Welcome to Medicare 101!  What is Medicare?  Who is eligible?  What benefits does Medicare cover?  What benefits doesn’t Medicare cover?  What other coverage is available?  Medicare enrollment periods  Things to consider when choosing coverage Medicare program basics M_LG_PR_90414

Page 2  The nation’s largest health insurance program, covering approximately 42 million Americans  Funded by the United States government to provide affordable health benefits and services (see slide 4 for eligibility requirements)  Administered by the Centers for Medicare & Medicaid Services (CMS) What is Medicare?

Page 3  Did you know:  President Lyndon B. Johnson established the Medicare and Medicaid programs in 1965?  President Harry S. Truman was the first beneficiary to enroll in Medicare in 1965, receiving his first benefits in 1966?  Aetna paid the first Medicare claim in 1966? Fun Facts

Page 4  People age 65 and older who are:  entitled to monthly Social Security benefits – even if they plan to keep working  widows or widowers age 65 who are entitled to Social Security benefits  Those under age 65 who:  have received Social Security disability benefits for at least 24 months  have ALS (Amyotrophic Lateral Sclerosis), known as Lou Gehrig’s disease, the first month they are entitled to Social Security benefits  need maintenance kidney dialysis or a kidney transplant, and are entitled to Social Security benefits Who is eligible for Medicare?

Page 5  Part A – basic hospital insurance  Managed by the government, usually for no monthly premium  Coverage is automatic upon enrollment in the Medicare program  Helps pay for benefits such as:  inpatient hospital care  skilled nursing facility care  home health agency services  hospice benefits  Must pay $1,068 deductible per benefit period before coverage begins*  covers days 1-60 (hospital)  Pay $267 per day in a hospital, days 61-90*  Pay $ per day in a skilled nursing facility, days * What benefits does Medicare cover? * Coverage is per “benefit period,” which begins the first day of a stay in a facility and ends when out of the facility for 60 days in a row. If admitted after one benefit period ends, a new one begins. Rates are for 2009 and change annually.

Page 6  Part B – basic medical insurance  Managed by the government for a $96.40 monthly premium deducted from Social Security check  Coverage is optional but automatic upon signing up for Social Security, unless requested otherwise  Helps pay for benefits such as:  doctor visits for covered services  outpatient surgery  lab fees and X-rays  durable medical equipment, such as an oxygen tank or cane  Must pay annual $135 deductible before coverage begins*  Pay 20% for Part B benefits after deductible is met What benefits does Medicare cover? * Rate is for 2009 and changes annually.

Page 7  $1,068 Part A deductible per benefit period*  $135 annual Part B deductible*  $8,010 inpatient hospital copay per 90-day stay*  $10,680 inpatient skilled nursing facility copay per 100-day stay*  Ambulance charges  20% for covered doctor services  Worldwide emergency medical coverage  Annual physical, hearing and eye exams  Allowances for eyewear and hearing aids  Dental care and dentures  Prescription drugs What benefits doesn’t Medicare cover? * Rates are for 2009 and change annually.

Page 8  There is no limit to the number of benefit periods per year, and the Part A deductible and coinsurance must be paid for each benefit period  The $1,068 Part A deductible must be paid in full for each hospital stay up to 60 days (i.e. benefit period), whether the stay is 5 days or 10 days*  Part A benefits do not cover visits from specialists, x-rays, or other Part B services that may take place during a hospital stay  Part B coverage is optional, but, if not covered by another health plan, the premium increases 10% each year enrollment is delayed Important considerations * A benefit period begins the first day of a stay in a facility and ends when out of the facility for 60 days in a row. If admitted after one benefit period ends, a new one begins. Rates are for 2009 and change annually.

Page 9  Consider how additional Medicare coverage might help cover costs On her way out of the house, Mary slips and injures her ankle. She is hospitalized for two days. During her stay, a specialist sets her bone and she gets an x-ray. If Mary has the Original Medicare Plan, the Medicare-approved amount for a doctor visit is $150 and an x-ray is $1,000, how much will Mary pay? Important considerations

Page 10  Here’s what Mary will pay with the Original Medicare Plan Important considerations Original Medicare (2009 Rates) Annual Deductible Depending on the Medicare plan she chooses, Mary may have to pay an annual deductible before receiving any of the following benefits $135 (Part B) Inpatient Hospital Care (Includes X-ray)$1,024 initial deductible, which covers up to 60 days Specialist Visit20% of Medicare-approved amounts Mary Pays: Annual Deductible Inpatient Hospital Care Specialist Visits 1 orthopedic surgeon 1 radiologist Total $135 (Part B) $1,024 (Part A deductible) $30 ($150 x 20%) $1,219.00

