Medicare & Medicare Plan Options

Medicare A, B, C, D's & More!

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Medicare Eligibility

Medicare is a Federal Health Insurance program available to US Citizens who are either age 65 or older or who  are between the ages of 18 & 64 and have a qualifying disability and have been receiving social security disability payments for 24 consecutive months.  In order to qualify the individual must have accumulated 40 quarters of work in their lifetime either through their own work or a combination of their own work and their spouses work during their lifetime.  Medicare is also open to people of all ages with Lou Gehrig's disease (ALS) or End Stage Renal Disease.

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Medicare Plan Options

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Medicare Part A (Hospital Insurance)

Medicare Part A Hospital Insurance is administered by the Federal Government.  This insurance is premium free to those who qualify with 40 quarters of work history.  The Insurance coverage under Part A in 2024 has a recurring deductible every 60 days that must be met before Medicare pays it's share of the costs.  This deductible is $1,632 in 2024.  This DOES NOT include any physician services while you are in this hospital as Part A only pays for room and board and any hospital equipment used during your stay.

Medicare will cover up to 150 days of hospitalization during your lifetime.  For Days 61-90 there is also a daily co-payment of $408.  For Days 91-150 there is a co-payment of $816 per day.  After Day 150 you would pay 100 percent of the costs as Medicare Hospital coverage would be exhausted.

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Medicare also covers some limited Skilled Nursing Care under Part A.  For Days 1-20 there is a $0 co-payment.  For Days 21-100 there is a $204 co-pay per day.  After 100 days Medicare will no longer pay for Skilled Nursing care.

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Medicare Part A also covers Home Healthcare & Hospice at $0 cost if treatment is deemed Medically necessary and is approved.

There is no out of pocket maximum spending limit under Original Medicare Part A.

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Medicare Part B (Medical Insurance)

Medicare Part B is also administered by the Federal Government and helps with cost of outpatient medical care like doctor visits, surgery, lab services, ambulance, emergency room and some preventive care.  It DOES NOT included any coverage for dental, vision, hearing, over the counter items, prescription drugs, foreign travel or annual physical exams.  There is a monthly premium cost for Part B coverage.  In 2024 the standard Part B premium is $174.70 per month.  This can be higher for people who earn more than $103,000 per year (individuals) or $206,000 (married couples).  There are ways to lower this premium using certain Medicare Advantage plans that offer a Part B premium reduction or by qualifying for the income based Medicare Savings program.  Part B coverage, when administered by the Federal Government also has an annual deductible in 2024 of $240 before Medicare Part B starts to pay it's share of the costs.  Once the annual deductible is met then Medicare typically pays 80% of the cost, while the member is then responsible for 20% of the cost.

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There is no maximum out of pocket spending limit for Part B under Original Medicare.

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Medicare Part C (Medicare Advantage Plans)

Medicare Part C, also knowns as Medicare Advantage is an alternative to Original Medicare Parts A & B.  Medicare Part C plans are administered by Private Health insurance companies that are approved by Medicare.  Each month, Medicare pays a fixed amount of money to the Insurance companies offering Medicare Part C plans.  The insurance company then takes on all of the expenses of the Medicare member instead of Original Medicare.  Medicare Part C plans must cover all of the same services of Original Medicare, but may choose to offer more to attract new members.

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Most plans include extra benefits such as dental, vision, hearing, over the counter, fitness & wellness programs and many plans also include Medicare Part D prescription drug coverage.  Some plans may offer a Part B premium reduction where the plan pays all or a portion of your Medicare Part B premium on your behalf.  This is also known as a "Giveback Benefit".  Most Medicare Part C plans also offer either $0 or lower co-pays for Medical services and can come with $0 or reduced deductibles.  Plans vary by what county you live in and some plans may even have $0 monthly plan premium while others pay carry a Part C premium in addition to your Medicare Part B premium.  

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In order to join a Medicare Advantage plans you must have both Medicare Part A & Medicare Part B and live in the service area where the plan is offered.  You can join a Medicare Advantage plan even if you have a Pre-Existing condition.

All Medicare Part C plans include an annual out of pocket spending limit for your protection and piece of mind.

