Unit 20: Medicare & Medicaid

Question 1

Who does Medicare pay a large portion of health care bills for?

Answer 1

Persons who,
•are 65 or older
•have end-stage renal disease (kidney failure)
•have been receiving social security benefits for at least 24 months

Question 2

How does one qualify for Medicare?

Answer 2

•must be “fully insured” according to social security
•qualification requires accumulating at least 40 credits, which are earned by generating a minimum amount of work-related income over at least the past 10 years & paying social security (FICA) taxes

Question 3

Who is Medicare funded by?

Answer 3

•the centers for Medicare & Medicaid services (CMS), which is a branch of the department of health & human services (HHS)
•private healthcare insurance companies process medical claims for Medicare and are known as Medicare administrative contracts (MAC)

Question 4

What is the initial enrollment for Medicare?

Answer 4

•7-month period
•begins 3 months before the month an individual turns 65
•includes the month they turn 65
•ends 3 months after the month they turn 65

Question 5

What are the 4 parts of Medicare coverage?

Answer 5

•Part A-covers hospital, skilled nursing facility, hospice, & home health care
•Part B-covers medical care provided by physicians & other medical services
•Part C-covers health care delivered by managed care plans
•Part D-covers prescription drugs

Question 6

What is the enrollment for Medicare Part A?

Answer 6

•for people age 65 & covered by social security, free & automatic on the first day of the month that they reach age 65
•people not covered by social security may obtain Part A coverage under certain circumstances by paying a premium

Question 7

Medicare Part A inpatient hospital coverage

Answer 7

•90 days per benefit period
•new benefit period starts 60 days after discharge
•additional 60 lifetime reserve days
•deductible per benefit period-after deductible Medicare pays 100% of first 60 days
•patient pays co-pay per day for days 61 through 90
•patient pays a higher daily co-pay for lifetime reserve days

•for a semi-private room & the other usual charges for necessary hospital care: meals, supplies, medical services, drugs, etc.
•does NOT cover: physician or surgeon charges, private duty nursing, the first 3 pints of blood (the “blood deductible”-total combined deductible that must be met, including any blood received under Part B), charges for a phone, TV, or other non-medical services

•based on “benefit periods” rather than the calendar year
—>begins when someone is admitted to the hospital and ends 60 days after discharge
—>if the person is re-admitted within 60 days of discharge, it does not start a new benefit period but is a continuation of the initial one

For each benefit period, inpatient hospital coverage & cost-sharing amounts are as follows:
•the patient pays a deductible, which changes annually (remember the deductible applies per benefit period, NOT per calendar year)
•days 1 through 60-fully paid by Medicare (after the deductible)
•days 61 through 90-Medicare pays most of the cost, and the patient pays a daily co-pay amount which changed each year

•for stays over 90 days, the patient may draw upon 60 lifetime reserve days
•the daily co-pay for lifetime reserve days is double that of days 61 through 90
—>this co-pay amount also changes each year

Question 8

How does Medicare cover skilled nursing facilities (SNFs)?

Answer 8

•medical treatment
•following a hospital stay of at least 3 days
•100 days of coverage
—>Days 1-21 100% paid by Medicare
—>Days 21-100 daily co-pay paid by patient

•skilled nursing facility (SNF)-for people that need round-the-clock medical care provided by licensed nurses, but do not need the secure care provided by a hospital
•covered by Medicare if:
-it is a Medicare-approved facility
AND
-the SNF stay begins immediately after release from a hospital stay of at least 3 days

^^if these conditions are met,
•days 1 through 20-fully paid by Medicare
•days 21 through 100-Medicare pays most of the cost & the patient pays a daily co-pay amount which changes each year
•after day 100, Medicare pays nothing

Question 9

What home health care is covered by Medicare Part A?

Answer 9

Covers:
•visits (not round-the-clock care) by a home health aide to provide medical services such as part-time nursing care & physical, occupational, or speech therapy
•80% of the cost of durable medical equipment such as hospital beds or wheelchairs

Does NOT cover:
•meals
•homemaker services such as shopping, cleaning, & laundry

Question 10

Hospice care

Answer 10

•for terminally ill patients & their families
•includes counseling, pain relief, & symptom management
•may also include “respite care”-care provided temporarily in a hospice facility for a patient who is normally cared for in the home-the respite is for the usual caregivers

Question 11

What is excluded from Medicare Part A?

Answer 11

Medicare Part A does NOT cover:
•first 3 pints of blood
•private duty nursing
•non-medical services
•intermediate care
•custodial care

Question 12

What is the enrollment for Medicare Part B?