What other coverage is available? Medicare plan options A variety of coverage options are available through private health insurance companies to help pay for benefits not covered by Medicare Parts A and B.  Medicare prescription drug coverage  Medicare supplement plans  Medicare Advantage plans

What other coverage is available? Page 12 Original Medicare (Parts A & B) Medicare Prescription Drug Plans (Part D) Medicare Supplement Plans Medicare Advantage Plans (Part C)  Managed by the Centers for Medicare & Medicaid Services (federal government)  Usually requires payment of a monthly Part B premium  Covers basic hospital care (Part A) and basic medical care (Part B)  Does not cover benefits such as: o Part A, B deductibles o Ambulance charges o Prescription drugs  Federal government pays insurance companies to provide this coverage  Must have Parts A and/or B prior to enrolling  Requires payment of an additional monthly plan premium to supplement: o Parts A and/or B o Medicare supplement plan  Coverage varies based on plan selected  Two plans, two cards, two contacts (Medicare+Part D)  Offered by insurance companies  Must have Parts A/B prior to enrolling  Requires payment of an additional monthly plan premium to supplement: o Parts A, B, D  Coverage varies, but may cover: o Part A/B deductibles and coinsurance o Foreign Emergency Travel  Doesn’t cover Rx drugs  Three plans, three cards, three contacts (Medicare + Supplement + Part D)  Federal government pays insurance companies to manage Parts A/B  These plans also include extra benefits, like: o Routine physicals o Eye exams o Preventive care  Must have Parts A/B prior to enrolling  Usually requires payment of a plan premium in addition to Part B  Some plans combine medical, hospital and prescription drug coverage  Still get Medicare card, but no need to show at doctor’s office or hospital  One plan, one card, one contact

Page 13  Part D – Medicare prescription drug coverage  Offered by health insurance companies  Available two ways:  Stand-alone plan in addition to Part A and/or B and, if desired, a Medigap plan  premium is in addition to Part B and Medigap premiums (if applicable)  Two plans, two cards, two contacts (Medicare+Part D)  As part of a Medicare Advantage plan (Part C)  no additional plan premium  One plan, one card, one contact  Can have Part A and/or B coverage to enroll  Premium does not increase based on member’s age Medicare Prescription Drug Coverage

Page 14  Part D – Medicare prescription drug coverage (cont’d)  Coverage varies based on plan selected  Lots of options and varying premiums, copays and coinsurance, so it’s important to do homework  Some Medicare prescription drug coverage includes:  mail-order pharmacy programs  open formularies (drug lists) that cover all Medicare Part D prescription drugs  closed formularies, covering limited types of Medicare prescription drugs  A penalty that increases each month may be charged if enrollment in Medicare prescription drug coverage is delayed Medicare Prescription Drug Coverage

Page 15  Medigap – Medicare supplement plans  Offered by health insurance companies to cover benefits not covered by Medicare Parts A and B – prescription drug coverage is not included – so members get:  Three plans, three cards, three contacts (Medicare + Supplement + Part D)  Must have Part B coverage and answer health questions to enroll*  Premium:  is in addition to monthly $96.40 Part B and (if applicable) Part D premiums**  increases as member ages Medicare Supplement Plans * Not required to answer health questions if enrollment occurs during the first 6 months member is both eligible for Medicare and has Part B coverage. ** Rate is for 2009 and changes annually.

Page 16  Medigap – Medicare supplement plans  All Medicare supplement plans cover:  Part A and B coinsurance not covered by Medicare  First 3 pints of blood each year  Some Medicare supplement plans also cover additional benefits, such as:  Part A and B deductibles  Skilled Nursing Facility coinsurance  Foreign Emergency Travel  Can apply for Medicare supplement plans year round! Medicare Supplement Plans

Page 17  Part C – Medicare Advantage plans  The Medicare program pays health insurance companies to provide Part A and B coverage, plus additional benefits not covered by Medicare – often including prescription drug coverage – so members can enjoy:  One plan that provides comprehensive medical, hospital and prescription drug benefits  One plan, one card, one contact  Must have Part B coverage to enroll (restrictions may apply for those with permanent kidney failure)  Premium:  is in addition to the monthly $96.40 Part B premium*  does not increase based on member’s age Medicare Advantage Plans * Rate is for 2009 and changes annually.

