About Medicare and Changes in 2013 Presented by Nancy A. Dykeman, CLTC, CSA for Society of Certified Senior Advisors ®

Agenda Common misconceptions Differences among Medicare Parts A, B, C and D; Medigap Enrollment Medicare: 2013 changes Valuable resources

Common Misconceptions “Medicare is free and covers everything.” “Medicare Part A with a Medigap policy is enough.” “I can enroll in Medicare whenever I want to.” My doctor will tell me what I need for Medicare coverage.” “Medicare will cover my long-term care.”

What Seniors Are Saying... “I turn 65 next year and I’m counting on my Medicare to replace my current insurance. There are so many moving parts to Medicare, I’m confused.” “Where would I find information to help me understand my Medicare insurance benefits?”

Benefits of Understanding Medicare CSAs –  Learn and share knowledge; guide seniors to resources  Increase client loyalty and trust  Assist their own families

Seniors – Make better decisions for their health care, short- and long-term

Medicare - Since 1965… Changes in coverage Increasing premiums More out-of-pocket expenses Added prescription drug coverage Healthcare Reform Do you think things might keep changing?

REPORT AIR DATE: March 4, 2013 Access to Doctors Shrinks for Some Medicare Patients In an interview conducted by Ray Suarez, PBS Correspondent with Dr. Lou Goodman, who is the CEO of the largest state medical society in the US, the Texas Medical Association, Dr. Goodman said, “In 2000, we had about almost 80 percent of the doctors were taking new Medicare patients. We just completed a survey last year, and we found that less than 60 percent were taking them. Almost 20 percent fewer doctors are taking new Medicare patients. And that really troubled us.”

What is Medicare? Medicare is health insurance for people: Age 65 or older Under age 65 with certain disabilities Any age with End-Stage Renal Disease (ESRD) -- permanent kidney failure requiring dialysis or a kidney transplant

Medicare’s Goal To make it easy for you to get the highest quality health care at the most affordable price. To transform itself from a program which simply pays the bills to a program which actively supports a high quality health care system.

Medicare: A Handful of Coverage! Part A = Original Medicare (your thumb) hospitalization, rehab Part B = Doctors, outpatient services (first finger) Part C = Advantage Plans including A, B and Part D (middle finger) Part D = Prescription Drug Coverage (ring finger) Medigap = Pays deductibles and co- pays (little finger)

Part A – Your Thumb Part A is hospitalization insurance for inpatient care, including:  Inpatient Hospitalization  Inpatient skilled nursing facility  Hospice care  Some skilled home health care Medically necessary and reasonable treatments

Part A continued Must show significant improvement or become ineligible for more coverage Entitlement program; majority of beneficiaries do not pay premiums

Part A + Employer Plan For seniors who continue to work: Comprehensive Both plans pay; one is primary provider Employer plan covers Part A co- pays and deductibles, regardless of who the primary provider is

Small Group Plans <20 Less than 20 employees Medicare is primary, employer plan is secondary, both are billed When a person has an employer plan from their employer or spouse’s employer they should usually enroll in Part B to cover out of pocket costs.

Large Group Health Plans >20 More employees The large employee group plan is considered the primary with Medicare secondary. If the employee has group coverage or is covered by a spouse’s plan they may not need Part B

Which Plan Pays First? At the time claim is submitted -- Employer plan administrator Health care provider Medicare... Determine which plan is the primary coverage based on Medicare rules

2013 Part A Costs Most people don’t pay a Part A premium because they paid Medicare taxes while working. If you don’t get premium-free Part A, you pay up to $441 each month depending on how many “credits” you have for working.

2013 Hospital Stay You pay $1,184 deductible per benefit period $0 for the first 60 days of each benefit period $296 per day for days of each benefit period $592 per lifetime reserve days after day 90 of each benefit period (up to a maximum of 60 days over your lifetime)

2013 Skilled Nursing You pay $0 for the first 20 days of each benefit period $148 per day for days of each benefit period All costs for each day after day 100 of the benefit period

Enrollment in Parts A and B Initial Enrollment Period You can sign up for Part A and/or Part B during the 7-month period that begins 3 months before the month you turn 65, includes the month you turn 65, and ends 3 months after the month you turn 65. If you sign up for Part A and/or Part B during the first 3 months of your Initial Enrollment Period, in most cases, your coverage starts the first day of your birthday month. However, if your birthday is on the first day of the month, your coverage will start the first day of the prior month. If you enroll in Part A and/or Part B the month you turn 65 or during the last 3 months of your Initial Enrollment Period, your start date will be delayed.

