What Employers and Employees Need to Know About Medicare Legislation and Eligibility Presented by, Jeff Johnson RHU, CEBS Brown and Brown Insurance

WHY?  Longer Life Span  Reduced Savings  Increasing Health Insurance Costs  Enjoy Working

A Brief History

 1945 Truman introduced a national health insurance plan.  1965 Johnson signed legislation. Truman is the first to enroll. Part B premium is $3 per month.  1972 eligibility for disabled and ESRD. Payments to HMOs Authorized.

A Brief History  1983 DRGs, payment to hospitals established. Civilian federal employees eligible.  1984 remaining federal employees eligible.  1988 Major overhaul of Medicare. Catastrophic and prescription benefits added.

A Brief History  1989 Major overhaul repealed.  1992 payments to physicians established  2003 MMA

A Brief History  MMA, The bill passed , 5:30AM Added D Removed Rx from Medigap plans Added Inflation Adjustments to B ded. Added Initial Preventive care to B B premium based on income Added HSA Survey - Health Care for All Americans

Benefits

 Original Medicare Part A Hospital Part B Physicians Part D Prescription Drug (Medigap Policy)

Benefits  Part C - Medicare Advantage  Former name - Medicare + Choice  HMO  PPO  PFFS  MSA Part D Prescription Drug Enrollment 15% WA, 23% OR, 29% CA

Benefits  New Premiums for Medicare B based on Income!  If your income is above $80,000 (single) or $160,000 (married couple), then your Medicare Part B premium may be higher than $93.50 per month

Benefits  MMA Inflation Adjustment - Deductibles A$912 $952$992 B$110*$124$131 C D$250$265* *first inflation adjustment

Medicare's Future

 Budget Busting Currently comprises 13 percent of federal spending By 2030, the Congressional Budget Office projects it will consume nearly a quarter of the budget. Medicare Unfunded Liability 4 Times greater than SS Unfunded Liability

Fiscal Wake up tour  David Walker, Comptroller General of the United States and Director of the Government Accountability Office,  Robert L. Bixby of The Concord Coalition  Diane Lim Rogers of The Brookings Institution  Alison A. Fraser of The Heritage Foundation  Bi-partisan discussion

Fiscal Wake up tour  Seattle  November 29, 2006  Noon-1:30, Westin Hotel 

Eligibility & Enrollment Entitled = eligible and enrolled

Eligibility  Age 65  Disease ESRD (enacted 1972) ALS (enacted in 2001)  Disability (enacted 1972) SS Elimination period of 5 months On SS Disability for 24 months

Eligibility  Federal Retirement timeline 59.5 Can Start Withdrawal IRA, 401(k) 62 Can Start SS Early 65 Medicare (Today-80% males retired) 67 SS Normal 70 SS Max 70.5 Must Start Withdrawal Traditional IRA, 401(k)

Enrollment  Enrollment time line for Employees Initial, General, Special Covered in next segment  Medicare Supplement (timing) Traditional Medicare Covered in next segment

What Employers Need to Know

 TEFRA-Tax Equity and Fiscal Responsibility Act of 1982  Employers must offer their age 65+ employees with a current employment status, or the spouses of their employees, the same primary health care coverage as their younger employees

What Employers Need to Know  TEFRA  Applies to Employers with 20 FT or PT employees

What Employers Need to Know  TEFRA  Coordination of Medicare and Employer provided medical benefits Employers plan pays FIRST* Medicare plans pays SECOND Medigap plan pays THIRD

What Employers Need to Know  Coordination of Medicare and Employer provided medical benefits  *Some exceptions Less then 20 employees Medicare pays first ESRD Employers plan pays first for 30 months then Medicare pays first after 30 months of Medicare eligibility or entitlement Group plan pays first for Multi-Employer plans that request an exception

What Employers Need to Know  Medicare Secondary Payer (MSP) demand letters.  Such a letter is usually sent because Medicare may have made primary payments for services furnished to Medicare beneficiaries that it believes should have been the primary payment responsibility of the group health plan.

What Employers Need to Know  Medicare and COBRA If you already have group health coverage under COBRA when you enroll in Medicare, COBRA ends. If you elect COBRA coverage after you enroll in Medicare, you can keep your COBRA continuation coverage

What Employers Need to Know  Creditable Coverage Annual Notice to Medicare eligible employees  Notice to all employees Disclosure to CMS  Internet

Resources  “Who Pays First” CMS Publication # pages  s/Pubs/pdf/02179.pdf s/Pubs/pdf/02179.pdf

Resources  “Enrolling in Medicare” CMS Publication # pages Look up - The Special Enrollment Period for Medicare Part B, Medicare and Group Health Plan Coverage.  s/Pubs/pdf/11036.pdf s/Pubs/pdf/11036.pdf

Resources  “Choosing a Medigap Policy” CMS publication # pages Look up – I am over age 65 and still working (or covered under my spouse’s health plan)  s/Pubs/pdf/02110.pdf s/Pubs/pdf/02110.pdf

Resources  Washington State Office of the Insurance Commissioner has a great publication:  “Retirement and your Health Insurance” Review the section on retiring after age 65.  tions/consumer/RetireGuide.pdf tions/consumer/RetireGuide.pdf