If you are turning 65 in the next few months, you have choices to make concerning your Medicare coverage.  Are you still working and have employer coverage? Will you consider enrolling in a Medicare Advantage plan? Do you think a Medicare Supplement will be better coverage?

Here is some information to get started in understanding your Medicare choices:

MEDICARE ONLY: You will be responsible for the Part A hospital deductible ($1,100 ). You will pay the Part B deductible ($155). You will be responsible for 20% of the cost for doctor visits and services, lab tests, emergency room treatment, ambulance, chemotherapy, radiation therapy, physical therapy, and most medical care you receive outside a hospital.  THERE IS NO CAP TO YOUR 20% CO-INSURANCE.   The Medicare Part B premium is $110.50 per month.

MEDICARE SUPPLEMENTS: These work with your Medicare to give you more complete coverage. Also known as “Medigap ” plans, these fill the gaps in Medicare. A Medicare Supplement Plan F will generally leave you with no medical bills because Medicare will pay first and your Plan F Medicare Supplement will pay the balance after Medicare has paid.  I always say, “think FULLEST coverage when you think of PLAN F”.

Medigap plans are named by letters: A, B, C, D, F,  G, K, L, M, N   and each one covers the gaps in a slightly different way. Because F offers the fullest coverage, it has the highest monthly premium.  Plans M and N are new in June.  Plan N is very much like Plan F except you will pay a $20 co-pay for doctor appointments, $50 for an emergency room visit, and $155 for the Part B deductible. Because of these co-pays, the monthly premium for Plan N is generally 25% less than Plan F.

Medigap plans in Arizona cost between $85 per month for Plan N and $129 per month for plan F.  A Plan F is exactly the same from company to company, except that the premium will differ from company to company.

MEDICARE ADVANTAGE:  These are private Medicare plans offered by insurance companies - and they replace your Medicare. If you enroll in an Advantage plan, you won’t use your Medicare card because Medicare doesn’t pay your bills.  You will use the card given to you by your Medicare Advantage (MA) plan and your MA plan will pay your bills.  Many MA plans in Arizona have a $0 premium, though you must pay your Medicare Part B premium ($96.40 or $110.50/month). You will have co-pays for every medical service. For example, you might pay $15 when you see your primary care physician.  And you might pay $45 to see a specialist. Then there are hospital co-pays, emergency room co-pays, co-pays for labs, x-rays and other services.

Almost half of all Medicare beneficiaries in Maricopa, Pinal, and Pima counties are enrolled in these private Medicare plans. People like them because they usually include a Part D drug plan. Most have a monthly premium between $0 and $60.  The premium is low because these plans almost always involve a local network (HMO or PPO) – and because Medicare pays a lot of money to the insurance companies to provide your Medicare coverage.  Most Advantage plans offer free gym memberships.

Most Medicare Advantage plans have a network of doctors and hospitals, and you must stay in the network.  Most Advantage plans are HMO’s which require you to have a primary care physician who gives you referrals to specialists. Most plans will require you to get prior authorization for certain tests, treatments, and hospitalization (except in an emergency situation).  If you do not follow all the rules, bills will not be paid by the plan.  Each MA company has different co-pays, rules, and networks – though many doctors are contracted with multiple MA plans.

PART D: This is the drug plan which Medicare wants you to have (and pay for). If you get a Medicare Supplement you should also sign up for stand-alone Part D plan.   Part D is offered by insurance companies that are contracted with Medicare.  In Pima county there are 46 Part D plans to choose from and each has a different monthly premium and a different formulary (list of drugs covered).

Part D premiums range from $17 to $70 per month.  Before signing up for a plan, you need to be sure your drugs are covered by that plan and what your co-payment will be.  If you are enrolling in a Medicare Advantage plan, Part D usually comes with the plan.  But you still must make sure all your drugs are covered and what your co-pay will be.

FOR MORE INFORMATION ON YOUR MEDICARE CHOICES, CHECK OUT THIS VIDEO, “AN INTRODUCTION TO YOUR MEDICARE CHOICES”.

PS:  If you are working for a large employer and have group health insurance, you won’t need to use your Medicare or pay the Part B premium.  Your employer must keep you and your spouse on the group health plan.

Many seniors are struggling with health care costs and co-pays for their prescription drugs.  Many do not realize they can get help. I have met quite a few people whose Social Security check is less than $1,200 per month who did not realize they qualify for some really important help from the state of Arizona and Social Security.

An individual with a monthly income of $1,238 or less can get help from a program called  “Medicare Cost Sharing”. The monthly income limit for a couple is about $1,659. This program is for seniors and people under 65 who are on Social Security Disability and Medicare.