Automatically Enrolled If you’re already getting benefits from Social Security or the Railroad Retirement Board (RRB), you’ll automatically get Part A and Part B starting the first day of the month you turn 65. (If your birthday is on the first day of the month, Part A and Part B will start the first day of the prior month.) If you’re under 65 and disabled, you’ll automatically get Part A and Part B after you get disability benefits from Social Security for 24 months or certain disability benefits from the RRB for 24 months.

General Enrollment If you didn’t sign up for Part A and/or Part B (for which you must pay premiums) when you were first eligible, you can sign up between January 1–March 31 each year. Your coverage will begin July 1. You may have to pay a higher Part A and/or Part B premium for late enrollment.

Special Enrollment If you didn’t sign up for Part A and/or Part B when you were first eligible because you're covered under a group health plan based on current employment (your own, a spouse's, or a family member’s if you're disabled), you can sign up for Part A and/or Part B Anytime you're still covered by the group health plan. During the 8-month period that begins the month after the employment ends or the coverage ends, whichever happens first.

Part B – First Finger Medically necessary services  Doctor services  Preventive care  Durable medical equipment  Home “health” care  X-rays, Labs, Ambulance services  Therapy (PT, OT, ST)

2013 Part B Costs Monthly Premium You pay a Part B premium each month. Most people will pay the standard premium amount. However, if your modified adjusted gross income as reported on your IRS tax return from 2 years ago is above a certain amount, you may pay more.

2013 Part B File Individual Tax Return $85,000 or less File Joint Tax Return $170,000 or less $ per month Individual above $85,000 up to $107,000 Joint above $170,000 up to $214,000 $146.90per month Up to $ max. for above $428,000 joint income

Part C – Middle Finger Called Medicare Advantage Plans Cover Parts A and B plus provide additional coverage Offered by private companies Voluntary program; Part C premiums (if any) are paid directly to plan provider; senior must still pay Part B premiums, too

Part C - Medicare Advantage continued More coverage than Parts A and B, especially preventive services Vision exams and eyeglasses Dental Health and wellness programs Rx (most include Medicare drug prescriptions)

Think of Part C as brick and mortar…Parts A & B are at the left entrance, all services in the middle building and you enter from the right entrance to access services.

2013 Part C Visit to get plan premiums. You can also call MEDICARE ( ). TTY users should call You can also call the plan or your State Health Insurance Assistance Program

Enroll or Change Part C If you want to enroll in, withdraw from, or switch your enrollment in a Medicare Advantage (Medicare Part C) plan, you're allowed to do so -- without any restrictions from the insurance companies based on your age or health history -- during what's called "open enrollment." When you have open enrollment depends on what you want your next coverage to be. Medicare Advantage (Medicare Part C) plan

Part D – Ring Finger Prescription Drug Plan – 2004 Must have Parts A and B Private companies sell plans Must live in plan’s service area

Medicare Part D Plans vary in cost and coverage by State - this means that if you move to a new State during the enrollment year, you may pay a different premium and/or possibly may not have access to the same selection of Medicare Part D plans.

Medicare-PartD-Overview-by- State.php Good overview List of states Find plans

Enrollment in Part D People who are new to Medicare have a seven (7) month period (called an Initial Enrollment Period) to enroll in a Medicare Part D or Medicare Advantage plan. This window begins 3 months before your month of eligibility, and includes your month of eligibility and three months thereafter. Example: If you turn 65 on July 13th. Your month of Medicare eligibility is July. Your Initial Enrollment Period (IEP) is April to October. If you were to enroll between April 1 and June 31, your plan would take effect on July 1. If you enroll between July 1 and October 31, your plan would take effect the first day of the month after you enroll.

