Health Insurance Counseling & Advocacy Program

Health Insurance Counseling & Advocacy Program

Health Insurance Counseling & Advocacy Program

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Frequently Asked Questions

The Health Insurance Counseling & Advocacy Program (HICAP) of Sourcewise helps you understand your options and choose what is best for you and your family.

HICAP does not sell, recommend or endorse any insurance product.

1 - When did Medicare start and what are the "Parts" of Medicare?

2 - What is the difference between Medicare and Medicaid (referred to as "Medi-Cal" in California)?

3 - What does Medicare cover?

5 - Are there services Medicare does not cover?

6 - Who is eligible for Medicare? 

 

1 - When did Medicare start and what are the "Parts" of Medicare?

In 1965, Medicare was written into the Social Security Act as Title 18: HEALTH INSURANCE FOR THE AGED AND DISABLED. Over the years, additional parts have been written into the law.

The Social Security Act describing Medicare now has five parts: A, B, C, D, and E. Three of those parts describe certain coverage and benefits, one of them describes an alternative way (often a private way) of receiving those benefits, and Part E talks about Miscellaneous provisions. For more information, you can visit the Medicare benefits website, at www.ssa.gov or contact your local Social Security office. Medicare is administered by the Center for Medicare Services (CMS) of the U.S. Department of Health and Human Services. Local Social Security Administration offices take applications for Medicare Part A and B enrollments.

Nationally, Medicare covers approximately 47 million persons, of whom about 7.2 million are disabled.

 
 

 

2 - What is the difference between Medicare and Medicaid (referred to as "Medi-Cal" in California)?

Medicare is a federal health insurance program for individuals over age 65, persons with disabilities, and individuals with permanent kidney failure, regardless of income and assets. Medicaid, on the other hand, is a medical assistance program jointly financed by the State and Federal governments for eligible low-income individuals. Medicaid and CHIP provide health coverage to nearly 60 million Americans, including children, pregnant women, parents, seniors and individuals with disabilities. In order to participate in Medicaid, Federal law requires States to cover certain population groups (mandatory eligibility groups) and gives them the flexibility to cover other population groups (optional eligibility groups). States set individual eligibility criteria within federal minimum standards.

Medicare part A and B eligibility and enrollment is determined by the Social Security Administration. There are local offices throughout the county. The toll free number is
1 (800) 772-1213. The website is www.ssa.gov.

Medi-Cal program eligibility is handled by the county Social Services Agency through its Department of Employment & Benefit Services. Their phone number is (408) 758-4600 or 1 (877) 962-3633. Applications can also be submitted at www.coveredca.com or through www.mybenefitscalwin.org. Additional information can be found at the local Santa Clara County social services site.

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3 - What does Medicare cover?

By enrolling in Medicare Part A one receives insurance coverage for four areas: inpatient hospital costs, short term skilled nursing facility care, home health care, and hospice care. Drugs are covered while admitted in a hospital or during a Medicare covered nursing facility stay.

If you are admitted to a hospital, Medicare provides coverage for a semi-private room, meals, regular nursing services, operating and recovery room costs, intensive care, drugs, lab tests, X-rays, and all other medically necessary services and supplies. Covered services in a skilled nursing facility include a semi-private room, meals, regular nursing services, rehabilitation services, drugs, and medical supplies and appliances.

Enrolling in Medicare Part B provides an individual with insurance coverage for doctor visits/services (both in and out of the hospital), new annual wellness visits and preventive services, home health care, diagnostic tests, therapy, e.g. physical, occupational and speech, and durable medical equipment and supplies.

Part B helps pay for limited physician services, outpatient hospital care, clinical laboratory tests, and various other medical services and supplies, including durable medical equipment. Physician services are covered anywhere you receive them in the U.S. Other covered services include surgical, diagnostic tests and X-rays that are part of treatment, medical supplies furnished in a doctor's office, and drugs which cannot be self-administered, but are part of the treatment plan. Medicare pays only for care that it determines is medically necessary.

Prescription drug coverage (Medicare Part D) helps pay for medications doctors prescribe for treatment. Anyone who has Medicare hospital insurance (Part A), or medical insurance (Part B) is eligible for prescription drug coverage (Part D).

 
 

 

4 - Are there different health care systems Medicare beneficiaries can use to get their Medicare benefits?

Yes. You can receive services covered by Medicare either through Original/Traditional fee-for-service (pay-as-you-go) delivery system OR through health maintenance organizations (HMOs) and preferred provider organizations (PPOs), which have contracts with Medicare. These HMO’s offer “Medicare Advantage Plans”.