Here’s how it works: A person on Medicare fills out an AHCCCS form and provides proof of income or where it comes from.  (AHCCCS is Medicaid in Arizona.) This proof can be the annual letter from Social Security that shows how much a person receives and how much is being taken out for the Part B premium and any other charges, such as a Part D premium to an insurance company.  Sometimes bank statements may need to be provided.

For someone turning 65 soon, an AHCCCS application should be submitted about one month before Medicare will begin.

Here’s the help: Once approved for the Medicare Cost Sharing program, the state will pay the person’s part B premium, which is $96.40 per month (or $110.50 if you are new to Medicare this year). The state will also pay the Part D premium, up to about $20.00 per month. Then Social Security provides a subsidy to help with prescription costs, so the person will pay only $6.30 for a one-month supply of even the most expensive brand name drugs. Generics would cost $2 per month.

Another important benefit is that people getting this help do not have a “doughnut hole” in their drug plan. This is the gap in Part D plans during which the plan stops paying for drugs and the person must pay 100% of the cost – until $4,050 has been spent.

Some people qualify for help with their drug costs, but not the state’s help with their Medicare Part B premium.  People who have monthly income of  less than $1,354 (for a single person) or $1,821 (for a couple) can get help with their Part D premium and their prescription costs.  This help is received through an application to Social Security.

I’ve heard that over 25% of seniors who qualify for help are unaware of these assistance programs. Having $96 more to spend each month is a big help. But the drug cost help can be the difference between choosing to take needed prescriptions and having money to buy food.  So spread the word.

FYI:  AHCCCS stands for Arizona Health Care Cost Containment System and is pronounced “access”.

Forms can be found on-line at: http://www.azahcccs.gov

Pima Council on Aging can also help: 694-0418.

Or email me at medicareblog@gmail.com

The Health Care Reform law will benefit 1.3 million Arizona residents who do not currently have insurance.  For the 281,000 residents who have non-group insurance, reform will allow them to get affordable coverage through the health insurance exchange.

These numbers and more are provided on the Department of Health and Human Services website that shows how many people in each state will benefit from health care reform.

The site provides information specific to Arizona.

Under reform in Arizona:

• 1.3 million residents who do not currently have insurance and 281,000 residents who have non-group insurance could get affordable coverage through the health insurance exchange.
• 746,000 residents could qualify for premium tax credits to help them purchase health coverage.
• 853,000 seniors can receive free preventive services. (Begins in 2010.)
  
• 151,000 seniors will have their brand-name drug costs in the Medicare Part D “doughnut hole” halved. (2011)
  
• 63,700 small businesses could be helped by a small business tax credit to make premiums more affordable. (2010)

Proposals implemented in 2010 and 2011 will produce real benefits for:

• FAMILIES: The 6.5 million residents of Arizona will benefit as reform:
  • Ensures consumer protections in the insurance market. Insurance companies will no longer be able to place lifetime limits on the coverage they provide, use of annual limits will be restricted, and they will not be able to arbitrarily drop coverage.
  • Creates immediate options for people who can’t get insurance today. 8 percent of people in Arizona have diabetes, and 25 percent have high blood pressure – two conditions that insurance companies could use as a reason to deny health insurance coverage. Reform will establish a high-risk pool to enable people who cannot get insurance today to find an affordable health plan.
  • Ensures free preventive services. 36 percent of Arizona residents have not had a colorectal cancer screening, and 19 percent of women over 50 have not had a mammogram in the past two years. Health insurance reform will ensure that people can access preventive services for free through their health plans. It will also invest in a prevention and public health fund to encourage prevention and wellness programs.
  • Supports health coverage for early retirees. An estimated 111,000 people from Arizona have early retiree coverage through their former employers, but early retiree coverage has eroded over time. A reinsurance program will stabilize early retiree coverage and provide premium relief to both early retirees and the workers in the firms that provide their health benefits.  This could save families up to $1,200 on premiums. (Begins in 2010.)
• SENIORS: Arizona’s 853,000 Medicare beneficiaries will benefit as reform:
  • Lowers premiums by reducing Medicare’s over-payments to private plans. All Medicare beneficiaries pay the price of excessive over-payments through higher premiums – even the 68 percent of seniors in Arizona who are not enrolled in a Medicare Advantage plan. A typical couple in traditional Medicare will pay nearly $90 in additional Medicare premiums next year to subsidize these private plans. Health insurance reform clamps down on these excessive payments.