For Sales Agents & Brokers Other Important Facts For Sales Agents & Brokers Medicare Premiums Special Enrollment Periods Formularies

Medicare Part A Inpatient care in hospitals Medicare Part A, also known as the Hospital Insurance program, helps cover the costs of: Inpatient care in hospitals Inpatient care in a skilled nursing facility Hospice care services Some home health care services If the beneficiary is eligible for Medicare s/he will not have to pay a monthly premium for Part A if s/he or their spouse paid Medicare payroll taxes while working 40 or more quarters. If s/he and his/her spouse did not work enough quarters, or pay enough in Medicare payroll taxes, they may not be eligible for premium-free Part A. However, they may be able to purchase Part A by paying a monthly premium, up to $451.00 in 2012. Note: premium is subject to change each year.

Medicare Part B Medicare Part B, also known as the Medical Insurance program, helps pay for: Doctors’ services Outpatient care Some of the services not covered under Part A, such as some home health services, physical therapy, and occupational therapy Some preventive services Beneficiaries will need to pay a monthly premium for Part B that can be deducted from their monthly Social Security check. The Part B premium a beneficiary pays each month is based on his/her annual income. Most people pay a Standard Monthly Premium for Part B: 2009 $96.40 2011 $115.40 2010 $110.50 2012 $99.90 2013 $ 104.90 Premium is subject to change annually.

Part B Premiums For People With Higher Incomes In 2012, for beneficiaries whose “modified adjusted gross income” (MAGI) is greater than the legislated threshold amounts of: $ 85,000 for a beneficiary filing an individual tax return or married and filing a separate return, and $170,000 for a beneficiary filing a joint tax return, The beneficiary pays a larger premium, through Social Security deduction, for their Part B coverage.

Medicare Part C Medicare Part C, also known as the Medicare Advantage program, allows beneficiaries to choose a health plan offered by a private insurance company that is approved by Medicare. Medicare Advantage plans receive payments from Medicare to provide beneficiaries with the benefits covered by Medicare, including Part A (hospital) and Part B (physician and outpatient services). Many Medicare Advantage plans offer Part D coverage (prescription drug benefits) and many offer extra coverage, such as vision and hearing care, dental services, and health and wellness programs. In addition to Part B monthly premium, Medicare Advantage Plans can also charge an additional monthly premium and co-payments for some services, with CMS approval.

Medicare Part D Medicare Part D, an outpatient prescription drug benefit, is offered to everyone with Medicare. To get Part D drug coverage, the beneficiary has to join a plan run by a private insurance company that has been approved by Medicare or enroll in a Medicare Advantage Prescription Drug plan that includes drug coverage (MAPD). Part D prescription plans must offer at least a “standard” drug benefit determined by Medicare, and may provide additional benefits. With the passage of the Patient Protection and Affordable Care Act signed into law on March 23, 2010 by President Obama, seniors who are enrolled in a Part D plan will see a reduction in the amount they must pay for their prescription drugs when they reach the donut hole. By 2020, the donut hole will essentially be "closed" and rather than paying 100% of the costs, their responsibility will be 25% of the costs.

Medicare Part D Coverage $325.00 deductible must be met by the beneficiary. 25% cost sharing until $2,970 in total drug costs occurs. During the coverage gap phase, there is 47.5% beneficiary cost sharing for covered Brand name drugs. For Generic drugs, there is a cost sharing of 79% by the beneficiary. This phase is also sometimes called the “Donut Hole.” When $4,750 is met in out-of pocket-costs, the plan pays most of the cost of covered drugs for the remainder of the year. This is called “Catastrophic” coverage. (small co-payment of $2.65 for generic or $6.60 for brand drugs or 5% whichever is greater) Note: Amounts shown are for 2013, subject to change annually.

Let’s Look at a Diagram to get a Complete Picture of the Standard Plan Beneficiary Pays no more than 5% or small copay ($2.65 for generic or $6.60 for brand drugs) whichever is greater Catastrophic Coverage Threshold -$4,750 Brands Generics 52.5% Discount Plan Pays 21% Beneficiary Pays 47.5% Beneficiary Pays 79% Coverage Gap Initial Coverage Limit - $2,970 Beneficiary pays 25% Plan pays 75% $325.00 Deductible Beneficiary pays 100%

Part D-Income Related Monthly Adjustment Amount (Part D-IRMAA) January 1, 2011, the Affordable Care Act amended the Social Security Act by establishing an Income Related Monthly Adjustment Amount under the Part D program (Part D-IRMAA). The Part D-IRMAA is an amount added to the monthly Part D premium for individuals whose modified adjusted gross income (MAGI) exceeds certain threshold amounts. The threshold amounts are the same as those used to calculate Part B premium amounts shown previously and are subject to change annually. The Part D-IRMAA is paid directly to Social Security or through SS deduction.