Page 18  Part C – Medicare Advantage plans  Plan benefits may include:  no deductibles and easy-to-budget copays for doctor and hospital visits  worldwide emergency medical coverage  annual physical, vision and hearing exams  allowances for eyewear, hearing aids and health club membership  optional dental coverage for an additional monthly premium  Medicare prescription drug coverage  With Medicare Advantage plans, the Part A and B deductibles are covered. This saves members more than $1,200 each year.  Beneficiaries may find that choosing one Medicare Advantage plan costs less than buying separate Medicare health and prescription drug plans. Medicare Advantage Plans * Rate is for 2009 and changes annually.

Page 19  Typically four types of Medicare Advantage plans:  Health Maintenance Organization (HMO)  Contracts with a provider network to offer more benefits for less  Some no longer require referrals to see specialists  Preferred Provider Organization (PPO)  Also contracts with a provider network to offer more benefits for less, with the flexibility to use out-of-network doctors and hospitals often for a higher coinsurance  Special Needs Plan (SNP)  An HMO with extra benefits, such as covered transportation to and from a hospital or doctors office, for those who receive government assistance  Private Fee-for-Service (PFFS)  No provider network, allowing use of any licensed doctor, medical specialist or hospital that is eligible to receive payment from Medicare and accepts the plan’s terms and conditions Medicare Advantage Plans

Page 20  Initial Enrollment Period (IEP) – 7-months surrounding 65 th birthday  Includes the 3 months prior to a 65th birthday, the month of a 65th birthday and the 3 months after a 65th birthday  Exception: If someone works past the age of 65, the IEP starts when they retire  Annual Election Period (AEP) – Nov. 15 through Dec. 31  Anyone eligible for Medicare can enroll in any plan(s) of their choice  New plan benefits start on January 1  Open Enrollment Period (OEP) – Jan. 1 through March 31  Allows one limited plan change to the same type of plan  Cannot pick up prescription drug coverage unless qualified for a Medicare prescription drug plan Special Election Period Medicare Advantage and Rx enrollment periods

Page 21  Special Election Period (SEP) – Year round  Begins when special exceptions to the IEP, AEP and OEP are met, such as moving out of a plan’s service area or losing employer coverage Medicare Advantage and Rx enrollment periods

Things to consider when choosing Medicare coverage. Preparing for enrollment Get ready for the next enrollment period… Tips and questions to help minimize expenses and maximize savings based on individual needs.

Page 23  Shop around – pick one or two well-respected companies, then request and read their materials, call their plan specialists and meet with a local representative  Compare each plan’s total benefits and costs  Do covered benefits offer less or more than what is needed?  Total costs include:  Monthly plan premiums (remember, most are in addition to Part B)  Deductibles (if applicable)  Copays  Coinsurance  Out-of-pocket costs for non-covered services Tips

Page 24  Does the plan have a network?  If so, what doctors and hospitals are in the plan network?  Does the plan require referrals for covered services?  How much are the plan premium and copays for routine exams?  Does the plan include medical and prescription drug coverage?  Will the plan provide coverage outside of the service area? If so, are there any restrictions, such as length of time coverage will be provided?  Is worldwide emergency medical coverage included in the plan?  Are ambulance charges covered?  Does the plan include an open or closed formulary?  open formulary – covers all Medicare Part D prescription drugs  closed formulary – covers select Medicare Part D prescription drugs Questions to ask insurance companies

Page 25  Does the plan offer savings through a mail-order prescription drug service?  Does the plan offer prescription drug coverage in the “coverage gap”? If so, what are the copays or coinsurance?  Does the plan offer extra benefits at no extra cost, such as allowances for eyewear or hearing aids?  Is there an option to add dental coverage for an additional premium?  Will the plan send reminders for routine cancer screenings and immunizations?  Does the plan include a toll-free, 24-hour line to call registered nurses?  Can a Personal Health Record be maintained online for the selected plan? Questions to ask insurance companies

Do you have any questions? For additional information, you can contact: Medicare: MEDICARE (TTY: ) or Social Security: (TDD: ) or Thank you Aetna is the brand name used for products and services provided by one or more of the Aetna group of subsidiary companies. This material is for informational purposes only and is not an offer or invitation to contract. M_LG_PR_90414©2009 Aetna Inc (4/09)