Answer 12

•monthly premium that increases with income level
•annual open enrollment
—>January 1 through March 31 each year
—>coverage effective July 1

•individuals who enroll in Medicare Part A are automatically enrolled in Part B unless they request otherwise
•Part B is optional & requires a monthly Part B premium
—>Part B premium is tied to an individual’s income level & is deducted from the social security monthly benefit check

•if Part B enrollment occurs before the month an individual reaches age 65, coverage begins on the first day of that month (same as Part A coverage)
•if an individual initially declines Part B enrollment, they can enroll during the general enrollment period that occurs each year from January 1 through March 31 & coverage begins on the following July 1

Question 13

What is covered under Medicare Part B?

Answer 13

3 general minds of medical services:
•inpatient & outpatient physician services
•home health care (if not covered by Part A)
•outpatient medical services & supplies

Also covers:
•physical, occupational, & speech therapy
•medically necessary ambulance service
•prosthetics
•drugs that cannot be self-administered

**some preventive care is covered as well

Question 14

What preventive care is covered by Medicare Part B?

Answer 14

•an initial routine physical examination within the first 6 months of enrollment
•screening tests for cholesterol, diabetes, & colorectal cancer
•annual mammograms (age 40 & over), Pap tests, pelvic examinations, & clinical breast exams for women
•annual prostate cancer screenings for men age 50 & over
•glaucoma testing once every 12 months
•bone mass measurements for qualified individuals
•flu shots

Question 15

What are the cost-sharing amounts for Medicare Part B?

Answer 15

•annual deductible that changes each year & a 20% coinsurance
•any part of the 3-pint blood deductible that has not been met under Part A must be met under Part B

Question 16

What is the claims process for Medicare?

Answer 16

•Medicare determines what the reasonable charge is for a particular service & the patient must pay the different if the actual charge is more-unless the doctor or supplier agrees to accept assignment
—>means that the doctor or supplier will accept Medicare’s approved amounts as full payment & cannot legally bill the patient for anything above the amount
—>doctors & suppliers are not required to accept assignment

•if Medicare decides that an expense is medically unnecessary, the patient must pay the entire cost

•if a doctor has not accepted a Medicare assignment, the bill is sent directly to the patient
—>they must fill out a Medicare claim form with the itemized bills including the date & place of treatment, description of treatment, & the doctor’s name
—>the form & accompanying documents are sent to the Medicare carrier for the patient’s area
—>upon receiving the claim, the carrier sends the patient a form called Explanation of Medicare Benefits-that itemizes the services covered & the approved payment for each service

Question 17

What is excluded from Medicare Part B?

Answer 17

Medicare Part B does NOT cover:
•routine foot, vision, dental, or hearing care
•most immunizations
•most outpatient prescription drugs
•physician charges above Medicare’s approved amount
•private-duty nursing
•cosmetic surgery (unless needed to repair an accidental injury)
•most care received outside the US
•expenses inferred as a result of war or act of war

Question 18

What is Medicare Part C?

Answer 18

•called “Medicare Advantage”
•Medicare contracts with & pays private companies
•enrollee’s medical expenses paid by the private plan
•enrollee must be enrolled in Medicare Part A & B
•private company may charge the enrollee a fee
•may provide outpatient drug coverage

Question 19

What are the 4 types of Medicare Advantage plans?

Answer 19

1. Medicare managed care plans
2. Medicare preferred provider organization (PPO) plans
3. Medicare private fee-for-service (PFFS) plans
4. Medicare specialty plans

Question 20

What are Medicare managed care plans?

Answer 20

•operate like health maintenance organizations (HMOs) or point-of-service (POS) plans
•care must be obtained from the plan’s network of providers under the direction of a primary care physician who acts as a gatekeeper
•enrollees may have to pay a small co-pay per doctor visit, but they do not have to lay Medicare deductibles & coinsurance amounts
•often cover services not covered by original Medicare, such as routine physical exams, prescription drugs, vision care, & dental care

Question 21

What are Medicare preferred provider organization (PPO) plans?

Answer 21

•have a network of providers, but no gatekeeper
•enrollees pay more of their costs if they go outside the plan’s network

Question 22

What are Medicare private fee-for-service (PFFS) plans?

Answer 22

•plan negotiates the fees that providers will be paid
•operate on a fee-for-service basis like original Medicare, but rather than using the fees established by Medicare, a private company negotiated the fees that providers will be paid

Question 23

What are Medicare specialty plans?

Answer 23

•focus on the particular needs of defined groups of patients, such as those who are eligible for both Medicare & Medicaid, or those with a certain medical condition like kidney failure or diabetes

Question 24

What is Medicare Part D?