Medicare Advantage Plan Types

There are many types of plans available but we will focus on the most common types (PPO, HMO, Special Needs)

Medicare PPO Plans

In a Medicare Advantage PPO plan, members can choose their own doctors and don't need referrals to see a specialist.  You are able to see any provider who accepts Medicare and who agrees to accept the plan's terms and conditions for payment.  If you stay in the plan's network you will pay less in out pocket costs or sometimes $0.  If you use a provider who is not part of plan's network you will still have coverage but you will typically pay a higher out of pocket cost.  There are some PPO plans called "Parity PPOs" where the costs can be almost the same whether you are in-network or out of network but the majority of PPO plans are "Traditional PPO's" where staying in the network is more cost effective.

 

All Medicare Part C plans include an annual out of pocket spending limit for your protection and piece of mind.

Medicare HMO Plans

In a Medicare HMO plan, members MUST use the plan's network for covered services with the exception of Emergency room and Urgent care.  If a member uses an out of network provider for non-emergency or non-urgent care without prior plan approval they will be responsible for all costs.  Typically HMO plans have lower out pocket costs than PPO plans but they have less flexibility.  Some HMO plans may require a referral to see a specialist.  These are called "closed HMOS".  Other HMO plans may be more flexible and not require referrals.  These are called "Open access HMOs".  Some HMO plans may also offer a "Point of Service" (POS) option where some services may be available out of network for a higher cost.

All Medicare Part C plans include an annual out of pocket spending limit for your protection and piece of mind.

Medicare Special Needs Plans (SNP)

Another type of Medicare Part C plan is called a Medicare Special Needs plan or SNP.  These plans offer specialized care to the populations they serve and every SNP includes Medicare Part D prescription coverage.  The plans limit their membership to specific populations so in addition to needing to have both Medicare Parts A & B and living in the service area of the plan you will also need to meet additional criteria to qualify for a SNP. 

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There are 3 types of SNPs and they all have different qualifying criteria.  Let's take a look below:

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1.) Dual Eligible Special Needs Plans (D-SNP)

These plans are designed specifically for members who have both Medicare & also qualify for state Medicaid.  The plans typically have $0 out of pocket costs and may offer many extra benefits such as grocery allowance, utility & rental assistance, transportation and many other services. 

2.) Chronic Special Needs Plans (C-SNP)

These plans are designed for people who have specific chronic conditions such as diabetes, heart failure, COPD and End Stage Renal Disease among other conditions.  They are tailored to meet the needs of the populations they serve with specialized health and wellness programs designed to help manage chronic health conditions.

3.) Institutional Special Needs Plans (I-SNP)

These plans are designed for people who live in an institution such as a nursing home or assisted living center.  They are tailored specifically to meet the needs of this population.

All Medicare Part C plans include an annual out of pocket spending limit for your protection and piece of mind.

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Medicare Part D (Prescription Drug Coverage)

Medicare Part D prescription drug coverage is administered by Private Health insurance companies and can be obtained 1 of 2 ways.  You can get Medicare Part D through a Medicare Advantage plan, usually at no extra cost to you or you can purchase a stand alone Part D prescription drug plan to add to Original Medicare for an additional monthly premium.  Stand alone drug Plans vary by state & Medicare Advantage Prescription Drug plans (MAPD plans) vary by county.

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In each Medicare Prescription Drug plan there are several "coverage phases".  Let's go through those below:

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Phase 1 Deductible Stage

Some Medicare Drug plans have $0 Annual Deductible.  This means that coverage starts immediately, while other plans may carry an Annual Deductible amount that members must pay before their prescription drug insurance kicks in.  The maximum deductible for a Part D plan in 2024 is $545.  Some plans may apply this deductible to all drugs while other plans may only apply the deductible to certain name brand drugs. 

