Unit 20 - Medicare and Medicaid

Question 1

Medicare pays a large portion of the health care bill for persons who:

Answer 1

• are age 65 or over;
• have end-stage renal disease (kidney failure); or
• have been receiving Social Security disability benefits for at least 24 months.

Question 2

Fully Insured

Answer 2

To be covered by Medicare, and individual 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 and paying Social Security (FICA) taxes.

Question 3

Medicare is fully funded by

Answer 3

The Centers for Medicare & Medicaid Services (CMS), which is a branch of the Department of Health and Human Services (HHS).

Private healthcare insurance companies process medical claims for Medicare and are known as Medicare Administrative Contractors (MAC).

Question 4

Initial enrollment for Medicare

Answer 4

The initial enrollment for Medicare is a 7 month period that begins three months before an individual turns 65, includes the month they turn 65, and ends three months after the month they turn 65.

Question 5

Medicare coverage is divided into 4 parts

Answer 5

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

Question 6

Enrollment - Medicare

Answer 6

For people age 65 and covered by Social Security, enrollment in Medicare Part A is automatic on the first day of the month that they reach age 65 and is free.

People not covered by Social Security may obtain Part A coverage under certain circumstances by paying a premium.

Question 7

Part A - Inpatient Hospital Coverage

Answer 7

Coverage is for a semi-private room and the other usual charges for necessary hospital care; meals, supplies, medical services, drugs (taken as an inpatient) and so on.

Not covered:

• physician or surgeon charges
• private duty nursing
• the first three pints of blood (blood deductible)
• charges for phone, tv, non-medical services

Question 8

Part A - Benefit Periods

Answer 8

Inpatient hospital coverag is based on benefit periods rather than the calendar year. A benefit period 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.

Question 9

Part A - Hospital Benefit Period Coverage and Cost-Sharing amounts

Answer 9

• the patient pays a deductible, which changes annually (but remember the deductible applies per benefit period, not calendar year)
• days 1-60 - fully paid by Medicare (after the deductible)
• days 61-90 - Medicare pays most of the cost, and the patient pays a daily co-pay amount which changes each year.
• over 90 days - the patient may draw upon 60 lifetime reserve days. The daily co-pay for llifetime reserve days is double that of days 61 through 90. The co-pay amount also changes each year.

Question 10

Skilled Nursing Facility (SNF) Care

Answer 10

A SNF is for people that need round-the-clock medical care provided by licenses nurses, but does not need the acute care provided by a hospital.

* Facilities that only provide intermediate medical care or custodial care and so is not a skilled nursing facililty, Intermediate Care and Custodial Care is NOT covered by Medicare

Question 11

Medicare covers skilled nursing facility if:

Answer 11

• it is a Medicare-approved facility; and
• the SNF stay begins immediately after release from a hospital stay of at least three days.

Question 12

Skilled Nursing Facility - Medicare cost sharing amounts

Answer 12

• day 1-20 - fully paid by Medicare; and
• days 21-100 - Medicare pays most of the cost and the patient pays a daily co-pay amount which changes each year.
• after 100 days - Medicare pays nothing.

Question 13

Part A Home Health Care covers:

Answer 13

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

DOES NOT PAY FOR:

• meals; or
• homemaker services such as shopping, cleaning, and laundry

Question 14

Hospice Care

Answer 14

Is for terminally ill patients and their families. It includes counseling, pain relief, and symptom management

Question 15

Medicare Part A does not cover:

Answer 15

• first 3 pints of blood
• private duty nursing
• non-medical services
• intermedate care; or
• custodial care

Question 16

Medicare Part B Enrollment

Answer 16

• Individuals who enroll in Part A are automatically enrolled in Part B unless they request otherwise.
• Part B is optional and requires a monthly Part B premium
• The premium is tied to an individual’s income level and is deducted from the Social Security monthly benefit check.
• Enrollment occurs same as Part A.
  
  • If an individual initially declines Part B enrollment, they can enroll during the general enrollment period which occurs each year from January 1 - March 31, and coverage begins on July 1.

