Chapter 11: Choosing the Best Insurance and Assuring End of Life Wishes

Appendix

Medicare Advantage Plans

These plans are offered by private companies that Medicare approves. There are many types of Advantage Plans. Medicare identifies 6 categories of these Plans¹:

• Health Maintenance Organization (HMO) Plans
• Preferred Provider Organization (PPO) Plans
• Private Fee-for Service (PFFS) Plans
• Special Needs Plans (SNPs) There are other less common types of Medicare Advantage Plans that may be available:

• HMO Point of Service (HMOPOS) Plans: An HMO Plan that may allow you to get some services out-of-network for a higher cost.
• Medical Savings Account (MSA) Plans: A plan that combines a high deductible health plan with a bank account. Medicare deposits money into the account (usually less than the deductible). You can use the money to pay for your health care services during the year

Some important differences between the categories include: can you get health care from any doctor, other health care provider, or hospital; are prescription drugs covered; must you choose a primary care doctor; do you have to get a referral to see a specialist. Further guidance on comparing costs and coverages within and across these different Advantage Plans is available from consumer groups ² as well as from insurance consultants.

Medicare Enrollments

Automatic enrollment in Part A and Part B occurs in certain circumstances such as: already getting benefits from Social Security or the Railroad Retirement Board; under age 65 and have a disability; have Amyotrophic Lateral Sclerosis (Lou Gehrig’s disease); live in Puerto Rico and get benefits from Social Security or the Railroad Retirement Board. If you’re automatically enrolled, you’ll get your Medicare card in the mail 3 months before your 65th birthday or your 25th month of disability. If you’re not automatically enrolled, you will need to sign up for Part A and Part B via Social Security (office or online) and complete an enrollment application.³

Premium-free Medicare Part A

Part A Hospital Insurance is costly with a monthly premium up to $413 in 2017. However, most people get “premium-free Part A” if you or your spouse paid Medicare taxes while working. You can get premium-free Part A at 65 if: you already get retirement benefits from Social Security or the Railroad Retirement Board; or you’re eligible to get Social Security or Railroad benefits but haven’t filed for them yet; or you or your spouse had Medicare-covered government employment. If you’re under 65, you can get premium-free Part A if: you have received Social Security or Railroad Retirement Board disability benefits for 24 months; or you have End-Stage Renal Disease  and meet certain requirements.

Medicare Part D Prescription Drug Late Enrollment Penalty

The cost of the late enrollment penalty depends on how long you went without Part D or creditable prescription drug coverage. Medicare calculates the penalty by multiplying 1% of the “national base beneficiary premium” ($35.63 in 2017) times the number of full, uncovered months you didn’t have Part D or creditable coverage. The monthly premium is rounded to the nearest $.10 and added to your monthly Part D premium. The national base beneficiary premium may increase each year, so your penalty amount may also increase each year. The late enrollment penalty can be avoided if you: join a Medicare Prescription Drug Plan when you’re first eligible; don’t go 63 days or more in a row without a Medicare drug plan or other creditable drug coverage; tell your Medicare Drug Plan about your creditable drug coverage.

Is Medicare Primary or Secondary?

If you are retired and have both Medicare and a Group health plan (retiree) coverage from a former employer, Medicare is usually your primary insurance that pays first and the retiree group health plan is secondary and pays second.  Be aware that employers aren’t required to provide retiree coverage, and they can change benefits or premiums, or even cancel coverage. If you’re age 65+, have Medicare but are still working, your employer has 20+ employees, and you have group health plan coverage based on your current employment (or the current employment of a spouse of any age), the group health plan usually is primary and pays first. There are many other situations such as having: Medicaid; COBRA continuation coverage; Tricare; Veterans VA benefits. Guidance on these and other issues of coordination of health benefits can be found online. ⁴

Medicare Supplemental Insurance

Assuming Medicare is your primary insurance, there is good guidance on secondary insurance policies. ⁵ There are two types of Medicare Supplemental insurance policies: Medigap; and group health plan (retiree) coverage from a former employer. A Medigap policy is sold by private insurance companies. Its purpose is to help pay some of the health care costs that Original Medicare doesn’t cover such as copayments, coinsurance, and deductibles. Medigap policies are standardized and must follow federal and state laws. They must be clearly identified as “Medicare Supplement Insurance.” Insurance companies can sell you only a “standardized” policy identified in most states by letters such as Medigap Plan A through Plan N. All of these policies offer the same basic benefits but some offer additional benefits that may meet your individual needs more precisely. For example, some Medigap policies also offer coverage for services that Original Medicare doesn’t cover such as medical care when you travel outside the country. There are many varieties of Medigap policies that vary in costs and coverages. A helpful chart compares Medigap plans A thru N on ten items of coverage. ⁶ Medigap insurance is obtained from insurance companies or through groups such as AARP