Phase 2 Initial Coverage (Co-Pay stage)

Once the deductible has been met (if there is one) the member moves into the second stage of coverage known as "Initial Coverage" or the "Co-Pay stage".  During this stage the insurance company pays it's share of the share of the costs and the member pays a co-pay.  The amount of the co-pay depends on what "Tier" the drug is in.  Let's look at an example of the "Tier system" below:

Tier 1 (Preferred Generic Drugs) $0 co-pay

Tier 2 (Non Preferred Generic Drugs) $5 co-pay

Tier 3 (Preferred Brand Name Drugs) $47 co-pay

Tier 4 (Non Preferred Brand Name Drugs) $100 co-pay

Tier 5 (Specialty Drugs) 33% co-insurance

Phase 3 Coverage Gap (Donut Hole)

Once the total cost of the member's drugs exceeds $5,030 (both the member's co-pays & the insurance companies costs combined) the member enters the Coverage Gap or "Donut Hole" portion of the insurance.  This is where the member pays 25% of the cost of all medications until the member reaches a total of $8,000 in out of pocket drug costs for the calendar year.

Phase 4 Catastrophic Coverage

Once the member reaches this stage in 2024 they will have $0 out of pocket costs for prescription drugs for the rest of the calendar year.

Hospital Indemnity Plans

Hospital Indemnity plans are a great fit for someone with a Medicare Advantage plan that has a daily Inpatient Hospital co-pay.  For a monthly premium typically much lower than that of a Medicare Supplement plan, members can obtain often the same degree or close to the same degree of hospital out pocket protection between what their Medicare Advantage plan pays and what the Hospital Indemnity plan pays.  It also typically easier to qualify for a Hospital Indemnity plan than a Medicare Supplement plan because of the less stringent underwriting requirements.

Some Hospital Indemnity insurance carriers have also added additional rider options to pay for things like physical therapy, ambulance and even cancer coverage.

You will need to pass medical underwriting to be approved for a Hospital Indemnity plan with some exceptions.

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Critical Illness Plans

Critical Illness plans can either be purchased as a rider on a Hospital Indemnity plan or as a separate stand alone plan.  They typically work well alongside a Medicare Advantage plan that may leave some small gaps in its coverage such as out of pocket co-pays and co-insurance for cancer treatment.  The member can choose a specified dollar amount of money to be reimbursed up to should they incur expenses from the specific critical illness that is covered under their policy.  The most popular types of plans offered are Cancer insurance plans and some companies also offer coverage for conditions such as stroke & heart attack.  Premiums for these plans are typically low since the coverage is limited to a specific illness or condition. 

Critical Illness plans are not guaranteed issue so you will need to pass medical underwriting to be approved.

Medicare Supplement Plans (Medigap)

Medicare Supplement plans (also known as "Medigap") plans, are secondary insurance plans designed for someone who has chosen Original Medicare Parts A & B as their primary Medicare insurance.  Medicare Supplement plans are typically lettered A-N and each plan has it's own level of coverage.  The plans are generally designed to help pick up some of the deductibles and out of pocket co-insurance left behind by Original Medicare Parts A & B.  Some plans include limited foreign travel benefits but the plans NEVER include Part D prescription drug coverage and do not pay for any services that Original Medicare Parts A & B doesn't cover so there is no dental, vision, over the counter, hearing benefits etc on a Medicare Supplement plan.  The most comprehensive plan is Plan G, which after the $240 annual Part B deductible has been met by the member will pay the 20% con-insurance that Part B leaves behind for Medical Coverage and will also cover the recurring Part A Hospital Deductibles and co-pays.  Other plans like Plan N and Plan K for example may have co-pays for doctor visits or may not pay all of the Part A Hospital Deductible.  All Medicare Supplement plans have premiums and none of them will reduce your Part B premium.  You must continue to pay your Part B premium in addition to the Medicare Supplement premium in order to remain covered.

This is generally a more costly route to take but it can work for people without strong provider networks in rural areas and those people who want access to any doctor that accepts Original Medicare.

There are some Medicare Supplement plans called "Medicare Select" plans that use specific provider networks similar to an HMO plan, usually available for a lower premium.

You will need to pass medical underwriting to be approved for a Medicare Supplement plan with some exceptions

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Extra Help with Medicare Costs

People with limited income and resources may qualify for extra help with some Medicare out of pocket costs.  Let's take a look below at some of the programs available and what benefits they offer.

