Lecture 1: Medicare and Medicare Part D

Question 1

Who is eligible for Medicare?

Answer 1

1. 65 and older
2. Any age and Disabled
3. Diagnosed with End Stage Renal Disease (ESRD) (can be less than 65)
4. Beneficiary of spouse who paid into Medicare for at least 10 years

***INCOME DOESN’T MATTER

Question 2

What is Medicare?

Answer 2

Federal health insurance program administered by the Centers for Medicare and Medicaid Services (CMS)

Question 3

Trend in Medicare Benefits Spending?

Answer 3

Medicare Benefits spending is projected to increase due to growth in the medicare population and increases in health care costs (due to people living longer, medicare population growing and increases in healthcare costs)

Question 4

What is Part A of Medicare? Do you have to pay a premium?

Answer 4

Part A (Hospital Coverage): covers inpatient hospital stay, pyschiatric, and SNFs, home health and hospice care

Medicare Part A (Hospital Insurance):
Mandatory for most people: If you are eligible for Social Security or Railroad Retirement benefits, Part A is typically mandatory, and most people are enrolled automatically when they turn 65 or after 24 months of receiving Social Security Disability Insurance (SSDI).
Premium-free for most: If you or your spouse paid Medicare taxes for at least 10 years (40 quarters), you won’t have to pay a premium for Part A coverage.
If you delay enrollment: If you aren’t eligible for premium-free Part A, you can choose to pay for it, but if you don’t sign up when you’re first eligible and don’t have another form of coverage, you may face penalties for late enrollment.

Question 5

What is covered under Part A, B, C, and D? Which Parts are mandatory, and which are optional?

Answer 5

• Part A (Hospital Coverage): covers inpatient hospital stay, pyschiatric, and SNFs, home health and hospice care
• Part B (Medical Coverage): Covers outpatient physician care, X-ray and laboratory test, PT and OT, drugs that cannot be self-administered, preventative services, screenings, DME
• Part C: Medicare Advantage Program (managed health care plans for medicare enrollees)
• Part D: Medicare Prescription Drug Plan

Part A is automatic at age 65 and is the only part that is MANDATORY. If you are eligible for Social Security or Railroad Retirement benefits, Part A is typically mandatory, and most people are enrolled automatically when they turn 65

Question 6

What is Part B of Medicare? Do you have to pay a premium?

Answer 6

Part B (Medical Coverage): Covers outpatient physician care, X-ray and laboratory test, PT and OT, drugs that cannot be self-administered, preventative services, screenings, DME

It is optional, but most people enroll in Part B because it covers many essential medical services that Part A does not.
Premium required: Part B requires a monthly premium. In 2024, the standard premium is $174.70 per month, though higher earners may pay more.
Penalties for delaying: If you delay Part B enrollment without having other creditable coverage (e.g., employer-based insurance), you may face a lifelong late enrollment penalty, which increases your premium by 10% for each 12-month period you were eligible but didn’t enroll.

Question 7

What is Part C of Medicare? Do you have to pay a premium?

Answer 7

Part C: Medicare Advantage Program (managed health care plans for medicare enrollees)

Optional: Medicare Advantage plans are private insurance alternatives to Original Medicare (Parts A and B). These plans often include additional benefits like dental, vision, and prescription drug coverage.
Voluntary enrollment: You can choose to enroll in Part C if you want an all-in-one plan. You must be enrolled in both Part A and Part B to join a Medicare Advantage plan.

, while some Medicare Advantage plans have no additional premium beyond the standard Part B premium, many do charge an extra monthly premium, depending on the plan’s features and coverage.

Medicare Advantage plans must cover everything Original Medicare (Part A and Part B) covers, but many plans also provide extra benefits, such as:

Dental, vision, and hearing services.
Prescription drug coverage (Part D).
Additional wellness programs.
Cost-sharing (e.g., premiums, deductibles, and copayments) varies depending on the specific Medicare Advantage plan you choose.

Question 8

What does this mean A+B+/-D=C?

Answer 8

You must be enrolled in both Part A and Part B to join a Medicare Advantage plan. Part D is optional

Question 9

What is Part D of Medicare? Do you have to pay a premium?

Answer 9

Part D: Medicare Prescription Drug Plan

Part D provides prescription drug coverage and is also optional. You can get Part D either through a stand-alone Prescription Drug Plan (PDP) or a Medicare Advantage plan that includes drug coverage. If you don’t sign up for Part D when you’re first eligible and don’t have other creditable drug coverage (like from an employer), you may face a late enrollment penalty that lasts as long as you have Part D.

Yes, Medicare Part D (Prescription Drug Coverage) typically has a monthly premium. The amount of the premium varies based on the specific plan you choose, as Part D plans are offered by private insurance companies approved by Medicare.

Question 10

What is “original” Medicare coverage?

