Understanding Medicare Basics with edits by Illinois SHIP

1. Understanding Medicare Basics with edits by Illinois SHIP Module 1B Module 1B Understanding Medicare, explains the basics of the Medicare program. This training module was developed and approved by the Centers for Medicare & Medicaid Services (CMS), the Federal agency that administers Medicare, Medicaid, and the Children�s Health Insurance Program (CHIP). The information in this module was correct as of June 2010. To check for updates on health care reform, visit www.healthreform.gov. To check for an updated version of this training module, please visit www.cms.gov/NationalMedicareTrainingProgram/TL/list.asp This set of National Medicare Training Program materials is not a legal document. The official Medicare program provisions are contained in the relevant laws, regulations, and rulings.Module 1B Understanding Medicare, explains the basics of the Medicare program. This training module was developed and approved by the Centers for Medicare & Medicaid Services (CMS), the Federal agency that administers Medicare, Medicaid, and the Children�s Health Insurance Program (CHIP). The information in this module was correct as of June 2010. To check for updates on health care reform, visit www.healthreform.gov. To check for an updated version of this training module, please visit www.cms.gov/NationalMedicareTrainingProgram/TL/list.asp This set of National Medicare Training Program materials is not a legal document. The official Medicare program provisions are contained in the relevant laws, regulations, and rulings.

2. November 16, 2010 2 What is Medicare? A health insurance for people 65 and older Under 65 with certain disabilities Any age with End-Stage Renal Disease (ESRD) Administration Centers for Medicare & Medicaid Services Enrollment Social Security Administration for most Railroad Retirement Board (RRB) Understanding Medicare President Lyndon Johnson signed the Medicare and Medicaid programs into law July 30, 1965. Medicaid became effective January 1, 1966, and Medicare became effective July 1, 1966. Medicare is the nation�s largest health insurance program, currently covering about 44 million Americans. Medicare is health insurance for people who are: Age 65 and older Under age 65 with certain disabilities (who have been receiving Social Security disability benefits for a certain amount of time�24 months in most cases). The 24-month Medicare waiting period does not apply to people disabled by Amyotrophic Lateral Sclerosis (ALS, known as Lou Gehrig�s Disease). People with ALS get Medicare the first month they are entitled to disability benefits. This provision became effective on July 1, 2001. Of any age who have End-Stage Renal Disease (ESRD; permanent kidney failure requiring dialysis or a transplant) While Medicare is administered by the Centers for Medicare & Medicaid Services (CMS), Social Security is responsible for enrolling most people in Medicare. The Railroad Retirement Board (RRB) is responsible for enrolling railroad retirees.President Lyndon Johnson signed the Medicare and Medicaid programs into law July 30, 1965. Medicaid became effective January 1, 1966, and Medicare became effective July 1, 1966. Medicare is the nation�s largest health insurance program, currently covering about 44 million Americans. Medicare is health insurance for people who are: Age 65 and older Under age 65 with certain disabilities (who have been receiving Social Security disability benefits for a certain amount of time�24 months in most cases). The 24-month Medicare waiting period does not apply to people disabled by Amyotrophic Lateral Sclerosis (ALS, known as Lou Gehrig�s Disease). People with ALS get Medicare the first month they are entitled to disability benefits. This provision became effective on July 1, 2001. Of any age who have End-Stage Renal Disease (ESRD; permanent kidney failure requiring dialysis or a transplant) While Medicare is administered by the Centers for Medicare & Medicaid Services (CMS), Social Security is responsible for enrolling most people in Medicare. The Railroad Retirement Board (RRB) is responsible for enrolling railroad retirees.