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• State Pharmaceutical Assistance Programs (SPAP)

Some states may offer a "state pharmaceutical assistance program" or SPAP that can help lower prescription drug costs for it's members.  Most plans work an integrated manner with Medicare Part D & Medicare Advantage plans and after the plan pays first the SPAP will pay as secondary insurance, lowering the member's co-pays.

 JW Senior Insurance can guide you to your local SPAP and if you are a client of ours we can help you enroll into the SPAP as well.  Give us a call at 609-496-8030 for more information.

• "LIS" Limited Income Subsidy (Part D costs)

Limited Income Subsidy or "LIS" is available to apply for through the social security administration.  There are income & asset requirements that need to be met in order to qualify for this assistance.  The assistance helps with Medicare Part D premiums, deductibles and co-pays. 

Visit the social security website here to apply

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• Medicare Savings Program (Part B premium)

The Medicare Savings Program pays the full amount of the Medicare Part B premium for those who qualify.  It DOES NOT pay any Medicare Part A or Part B deductibles or co-insurance or any Medicare Part C co-pays.  It is simply Medicare Part B premium assistance. 

For more information visit here

• Medicaid

Medicaid Benefits vary by state in terms of income & asset requirements in order to qualify but Medicaid in general for those who are "Dual Eligible" for both Medicare & Medicaid helps pay any co-pays, co-insurance, deductibles or premiums associated with Medicare Parts A, B, C & D.  Medicaid may also offer extra benefits like dental, vision, transportation, long term care in nursing home and other care management programs.

To find out more information on Medicaid in your state visit here

• Private Assistance Programs

Contact us here at JW Senior Insurance at 609-496-8030 to find out more information about private patient assistance programs that may be able to help you lower your out of pocket prescription drug costs and out of pocket medical costs.  Many organizations including drug manufacturers, non-profit organizations, and other private assistance programs may be available to you.  We will do our best to search for a program that may be able to help you.

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Medicare Enrollment Periods

Initial Enrollment Period (Initial "Election" Period)

When a person first becomes eligible for Medicare, this is called their "Initial Election Period" (IEP) or "Initial Coverage Election Period (ICEP).  During this time an individual can first determine if they want to keep Medicare Part B and then also determine which Medicare Part C or Medicare Part D plan they would like to choose.  The enrollment window begins 3 months before either the 65th birthday or 24 month of social security disability payments.  It also runs through the month of entitlement plus 3 months after the 65th birthday or 24 month of disability payments, accounting for a 7 month window for an individual to choose a plan.  If no plan is chosen then the individual would need to wait until the next qualifying enrollment period to choose a plan.

Medicare Annual Enrollment Period (Oct 15-Dec 7, each year)

Every year between October 15th and December 7th, people with Medicare can choose to enroll in a Medicare Part C and/or Medicare Part D plan for coverage beginning January 1st of the following year.  Individuals may also drop their Medicare Part C or Part D plan or switch from one Medicare Part C or Part D plan to another.

Medicare Advantage Open Enrollment Period (Jan 1-March 31, each year)

Every year between January 1st and March 31st, individuals who are enrolled in a Medicare Part C (Medicare Advantage) plan can make changes to their coverage.  They are able to add or drop prescription drug coverage by switching from an MA only plan to an MAPD plan or an MAPD plan to an MA only plan.  Individuals can also switch from "like to like" plans, meaning they can switch from 1 MA only plan to another or they can switch from 1 MAPD plan to another.  Members can also decide to drop their Medicare Part C plan and return to Original Medicare and may also choose to add a stand alone Part D prescription drug plan (PDP) if they want to.

Special Enrollment Periods (SEP, aka "Life Events")

There are also times outside of the regular enrollment periods that individuals can make changes to their coverage.  Here are some examples of SEPs below:

1-Change of residence (moved to a new county)

2-Dual Eligiblity (Have both Medicare & Medicaid)

3-LIS eligible (receives "extra help" from social security for Prescription costs)

4-SPAP eligible (receives assistance from a State Pharmacy Assistance program)

5-Loss of Employer Group coverage

6-Natural Disaster in the service area (FEMA or State issued)

7-Involuntary Loss of Creditable Coverage

8-Having Other Creditable Coverage 

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