Part B Late Enrollment Penalty
Part B Premiums
Automatic Extra Help
No Part B Late Enrollment Penalty
Automatic Extra Help
No Part B Late Enrollment Penalty
Other NotesPossible to get 3 month retro coverageCannot have simultaneously with full Medicaid
Possible to get 3 month retro coverage

Extra Help (for Part D)

The Social Security Administration offers “Extra Help” with Part D costs to low income beneficiaries.  Extra Help can cover Part D premiums, and drastically reduce drug copays.  Extra Help can also often eliminate the Part D “donut hole.”

There are different levels of Extra Help, depending on the applicant’s income and resources.

More information can be found at www.ssa.gov/medicare/prescriptionhelp.  This chart from the Medicare Rights Center is also helpful.

Any Medicare beneficiary with Medicaid or with an MPPP automatically gets enrolled into Extra Help.  There is no need to file a separate application.

Resources (Again)

There are lots of great resources out there, so use them!

Author:  Sam Salganik
Date: May 25, 2016

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