Answer 24

•prescription drug coverage
•purchased from a private company
•Medicare pays the private company
•private company pays the drug store
•premium charge-reduced by income level
•annual deductible
•25% coinsurance

•makes prescription drug coverage available to people covered by Medicare
•individuals with Parts A & B can obtain this coverage by signing up with a stand-alone prescription drug plan (PDP) & beneficiaries pay the following cost:
-a monthly premium-high-income beneficiaries may pay a relatively higher premium
-an annual deductible with a maximum amount-not all PDPs have a deductible, or charge the maximum deductible
-25% coinsurance-until total expenditures reach the threshold amount for the coverage gap

•(beginning in 2020) once the insured reaches the coverage gap, they will pay no more than 25% of the cost for the plan’s covered brand-name prescription drugs & generic prescription drugs
—>prior to the Affordable Care Act, the insured paid 100% of the cost in the coverage gap

Question 25

Medicare & employer group health coverage

Answer 25

•individual age 65+ may be covered by a group health plan & Medicare
•size of employer & whether individual is still employed/retired determines which plan is primary

Employer with less than 20 employees:
•Medicare is primary

Employer with 20+ employees:
•group plan is primary for employees
•Medicare is primary for retirees

-for individuals under age 65 & on Medicare because of a disability or end-stage renal disease-employer plan is primary if it’s a large group health plan covering at least 100 employees
—>Medicare would be primary if the group is not a large group health plan

Question 26

What is Medicare supplement insurance?

Answer 26

•called “medigap” policy
•sold by private companies
•can help pay some health care cost that original Medicare doesn’t cover like co-pays, coinsurance, & deductibles
•designed to fill the gaps in original Medicare Parts A & B
•a commercial coverage designed to pay some of the medical expenses that the original Medicare leaves to the beneficiary
•illegal for anyone to sell a Medicare supplement policy to a person who is in a Medicare advantage plan (Medicare Part C)
•standardized into 10 different plans
•core benefit Plan A
—>must cover hospital co-pays for days 61-90 & lifetime days
—>adds an additional 365 days of coverage to a benefit period-covered at 100%
—>covers Medicare part B coinsurance
—>must be offered if company sells any Medicare supplement plans
—>does NOT cover Parts A & B deductibles

Question 27

Which is a commercial coverage designed to pay some of the medical expenses that the original Medicare leaves to the beneficiary?

Answer 27

Medicare supplement insurance

Question 28

What are the Medicare disclosure requirements?

Answer 28

•a buyer’s guide must be given to all applicants for a Medicare supplement policy at the time of application or upon delivery of the policy
•applicants must also be given an outline of coverage that describes the policy’s principal coverage & benefits, premium, renewal provisions
•first page of the policy must contain:
-“notice to buyer-this policy may not cover all of your medical expenses”
-prominent notice of 30-day free look period
-policy’s renewal provision including a description of any premium increases that may be involved

Question 29

What are the required provisions for Medigap policies?

Answer 29

•must be at least guaranteed renewable
•must be automatically adjusted for changes in Medicare
•may not duplicate benefits provided by Medicare
•must have a 30-day free look period
•pre-existing conditions limitations may not longer than 6 months from the date of issue

Question 30

If a medigap policy is replaced, what must the applicant be given?

Answer 30

•a refund of unearned premium on the replaced policy
AND
•credit under the new policy for any time elapsed under the pre-existing condition provision of the replaced policy

Question 31

What are the Medigap regulations?

Answer 31

•must be given an NAIC buyer’s guide
•30-day free look
•guaranteed renewal
•guaranteed acceptance if bought within 6 months of enrollment in Medicare Part B
•cold lead advertising not allowed
•sales commissions cannot exceed 200% of renewal commissions
•renewal commissions must be level in years 2-5
•replacement sales commissions cannot be greater than the new policies renewal commission
•if allowed, preexisting conditions cannot be excluded for more than 6 months

Question 32

What is Medicare SELECT?

Answer 32

•coverage offered through a restricted provider network
•similar to a managed care plan
•insurers may NOT sell Medicare SELECT policies to individuals outside the network service area
•policyholders must have the option to switch to a Medigap policy without a restricted provider network

Question 33

What is Medicaid?

Answer 33

•health coverage for the poor
•regardless of age
•a person can be covered by Medicare & Medicaid
•funded by state & federal government

•to receive Medicaid, a person must qualify for either:
-temporary assistance for needy families (TANF-generally called welfare)
OR
-supplemental security income (SSI)-assistance program for people living at or near the poverty line who are age 65 or over, blind, or disabled

•for those who qualify, Medicaid covers most health care costs, including hospital & doctor bills & custodial care in a nursing home
•Medicaid is also required by law to pay Medicare premiums, deductibles, & coinsurance for Medicare-eligible Medicaid patients

Question 34

A coverage offered through a restricted provider network, like a managed care plan, is known as _______?

Answer 34

Medicare SELECT

Question 35

What are the Medicare Part B deductibles?

Answer 35

•annual
•change each year

Question 36

When does the annual general enrollment period for Medicare part B begin?

Answer 36

January 1