3. Different Parts of Medicare Medicare Has four Parts Part A: Hospital Insurance Part B: Medical Insurance Part C: Medicare Advantage HMO, PPO, Private-Fee-For-Service, Special Needs Plan Also referred to has Medicare Health Plans Part D: Prescription Drug Coverage November 16, 2010 Understanding Medicare 3

4. November 16, 2010 Understanding Medicare 4 Ways to receive Medicare

5. Social Security Administration Responsible for eligibility and enrollment People aged 65yrs or older Contributed into FICA 40 quarters (10yrs) Married and receiving benefits under a spouse�s work record Must have been married a minimum of 10yrs to receive benefits under a former spouse Under age 65yrs Receiving disability benefits under SSA or Railroad retirement systems for 24 months Any Age Receiving regular dialysis Amyotrophic Lateral Sclerosis (ALS) a.k.a Lou Gehrig�s Disease November 16, 2010 Understanding Medicare 5

6. Medicare for Disabled Individuals Disability Defined: Inability to work Expected to last for 1 year or result in death Can be the result of blindness Visual acuity 20/200 or less with correcting lens in better eye OR Visual field of 20 degrees or less Note: SSA is responsible for disability determination November 16, 2010 Understanding Medicare 6

7. Qualifying for Disability Benefits Meet requirements Definition of disability Work credits Or relationship to someone with work credits 5-month waiting period Exceptions People eligible for childhood disability benefits Some people previously entitled to disability benefits November 16, 2010 Understanding Medicare 7

8. Applying for Disability Benefits Call SSA at 800-772-1213 Necessary documentation needed Social security number Proof of age Health-care provider information Medical records Work history Including W-2 for the past two years Don�t wait to apply November 16, 2010 Understanding Medicare 8

9. Qualifying for Medicare due to Disability 24-month waiting period Exceptions for people with ALS No additional waiting period Medicare starts with first month of benefits Medicare usually begins 30th month after disability began 5 months + 24 months = 29 month wait November 16, 2010 Understanding Medicare 9

10. ESRD Disability For Medicare Coverage begins: Fourth month of dialysis First month if certain conditions are met Month you receive kidney transplant Month you are admitted to approved hospital For transplant of procedures preliminary to transplant 2 months before month of transplant If transplant is delayed more than 2 months November 16, 2010 Understanding Medicare 10

11. Enrollment Periods Initial Enrollment Period (IEP) 3month before, month of, 3months after Person�s 65th birthday 30th month for Medicare due to disability General Enrollment Period (GEP) January 1st through March 31st of each year Medicare coverage begins July 1st of same year Penalties will usually apply Special Enrollment Period (SEP) Working or covered by a working spouse Medicare Part B � 8 months from when retirement begins Medicare Part D � 63days from when retirement begins Only if already enrolled into Medicare Part A November 16, 2010 Understanding Medicare 11

12. Original Medicare Go to any provider that accepts Medicare Enrolled into Medicare Part A Premium free for most people Paid 40 quarters (10yrs) into FICA Others may be able to purchase If a U.S. citizen; or Legal U.S. resident of 5 continuous years or more Enroll into Medicare Part B Pay monthly premium Starting in 2007 some individuals have their premiums based on their taxable income Pay Part A and Part B Deductible Coinsurance or co-payment November 16, 2010 Understanding Medicare 12