Question 17

Medicare Part B Coverage

Answer 17

1. inpatient and outpatient physician services, home health care (if not covered by Part A)
2. outpatient medical services and supplies
3. physical, occupational, and speech therapy, medically necessary ambulance service, prosthetics, and drugs that cannot be self-administered

Some preventative care is included:

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

Question 18

Medicare Part B Cost-Sharing Amounts

Answer 18

• Annual deductible that changes each year and also a 20% coinsurance.
• Any part of the three pint blood deductible that has not been met under Part A must be met under Part B.
• No stop loss

Question 19

Medicare Part B Claims Process

Answer 19

• Medicare determines what the reasonable charge is for a particular service, and the patient must pay the difference if the actual charge is more, unless the doctor or supplies agrees to accept assignment.
• If they accept assignment they will accept Medicare’s approved amounts as full payment and cannot legally bill the patient for anything above that amount.
  
  • If a doctor doesn’t accept assignment, the bill is sent directly to the patient.
    
    • The patient must fill out claim forms, with itemized bills, with date, place of treatment, description of treatment and doctor’s name.
    • After the form is received by Medicare the carrier sends the patient a form called Explanation of Medicare Benefits that itemizes the services covered and the approved payment for each service.
• If Medicare decides an expense is medically unnecessary, the patient must pay the entire cost.

Question 20

Medicare Part B Exclusions

Answer 20

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; and
• expenses incurrect as a result of ware or act of war

Question 21

Distinction from Parts A and B

Answer 21

• They were signed into law in 1965 and are referred to as the Original Medicare, both operate on a fee-for-service basis
• In the 1990s, Medicare Part C, “Medicare Advantage” was enacted
  
  • Private companies contract with Medicare to provide Medicare benes with their Part A and B coverage, and some additional benefits, for usually an additional cost. Many Medicare Advantage plans include prescription drug coverage
• Medicare benes can choose to receive their benefits from a Medicare Advantage plan but they still must enroll in Part A and B, pay the Part B premium, and pay the Medicare Advantage plan premium

Question 22

Four types of Medicare Advantage Plans

Answer 22

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 23

Medicare Advantage - Medicare Managed Care Plans

Answer 23

• HMO or POS
• Gatekeeper
• Care must be obtained fromthe plan’s network of providers
• Enrollees may have to pay a co-payment per doctor visit

Question 24

Medicare Advantage - Medicare Preferred Provider Organization (PPO) Plans

Answer 24

• No gatekeeper
• More cost if outside of network

Question 25

Medicare Advantage - Medicare Private Fee-For-Service (PFFS) Plans

Answer 25

• Plan negotiates the fees that providers will be paid

Question 26

Medicare Advantage - Medicare Specialty Plans

Answer 26

• These plans focus on a particular needs of defined groups of patients; certain medical conditions such as kidney failure or diabetes.

Question 27

Medicare Part D

Answer 27

• 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

Question 28

Medicare and Employer Group Health Coverage

Answer 28

• Employers with less than 20 employees
  
  • Medicare is primary
• Employers with 20 or more employees
  
  • Group plan is primary for employees
  • Medicare is primary for retirees
• Medicare eligible individuals under age 65
  
  • Group plan is primary if a large group plan

Question 29

Medicare Supplement Insurance

Answer 29

“Medigap” is sold by private companies, can help pay some of the health care costs that original Medicare doesn’t cover, like co-payments, coinsurance, and deductibles.

It is illegal for anyone to sell a Medicare supplement policy to a person who is in a Medicare Advantage Plan (Part C).

Question 30

Disclosure

Answer 30

• NAIC - A Guide to Health Insurance for People with Medicare, must be given to all applicants for Medicare Supplemtn policy at the time of application or upon the delivery of the policy
• Applicants must also be given an Outline of Coverage that describes the policy’s principal coverage and benefits, premium, renewal provisions
• The first page of the policy must contain:
  
  • the words Notice to Buyer-this policy may not cover all of your medical expenses
  • prominent notice of the 30-day free look period; and
  • the policy’s renewal provision including a description of any premium increases that may be involved.

Question 31

Required Provisions

Answer 31

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

Question 32

Medigap Replacement

Answer 32

The applicant must sign Notice to Applicant Regarding Replacement of Medicare Supplemental Insurance when a Medigap policy is replaced. A copy is given to the applicant and to the insurer.

When Medigap policy is replaced, the applicant must be given:

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

Question 33

Medicare SELECT

Answer 33

coverage offered through a restricted provider network, like a managed care plan.

Question 34

Medicaid

Answer 34

A government insurance program for persons of all ages whose income and resources are insufficient to pay for health care.

Funded jointly by the state and federal government, managed by the state and the state establishes the eligibility guidelines.