The other type of Medicare Supplemental Insurance is not Medigap though it might be similar. This occurs when you’re retired and have both Medicare and also have group health plan (retiree) coverage from a former employer. While retiree coverage isn’t the same thing as a Medigap policy, it usually offers benefits that fill in some of Medicare’s gaps in coverage—such as coinsurance and deductibles. In this situation, Medicare usually pays first for your health care bills and your group health plan coverage pays second. Since Medicare pays first after you retire, your retiree coverage is likely to be similar to coverage under Medicare Supplement Insurance (Medigap). However, employer-based plans are not regulated by federal and state laws. How your particular retiree group health plan coverage works depends on the terms of your specific plan. Your employer or union, or your spouse’s employer or union, might not offer any health coverage after you retire. If you can get group health plan coverage after you retire, it might have different rules, and might not work the same way with Medicare. Thus, you would be wise to learn the details of your retiree group health plan and you can compare it with the various Medigap plans to see which type would be best in affordability and coverage for yourself and family. We suggest you consult with a professional insurance agent or employer Human Resources office or healthcare advocate or knowledgeable friend in assessing which type of supplemental insurance is best for your particular circumstances.

Long-term Care Insurance

Long-term care is the assistance needed over an extended period of time to manage rather than cure a chronic condition such as arthritis, a stroke, dementia, frailties of aging, recovery from surgery or an accident. Care could be needed for weeks, months, or years. This care is often not well-covered by other health insurance policies. Long-term Care Insurance is quite variable in coverage features. Costs for similar coverages may vary considerably between different insurance companies. Coverage may typically include Home & Community-based care benefits (e.g., Home care; Adult Day Care Center); assisted living; respite care; hospice care; nursing home and Alzheimer’s facilities. Other services covered may include Caregiver training and Care management (i.e., designing a Plan of Care meeting long-term care needs). There may be coverage for durable medical equipment such as: walkers; wheelchairs; hospital beds; infusion pumps; grab bars; ramps to permit movement from one level of residence to another. Two typical clinical requirements to activate covered benefits include: (1) a person is chronically ill or has a loss of functional capacity that is expected to last at least 90+ days; (2) assessment shows an inability to perform 2 or more Activities of Daily Living (ADLs) or that the disability is due to Severe Cognitive Impairment. ADLs include: Bathing; Continence; Dressing; Eating (Feeding); Toileting; Transferring (in/out of chair or bed). Not all long-term care insurance policies cover all of these services nor do they all pay the same for similar services. It is best to study several different plans with a professional advisor who can help you understand the costs, services, benefits and limits of different available coverages. Keep in mind that the younger you purchase this particular insurance the less expensive it will be. It is important to assess the value of such a policy to fill healthcare gaps left by other insurances such as Medicare. Further information is available online. ⁷

Medicare Coverage of Telemedicine Services

Medicare Part B covers telemedicine services when the originating site (where the patient is) is a rural Health Professional Shortage Area (HPSA) located either outside of a Metropolitan Statistical Area (MSA) or in a rural census tract, or a county outside of a MSA. The US Department of Health & Human Services-Health Resources & Services Administration determines HPSAs and the US Census Bureau determines MSAs. This originating site must be an approved medical facility and not the patient’s home. The Medicare coverage is not affected by the location from which the telehealth services are being delivered (the “distant” site).

Approved medical facilities include a doctor’s office; acute care hospital; critical access hospital (less than 25 inpatient beds; located in a rural area; average length of stay 4 days; 24×7 emergency services); rural health clinic; federally qualified health center; hospital-based or critical access hospital-based dialysis facility; skilled nursing facility; and community mental health center.

For calendar year 2017 Medicare telehealth services (subject to State law) can be provided by: Physicians; Nurse practitioners; Physician assistants; Nurse-midwives; Clinical nurse specialists; Certified registered nurse anesthetists; Clinical psychologists and clinical social worker; registered dieticians or nutrition professionals. The telemedicine equipment must be an interactive audio and video telecommunications system that permits real-time communication between the providers at the distant site with the beneficiary at the originating site. Further information and specific billable clinical services are available that also include preventive and annual wellness procedures as well as a considerable range of mental health treatments. ⁸