1. About Medicare and Changes in 2012 Presented by Nancy A. Dykeman, CLTC, CSA for Society of Certified Senior Advisors ®

2. Agenda Common misconceptions Differences among Medicare Parts A, B, C and D; Medigap Enrollment Medicare: 2012 changes Valuable resources

3. 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.”

4. 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?”

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

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

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

9. Bailing out of Medicare? July 6, 2011 Article by Paula Span “Dr. Tara Bishop, an internist and assistant professor of public health at Weill Cornell Medical College in New York analyzed data from a survey of 4,112 physicians practicing in private, nonhospital offices and accepting new patients from 2005-2008. (today, based on her findings) ‘Well over 90 percent of doctors, in all kinds of specialties, still take new Medicare patients.’ Based on patient surveys…a small proportion have trouble when they seek a new primary care physician. Access problems might be greater in certain geographic areas and doctors might accept Medicare patients only in limited numbers. “

10. 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

11. 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.

13. Medicare: A Handful of Coverage! Part A = Original Medicare (your left 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)

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

15. Part A continued Must show significant improvement Outpatient therapy  Speech-language  Occupational and physical Entitlement program; majority of beneficiaries do not pay premiums

16. 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

17. 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

18. Part B – First Finger Medically necessary services  Doctor  Outpatient care  Other medical services  Preventive services Voluntary plan; monthly premium paid by deduction from Social Security check

19. 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

20. 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)

21. 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

22. 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

23. Part D continued Initial Deductible (2012) $320 Initial Coverage Limit $2,930 Out of Pocket Threshold $4,700 Coverage Gap (donut hole) begins once you reach $2,930 and ends when you spend a total of $4,700 Part D enrollees will receive a 50% discount on total cost of brand name drugs while in donut hole and a maximum of 86% co-pay on generic drugs while in the coverage gap.

24. 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

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

26. Medigap Plans continued 11 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.

27. Medigap plans are sold by private insurers. There are 11 sets of currently available coverages: A, B, C, D, F, G, K, L, M, and N. Four discontinued plans--E, H, I, and J--are still available to people who had the plans before they were closed. 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.

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

29. Medicare Case Study Deciding if you want Original Medicare or a Medicare Advantage Plan

30. When to Enroll or Change Your Medicare, Medigap Plans Part A and Part B enrollments  Automatic  Initial  General  Special Part C Medicare Advantage Plans Part D Prescription Drug Medigap Supplemental Plans

31. Annual Changes in Medicare All parts of Medicare  New premiums  New limits New plans added Where to learn more: www.medicare.gov www.medicare.gov

32. Part A in 2012 Monthly Premium $0 if senior paid at least 40 credits in employment taxes to Social Security during working years (or is a spouse or widow/er of such a person) * $451 for less than 30 credits * Approximately 99% of beneficiaries. (Centers for Medicare and & Medicaid Services)

33. Part A in 2012 continued HOSPITAL- Each benefit period, you pay: Deductible: $1,156 for a hospital stay of 1-60 days Coinsurance for a hospital stay:  $289 per day Days 61-90  $578 per day Days 91-150 (Lifetime Reserve Days) All costs for each day beyond 150 days in a benefit period. Can have more than one benefit period in a year

34. Part A in 2012 continued SKILLED NURSING FACILITY Each benefit period, you pay: Coinsurance $0 Days 1-20 $144.50 per day Days 21-100 All costs for each day after day 100 in a benefit period. Can have more than one benefit period in a year

35. Part B in 2012 Premium based on annual income Most pay $99.00 monthly * Social Security withholds their Part B premium and their incomes are:  Individual: $85,000 - $170,000 ($139.90)  Joint: $170,000 to $214,000 ($139.90) * Approximately 73% of beneficiaries. (Centers for Medicare & Medicaid Services)

36. Part B in 2012 continued Depending on income for singles and couples the higher the income over $85,000 for an individual and $170,000 for a couple may pay up to $319.70 a month. Source: www.medicare.gov

37. Part B in 2012 continued Deductible: $140 annually Coinsurance or co-pay: Seniors pay these amounts for most doctor services, durable medical equipment, outpatient mental health care, and other services Coinsurance (another carrier); co-pay (cash out-of-pocket)

38. Part C in 2012 Medicare Advantage Plans Premiums vary depending on provider and plan – some are $0 Pays out-of-pocket costs for:  Co-pays  Coinsurance  Deductibles Don’t need a Medigap Plan

39. Part D in 2012 Premium Depends on the drugs you take Depends on your State

40. Future of Medicare “ A bsent fundamental reforms, over the next two decades the average American household’s health-care spending, including the portion of its taxes that pays for Medicare and Medicaid, will go from 23% to 41% of average household income... Michael Levitt Former Secretary of Health and Human Services

41. Medicare Future continued “ The projected date of Health Insurance (HI) Trust Fund exhaustion is 2024, five years earlier than estimated in last year’s report, at which time dedicated revenues would be sufficient to pay 90 percent of HI costs. The drawdown of Social Security and HI trust fund reserves and the general revenue transfers into SMI will result in mounting pressure on the Federal budget. In fact, pressure is already evident. For the sixth consecutive year, a "Medicare funding warning" is being triggered, signaling that projected non-dedicated sources of revenues -- primarily general revenues -- will soon account for more than 45 percent of Medicare’s outlays. That threshold was in fact breached for the first time in fiscal 2010.” A SUMMARY OF THE 2011 ANNUAL REPORTS Social Security and Medicare Boards of Trustees

42. Last Thoughts… In 1965 America’s median age was 28.4, now it is 35.3 years. The average life expectancy is age 80 (men and women combined) Ratio of workers to seniors has steadily declined; number of seniors living long enough to have 5 or more chronic conditions -- 23% of Medicare beneficiaries -- has increased Source: George Will, The Washington Post

43. 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

44. Valuable Resources 1-800-MEDICARE www.medicare.gov Medicare & You 2012 Handbook http://www.medicare.gov/Publications /Pubs/pdf/10050.pdf Where to Get Your Medicare Questions Answered

45. Thank you.