13. November 16, 2010 13 Medicare Card (front) Understanding Medicare When you have Original Medicare, you use your red, white, and blue Medicare card when you get health care. This is a sample of a red, white, and blue Medicare card. The Medicare card shows the Medicare coverage (Part A hospital coverage and/or Part B medical coverage) and the date the coverage starts. Note: Your card may look slightly different from this one; it�s still valid. The Medicare card also shows your Medicare claim number. For most people, the claim number has 9 numerals and 1 letter. There also may be a number or another letter after the first letter. The 9 numerals show which Social Security record your Medicare is based on. The letter or letters and numbers tell how you are related to the person with that record. For example, if you get Medicare on your own Social Security record, you might have the letter �A,� �T,� or �M� depending on whether you get both Medicare and Social Security benefits or Medicare only. If you get Medicare on your spouse�s record, the letter might be a B or a D. For railroad retirees, there are numbers and letters in front of the Social Security number. These letters and numbers have nothing to do with having Medicare Part A or Part B. Your use of the Medicare card will differ depending on the type of Medicare health plan option you choose. If you choose Original Medicare, you will use the red, white, and blue Medicare card when obtaining health care. If you choose another Medicare health plan, your plan may give you a card to use when you get health care services and supplies. You should contact Social Security (or the Railroad Retirement Board if you receive railroad retirement benefits), if any information on the card is incorrect. When you have Original Medicare, you use your red, white, and blue Medicare card when you get health care. This is a sample of a red, white, and blue Medicare card. The Medicare card shows the Medicare coverage (Part A hospital coverage and/or Part B medical coverage) and the date the coverage starts. Note: Your card may look slightly different from this one; it�s still valid. The Medicare card also shows your Medicare claim number. For most people, the claim number has 9 numerals and 1 letter. There also may be a number or another letter after the first letter. The 9 numerals show which Social Security record your Medicare is based on. The letter or letters and numbers tell how you are related to the person with that record. For example, if you get Medicare on your own Social Security record, you might have the letter �A,� �T,� or �M� depending on whether you get both Medicare and Social Security benefits or Medicare only. If you get Medicare on your spouse�s record, the letter might be a B or a D. For railroad retirees, there are numbers and letters in front of the Social Security number. These letters and numbers have nothing to do with having Medicare Part A or Part B. Your use of the Medicare card will differ depending on the type of Medicare health plan option you choose. If you choose Original Medicare, you will use the red, white, and blue Medicare card when obtaining health care. If you choose another Medicare health plan, your plan may give you a card to use when you get health care services and supplies. You should contact Social Security (or the Railroad Retirement Board if you receive railroad retirement benefits), if any information on the card is incorrect.

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15. November 16, 2010 15 Benefit Period Part A (Hospital Insurance) charges are based on �benefit period� Inpatient hospital care and skilled nursing facility (SNF) services Begins first day of inpatient hospital care Ends when you have been out of a hospital or SNF for 60 days in a row Benefit period is not based on a calendar year You pay deductible for each benefit period No limit to number of benefit periods Understanding Medicare A benefit period refers to the way Medicare measures your use of hospital and skilled nursing facility (SNF) services. A benefit period begins the day you are admitted to a hospital as an inpatient. The benefit period ends when you have not received Medicare-reimbursed hospital or skilled nursing care for 60 days in a row. If you go into the hospital after one benefit period has ended, a new benefit period begins. You must pay the inpatient hospital deductible ($1,100 in 2010) for each benefit period. There is no limit to the number of benefit periods you can have. A benefit period refers to the way Medicare measures your use of hospital and skilled nursing facility (SNF) services. A benefit period begins the day you are admitted to a hospital as an inpatient. The benefit period ends when you have not received Medicare-reimbursed hospital or skilled nursing care for 60 days in a row. If you go into the hospital after one benefit period has ended, a new benefit period begins. You must pay the inpatient hospital deductible ($1,100 in 2010) for each benefit period. There is no limit to the number of benefit periods you can have.

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18. Paying the Part B Premium Taken out of one of the following monthly payments: Social Security Railroad Retirement Federal Government Retirement For information about premiums Call SSA or RRB Office of Personnel Management if a retired Federal employee Will be billed every 3 months If not receiving SSA or RRB benefits November 16, 2010 Understanding Medicare 18

19. Medicare Penalties Part A Penalty will only apply if a beneficiary has to purchase Medicare Part A 10% a year for twice the number of years Example: Mrs. Robinson has delayed enrollment into Part A for 2 years, her penalty will be 10% a year for 4 years. Part B If a person delayed enrollment into Part B, their penalty will be 10% for each year and will remain with them for as long as they are on Medicare Example: Ms. Debbie has delayed enrollment into Part B for 3 years, she will have to pay a 30% penalty including her monthly premium for as long as she is on Medicare. November 16, 2010 Understanding Medicare 19

20. Medicare Supplement Insurance November 16, 2010 Understanding Medicare 20 This section explains Medicare Advantage and other Medicare plans. This section explains Medicare Advantage and other Medicare plans.