What is the Late Enrollment Penalty (LEP)? The LEP is an amount that is added to your Part D premium. You may owe a LEP if at any time after your initial enrollment period is over, there is a period of more than 63 days in a row when you don’t have Part D or other creditable prescription drug coverage. There are exceptions: if you get Extra Help than you will not owe a LEP. Beneficiaries can find out at enrollment the amount of their LEP, if any. If you are found to be the subject of a LEP, but disagree, you may request a “reconsideration request form” from the plan.

How the Medicare AEP, MADP, ICEP & SEP Enrollment Periods Work... Annual Enrollment Period (AEP) Medicare Advantage Disenrollment Period (MADP) Initial Coverage Enrollment Period (ICEP) Special Enrollment Period (SEP) October 15th – December 7th January 1st – February 14th 7 months of eligibility: begins 3 months before first entitlement to Part A & B; ends the later of either the last day of the month preceding entitlement to Part A & B or last day of Part B initial enrollment Varies: refer to the “Attestation of Eligibility” on the enrollment application for qualifying reason All Medicare beneficiaries may enroll or disenroll. Coverage begins 1/1/13 May switch back to Original Medicare and elect a Part D plan Newly eligible may enroll in a Medicare Advantage plan May enroll or disenroll in a plan due to a qualifying reason

Special Enrollment Periods Special Enrollment Periods (SEPs) are periods outside of the usual IEP, AEP or MADP when an individual may enroll in a a plan or change his or her current plan election. The length of a SEP and the effective date of coverage vary depending on the reason for the SEP. The Plan and/or CMS determines whether an individual qualifies for an SEP or not.

Common SEP Qualifying Events Changes in Where a Beneficiary Lives: New address not in the Plan’s service area or within the Plan’s service area but new Plan options are available. Move back to the US after living elsewhere. Release from jail. A move in to, out of or currently living in a an institution. Changes That Cause Loss of Current Coverage: No longer eligible for Medicaid. Loss of coverage from an employer or union. Involuntary loss of creditable drug or other coverage. Loss of drug coverage through a Medicare Cost Plan. Beneficiary drops their PACE plan. Beneficiary Has a Chance to Get Other Coverage: Opportunity to enroll in a Employer or Union sponsored plan. Opportunity to enroll in drug coverage as good as Medicare such as TRICARE or VA. Opportunity to enroll in a PACE plan. Beneficiary lives in a service area where there is a MA or MAPD plan available with an overall 5-Star Rating. 5 Star Rating plans may enroll members all year long. Changes in the Beneficiary’s Plan Contract with CMS: CMS sanctions the beneficiary’s plan. The beneficiary’s plan terminates it’s contract with Medicare during the contract year. The beneficiary’s MA, MAPD, PDP or Cost Plan contract with Medicare is not renewed for the next contract year.

Other SEP Qualifying Events Beneficiaries eligible for both Medicare and Medicaid – Dual Eligibles. Beneficiaries who qualify for the Extra Help program. Beneficiaries enrolled in a State Pharmaceutical Assistance Program (SPAP) or lose their eligibility. Beneficiary drops a Medigap policy the first time they enrolled in a MA or MAPD plan. Beneficiary qualifies for Medicare Chronic Special Needs Plan(CSNP) and one is available in their service area. Beneficiaries who no longer have a condition that qualifies for the CSNP they are enrolled in. Beneficiary joined a plan, or chose not to join a plan, due to an error by a Federal employee. Beneficiaries not properly told that their private drug coverage was not creditable. Beneficiaries not properly told that their private drug coverage was creditable.

How to Understand Your Formulary Formulary Exception – you can ask the plan to make an exception to the coverage rules. Transition Process – if you are newly eligible, switching plans or have a change in level of healthcare, you can receive a one-time 31 day supply of your current medications within the first 90 days of membership. Cost Tiers – each drug is categorized by tier, which determines how much you will pay for that drug. Restrictions- some drugs have prior authorization (PA), quantity limits (QL), authorization must be made as to whether the drug is Part B or D (B/D) and/or step therapy (ST) requirements. If so, the drug will be noted in the formulary. (cont’d)

How to Understand Your Formulary Restrictions(cont’d) If your drug is indicated as PA, your doctor will need to contact the plan to request authorization. If your drug is indicated as QL your doctor will need to prescribe the plan approved amount or contact the plan for an exception. If your drug indicates ST, the plan will want you to first try certain drugs to treat your medical condition before we will cover another drug for that condition. If your doctor has already had you on the step drugs, they may ask the plan for an exception. If your drug is indicated as BD, the plan must determine whether it is covered under Part B or Part D. Network – participating pharmacy network is extensive. Mail order program is available.