Late Enrollment or Changes To switch from one Medicare Advantage plan to another, the open enrollment period runs from October 15 to December 7, 2012, for coverage in Leave Medicare Advantage for Medicare Part A and Part B To withdraw from a Medicare Advantage plan and return to traditional Medicare Part A and Part B, you may do so from January 1 to February 14, If you do, and your Medicare Advantage plan covered prescription drugs, during the same period you may also enroll in a Medicare Part D prescription drug plan.Part APart BMedicare Part D

2013 Part D Premiums Figured on Yearly Income in 2011 File Individual Tax Return $85,000 or less File Joint Tax Return $170,000 or less, Pay Your Plan Premium above $85,000, depending on income, up to a max of $66.60 plus your plan premium

Part D Costs Plans vary in cost and drugs covered Co-pays or coinsurance Deductibles Monthly premiums Drug costs Voluntary program; senior pays premiums out-of-pocket or premiums are included in Part C Medicare Advantage Plan

Part D continued Initial Deductible (2013) $325 Initial Coverage Limit $2,970 Out of Pocket Threshold $4,750 Coverage Gap (donut hole) begins once you reach $2,970 and ends when you spend a total of $4,750 Part D enrollees will receive a 50% discount on total cost of brand name drugs while in donut hole and a maximum of 79% co-pay on generic drugs while in the coverage gap.

Medigap – Little Finger Also called Medicare Supplement Plans Sold by private insurance agents MUST have Parts A and B to buy Covers only 1 person

Medigap – Little Finger continued Helps pay costs that Parts A and B don’t:  Co-pays  Coinsurance  Deductibles Voluntary program; senior pays for it

Medigap Plans continued 10 Standardized plans – A through N A is basic coverage; more in the others, some offer out-of- country coverage, most popular to cover most costs is plan F.

Medigap plans are sold by private insurers. Rates for the plans vary by insurer and state, but federal rules require that all plans with the same letter must offer the same coverage.

Medigap Plans continued Cost varies Don’t need a Medigap plan if you have a Part C Medicare Advantage plan

Purchasing Medigap Policy You have a one-time 6-month Medigap Open Enrollment Period which starts the first month you’re 65 and enrolled in Part B. This period gives you a guaranteed right to buy any Medigap policy sold in your state regardless of your health status. You will be underwritten if you change plans.

Medicare Case Study To get more personalized information refer to the handout.

Observations by Kaiser Family Foundation “Annual growth in Medicare spending is largely influenced by the same factors that affect health spending in general: increasing prices of health care services, increasing volume and utilization of services, and new technologies. In the past, provider payment reforms, such as the hospital prospective payment system, have helped to limit the growth in Medicare spending. Moving forward, system-wide efforts to curtail overall health care costs would help to improve Medicare’s financial outlook. There is general agreement among policymakers and experts that changes are needed to ensure the long-term viability of the Medicare program, but little consensus on how best to do so.”

New in 2013 Medicare now covers depression screenings, screenings and counseling for alcohol misuse and obesity, behavioral therapy for cardiovascular disease, and more.

If you reach the coverage gap (donut hole) in your Medicare prescription drug coverage (Part D), you’ll pay only 47.5% for covered brand-name drugs and 79% for generic drugs. Medicare

Last Thoughts… Median age: total: 37.1 years male: 35.8 years female: 38.5 years (2012 est.) This entry is the age that divides a population into two numerically equal groups; that is, half the people are younger than this age and half are older. It is a single index that summarizes the age distribution of a population. Source: CIA World Factbook - Unless otherwise noted, information in this page is accurate as of February 21, 2013CIA World Factbook

Life Expectancy In the late 1800s American men and women had about equal life expectancies of 40 to 48 years. It depends on gender and geography. In the U.S., women live longer—81 years on average, 76 for men—but a recent study by the Institute for Health Metrics and Evaluation reveals a promising trend. While women gained 2.7 years from 1989 to 2009, men are catching up, gaining 4.6 years.

Long-Term Care -- Does Medicare Cover It? Part A – Partially; only skilled, not custodial care Part B – No Part C – No Part D – No Medigap Supplement Plans - No

Valuable Resources MEDICARE Medicare & You 2013 Handbook /Pubs/pdf/10050.pdf Where to Get Your Medicare Questions Answered

Thank you. Nancy A. Dykeman, President Long-term Care Planning Consultants, LLC Lady’s Island, South Carolina