21. 2010�s MedSup Policy � Core Benefit Core Benefits for Plans A, B, C, D, F, G, M, N include: All Part A coinsurance expenses for : $283 per day for 61st through 90th day; $566 per day for 91st through 150th day; Part A Hospice coinsurance Upon exhaustion of Part A hospitalization benefits, full coverage of an additional 365 days per lifetime; Part B coinsurance or copayment; including Part B Preventive Services First three pints of blood each calendar year *Core benefits for Plan K and L are the same as listed above with the exception of 50% (Plan K) and 75% (Plan L) payment for the Part A deductible, Part B coinsurance, the blood deductible, hospice care coinsurance and Skilled Nursing Facility coinsurance. November 16, 2010 Understanding Medicare 21

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23. What is a MedSup Policy? Health insurance policy Provided by private insurance companies Used with �Original Medicare� only Must have both Medicare Part A and Part B Covers the major gaps in Medicare Medicare-approved charges All policies are standardized Each policy will be identical from company to company Except in Massachusetts, Minnesota, and Wisconsin November 16, 2010 Understanding Medicare 23

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25. High Deductible Option Another variation of a Medicare Supplement Policy offered is a �high-deductible option� Offered only with a standardize Plan F Plan will not pay it�s portion of benefits until deductible has been met $2,000 in 2011 Deductible is adjusted each year November 16, 2010 Understanding Medicare 25

26. What is a MedSelect Policy? Health Insurance Policy Provided by private insurance companies Used with �Original Medicare� only Must have both Medicare Part A and Part B Covers the major gaps in Medicare Medicare-approved charges Conforms to the Standardize plans Each policy will be identical from company to company Except in Massachusetts, Minnesota, and Wisconsin Must use specific hospital contract with MedSelect plan For inpatient hospital services May have to use specific physicians Must live within 30 miles of a contracted hospital November 16, 2010 Understanding Medicare 26

27. Medicare Supplement Open Enrollment One-time 6-month window Have or enrolling into Part A Enrolling into Part B for first time Including those enrolling due to disability Cannot be denied a policy Join any plan from any company May require a pre-existing condition waiting period No more than 6 months November 16, 2010 Understanding Medicare 27

28. Medicare Disabled Beneficiary Illinois Public Act 95-0436 Began June 1, 2008 Provided same open enrollment rights for Medicare Supplement Insurance 6 months Open Enrollment Period (OEP) upon entitlement to Medicare Part B To purchase any policy from almost any company, regardless of health history Company cannot charge a rate higher then their highest rate Registered with the Illinois Department of Insurance Once a beneficiary turns 65 yrs-old, they will be entitled to a new 6 months OEP November 16, 2010 Understanding Medicare 28

29. Medicare Disabled Beneficiary2011 Guarantee Enrollment Period Guaranteed enrollment for disabled Medicare beneficiaries - November 15 through December 31 Guaranteed issue of a Medigap with 3 companies AARP/ United Healthcare, Blue Cross Blue Shield, and Health Alliance. November 16, 2010 Understanding Medicare 29

30. Rights and Guarantees Loss of Medicare Supplement Company pulls out of the market Must be provided with another policy Loss of other coverage Employer group health plan 63-day Guaranteed Issue May purchase Plan A, B, C, F, K or L Medicare Advantage (MA) Leave MA plan with first 12 months of first enrollment Plan is pulled from the market November 16, 2010 Understanding Medicare 30

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32. What is Secondary Insurance? Secondary insurance is other insurance that is provided by Employment sponsored health and/or drug coverage Retirement health and/or drug coverage Union sponsored health and/or drug coverage Not offered by or contracted with Medicare Company may choose; Who they will cover How and what coverage will be offered if it will provide any additional coverage for Medicare beneficiaries Note: Medicare beneficiaries should contact their benefits office to see how it will work with Medicare. November 16, 2010 Understanding Medicare 32