Original/Traditional Medicare

A person enrolled in just A and/or B is said to have “Original” or “Traditional fee-for-service Medicare”. This person can see doctors or providers who take Medicare anywhere in the country without a referral. If the service provided is considered reasonable and medically necessary, then Medicare will pay a portion to the provider, and the enrollee must pay a portion. An individual’s out of pocket costs come in the form of deductibles, coinsurance and co pays. Many people with Original Medicare have a second insurance that picks up these out of pocket costs. For example, 25% of Medicare beneficiaries have Medicare supplement insurance known as a Medigap policy that picks up the portion Medicare does not cover. Approximately 15% have Medi-Cal that also picks up out of pocket costs inherent in Original or Traditional Medicare coverage. Military retirees may have TRICARE for Life that works the same way. In effect, when you obtain a service or benefit, the provider bills Medicare, then Medicare pays the provider for the reasonable and medically necessary service, and then the remainder would be paid by the patient or up to the terms of the patient’s secondary coverage. In some cases, instead of being the primary coverage, Medicare acts as a secondary coverage to other insurance, like Workers Comp Insurance or an Employer Group Health Plan.

Medicare Advantage (Part C)

Since the 70’s, an alternative to Original/Traditional fee-for-service has been an option for Medicare beneficiaries. Since the 90’s this private alternative has been described in Part C of Medicare law. Enrolling in Medicare Part C is now referred to as enrolling in a Medicare Advantage (MA) plan. MA HMO plans receive a “capitation” from Medicare- a set amount of money each month for each enrollee. The plans must use the money to provide health services to the Medicare enrollee. In order to join an MA plan, you must be enrolled in both Medicare Part A and Part B, and you must continue to pay the Part B premium. All MA plans in Santa Clara County include Medicare Part D drug coverage and plans may offer more benefits beyond Original Medicare A and B. If you join an MA plan, you are still on Medicare and retain the full rights and protections entitled to all beneficiaries.

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5 - Are there services Medicare does not cover?

While Medicare helps pay a large portion of your medical expenses, there are various health care services and products for which Medicare will not pay. These generally include custodial care; eye-glasses, hearing aids, and examinations to prescribe or fit them. Medicare also does not pay for cosmetic surgery, dental care and routine foot care. Although some personal care services (for example: bathing assistance, eating assistance, etc.) can be covered as part of any skilled care, they are never covered alone except under the hospice benefit.

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6 - Who is eligible for Medicare?

Generally, individuals age 65 and over can get Part A benefits if they can establish their eligibility for monthly Social Security or Railroad Retirement benefits on their own or their spouse's work record. In addition, certain government employees whose work has been covered for Medicare purposes, and their spouses, can also have Part A. In rare cases, involving individuals who became age 65 in 1974 or earlier, Part A may be available if they meet certain United States residence and citizenship or legal alien requirements.

Part A is also available to most individuals with permanent kidney failure, those who have been entitled to Social Security disability benefits or Railroad Retirement disability benefits for more than 24 months, and to certain disabled government employees whose work has been covered for Medicare purposes. Any person who is eligible for Part A is also eligible to enroll in Part B.

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7 - How do I sign up for Medicare?

If you are already getting Social Security or Railroad Retirement benefit payments when you turn 65, you will automatically get a Medicare card in the mail. The card will usually show that you are entitled to both Part A and Part B and indicate the beginning dates of your entitlement to each. If you do not want Part B, you can refuse it by following the instructions that come with the card. A permanent surcharge may be assessed, however, unless you have health coverage as a result of your (or your spouse’s) active employment. 

If you are not receiving Social Security or Railroad retirement benefits when you turn 65, you may have to apply for Medicare coverage. Check with Social Security Administration to see if you are able to get Medicare under the Social Security system or based on Medicare covered government employment; check with the Railroad Retirement office if you are able to get Medicare under the Railroad Retirement system. If you must file an application for Medicare, you should do so during your initial seven-month enrollment period. That period starts three months before the month you first meet the requirements for Medicare.

Signing up for Medicare Part C or D can be done through Medicare at 1 (800) MEDICARE, www.medicare.gov or by contacting the private plan itself. Talk to a HICAP counselor for specific plans in your area.

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8 - When I enrolled in Medicare Part A, I did not sign up for Part B. Is that coverage still available to me on the same terms?

You may still enroll in Part B during the general enrollment period from January 1 to March 31, but coverage will only begin on July 1. Your monthly premium could be higher than it would have been had you enrolled in Part B during your Initial Enrollment Period. Generally, if you defer your enrollment in Part B, you must pay a monthly premium surcharge. The surcharge is 10 percent for each 12-month period in which you could have been enrolled but were not. The surcharge generally does not apply if you delayed enrolling in Part B because you were covered by an employer health plan based on your (or your spouse's) current employment once you first became eligible for Medicare. In that case, you are allowed a special enrollment into Part B anytime while working or up to 8 months after the month the employer group health plan ends, or after the month the employment ends, whichever happens first.

IMPORTANT NOTE: COBRA coverage is not considered coverage due to active employment. The special enrollment period will expire before COBRA is exhausted.

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9 - If I am not entitled to free Medicare Part A based on my employment, or the employment of my spouse, can I buy the coverage?

Individuals age 65 or over who are United States residents and either United States citizens, or aliens who have been lawfully admitted for permanent residence and have resided in the United States for at least five years at the time of filing, can purchase both Part A and Part B, or just Part B.

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10 - What is the Cal MediConnect demonstration project for full duals (Medi-Medi’s) and is it an option for me?

The Cal MediConnect demonstration program is occurring in eight California counties including Santa Clara. People with only Medicare are not eligible to participate. The new Cal MediConnect Plans are available to full duals (people with full Medicare (A, B, D) and Medi-Cal). Plans receive money from both Medicare and Medi-Cal and will be responsible for providing all of a dual’s Medicare and Medi-Cal benefits and services. Plans will also provide extra vision and transportation benefits as well as a care coordinator for each enrollee. The State of California will start notifying eligible participants as early as October, 2014 and thereafter. Depending on one’s predetermined enrollment date and medical history, eligible duals will be assigned a Cal MediConnect Plan from either Santa Clara Family Health Plan or Anthem Blue Cross. They will be enrolled unless they notify the State otherwise. Cal MediConnect Plans will start accepting enrollees effective January 1, 2015 and thereafter. A dual eligible retains the right to disenroll from plans at any time. For more information contact HICAP at (408) 350-3200, option 2 or go to www.sccduals.com.

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11 - How can I avoid healthcare fraud and abuse?

Whether you have Medicare yourself, or work with Medicare patients, we can all play a part in preventing fraud and abuse. If you suspect fraud or abuse call (855) 6913-7080 and speak to the Senior Medical Patrol or contact your local Health Insurance Counseling & Advocacy Program at (408) 350-3200, option 2.

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12 - How Much Does Medicare Part D Cost?

Private insurance companies and HMOs offer part D. You may have to pay a premium ranging from $0 to $147.00 for part D coverage. Some plans may offer richer benefits (smaller deductible, co-pays, or “donut hole”) depending on the type of plan and the premium.

Many plans offer a “tiered” system of costs for covered medications. Generally, there are 4 or 5 tiers with the preferred generics in the lowest cost tier (tier 1) and non-preferred brand medication on the more expensive, higher tiers.

Finally, if your drug is not covered by your plan, you will have to pay for it yourself, and this will not count towards your co-payment and deductible requirements. Filing an exception request with help from your prescribing physician may allow a non-formulary drug to be obtained through the plan.

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13 - What’s Covered Under Medicare Part D?

Each plan has a “formulary” – a list of covered drugs. Formularies are not standardizedand will vary from plan to plan. You should check to see if a plan covers your medication before enrolling.

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14 - What’s the Deductible and Co-Payment for Medicare Part D?

The maximum deductible a plan can charge is $310 (2014), after which the plan pays a portion of the drug cost. Some plans do not charge a deductible. After meeting the deductible, you enter the “Initial Coverage Period” and the co pays will vary depending on the drug. Once the full retail price of your medications exceeds $2,850 (more than what you would have paid out of pocket) you will enter the “Donut Hole” and your co pays may change again.

 
 

 
 

15 - What is Medicare Part D’s “Donut Hole”?

As you fill prescriptions each month, and the full retail price of your drugs reaches $2,850, you leave the Initial Coverage Period and enter the Coverage Gap or "Donut Hole". Before health reform, you would have paid the full retail price of the drug. Under reforms to the Donut Hole you receive a discount (52.5% off for brand drugs and 28% off of generics- plans may extend additional benefits in the Donut Hole). You remain in the Donut Hole until your TrOOP (True out of Pocket) costs reach $4,550. To count your TrOOP add up what you've paid in any deductibles and co-pays thus far, then, also add 50% of the full retail price of brand name drugs you purchased while in the Donut Hole. When your TrOOP exceeds $4,550 you enter Catastrophic Coverage and pay the greater of 5% or $2.55 / $6.35 for generic/brand drugs. This process resets again the following year.

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16 - How does Medicare Part D affect my Medigap Policy?

Some Medigap policies sold prior to 2006 offer drug coverage. If you have one of these policies, you should have received a letter from your insurance company telling you that your current coverage is not considered “at least as good as Part D coverage.” In this case, you can consider enrolling in a Part D plan, during the Annual Enrollment Period (October 15 – December 7), but you will face a late enrollment penalty when your Part D plan becomes effective.

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17 - What if I already belong to an HMO?

All Medicare HMO plans in Santa Clara County include the Part D benefit. Co pays depend on the plan.

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18 - What about my retiree coverage?

If you have drug coverage through a union or company retirement plan, you will receive a letter from the plan, each year, telling you how the plans benefits will change and whether they are considered “at least as good as Part D coverage.” If they are not, you should consider enrolling in the Medicare prescription drug benefit.

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19 - When can I sign up for Medicare Part D?

The initial enrollment period for Medicare Part D is a seven-month enrollment period. That period starts three months before the month that your Part A becomes effective and ends three months after. If you decide to enroll in Part D after that date, there may be a lifetime premium penalty of 1% for each month you delayed enrollment.

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