Answer 10

• Primary Coverage: Part A and B (Original Medicare)
• Secondary Coverage: secondary insurance such as Group Health Plan (GHI), MedSup or Medicaid
• Prescription Drug Coverage: Rx Coverage such as Prescription Drug Plan (PDP) or Global Health Plan (GHI)

Question 11

Which parts of Medicare have limited enrollment periods?

Answer 11

Part B and D

Question 12

Which parts of Medicare do you have to sign up for?

Answer 12

Part C and D

Question 13

For doctoral and outpatient visits under part B of medicare plan, medicare covers 80% of the approved cost of medically necessary services after you meet the annual deductible. You are responsible for paying 20% coinsurance for most outpatient services. What are 3 secondard insurances that help cover some of the out-of-pocket costs that Original Medicare doesn’t cover?

Answer 13

1. Group Health Plan (GHP): Insurance from a former employer or union that supplements medicare
2. Medicare Supplemental Insurance: private insurance designed to coordinate with original medicare, often referred to as Medigap or Medicare Supplement
3. Medicaid: state assistance for those with limited income and resources

Question 14

Which part of medicare do you have to pay a monthly premium but do not have to take in plan?

Answer 14

Part B

Question 15

Why would a person get supplemental insurance if they have Medicare?

Answer 15

A person might get supplemental insurance (also known as Medigap) in addition to Medicare to help cover the out-of-pocket costs that Medicare doesn’t fully cover.
Original Medicare (Parts A and B) covers a lot, but it doesn’t cover everything. Some of the major gaps include:

Deductibles: Medicare Part A (hospital insurance) and Part B (medical insurance) have deductibles you must pay out of pocket before Medicare starts covering costs.
Coinsurance and Copayments: Medicare generally only covers 80% of the cost of Part B services (like doctor visits), leaving you responsible for the remaining 20%. For hospital stays, you may face daily coinsurance costs after a certain number of days.
No Out-of-Pocket Maximum: Original Medicare does not have a cap on how much you might have to pay out-of-pocket in a given year. This can leave you vulnerable to high medical bills if you require extensive care.
Medigap plans help pay for some or all of these out-of-pocket expenses.

Question 16

What is the major difference between Medicare and Medicare Part C?

Answer 16

In summary, Original Medicare offers more provider flexibility and nationwide coverage, but leaves you with significant out-of-pocket costs and no extras like prescription drug coverage or dental care. Medicare Advantage (Part C) typically offers lower costs, extra benefits, and all-in-one coverage but restricts you to a network of providers and may require referrals and pre-approvals for some services.

Question 17

What are the managed care options and non-managed care options of Medicare Part C?

Answer 17

Managed Care Options: HMO and PPO
Non-Managed Care Options: Private Fee for Service (PFFS) and Medicare Savings Account (MSA)

Question 18

What does the premium in Medicare Advantage Plan include?

Answer 18

Cost of health coverage (Part B) and prescription coverage (Part D)

Question 19

Does Medicare Advantage have cost sharing?

Answer 19

Yes, often have cost sharing for services such as office visits, lab tests, hospitalization

Question 20

Trends: Which part of Medicare is increasing in enrollment?

Answer 20

Medicare Part C or Medicare Advantage Enrollment

Question 21

Trends: What Part of Medicare accounts for the largest share of total medicare benefits spending?

Answer 21

Medicare Part B

Question 22

Why was Medicare invented?

Answer 22

Created in 1965. Before Medicare, many older Americans found it difficult or impossible to get health insurance, primarily because private insurers often considered them high-risk due to age-related health issues.

Health Care Access for the Elderly: Older Americans were often unable to afford health insurance or were denied coverage. Medicare aimed to provide them with a reliable source of healthcare coverage.
Financial Protection: Medical costs could be devastating for seniors who were living on fixed incomes, such as Social Security. Medicare was intended to protect them from financial ruin due to illness or injury.
Equity in Health Care: There was a growing awareness that older adults were particularly vulnerable to health disparities. Medicare was intended to ensure that all older Americans, regardless of income, had access to essential health services.
Government Responsibility: It was part of a broader vision of government playing a role in securing social welfare. Medicare, alongside Medicaid (which provides healthcare for low-income individuals), became key pillars in the U.S. social safety net.
The program has since expanded to cover not only elderly Americans but also younger people with disabilities or certain chronic conditions, making it one of the most significant and enduring programs in U.S. healthcare policy.

Question 24

Is Part D a mandatory or optional benefit?

Answer 24

Optional benefit; available for ALL people with Medicare

**Remember: comprehensive drug benefit and not a discount program

Question 25

Who is the Primary payer for Part D?

Answer 25

1. Federal government (pays 71% of program costs)
2. Enrollees pay premiums (16%)
3. State government (pays 12%)

Question 26

Who approves Medicare Part D plans?

Answer 26

Plans are approved by Medicare (so medicare contracts with private insurers to provide prescription drug benefits)

Question 27

For Medicare Part D, what is available for low income/low assest beneficiaries?

Answer 27

Low-income subsidy (LIS)

Question 28

What is the eligibility window for Part D and what happens if you enroll after their eligibility window closes?

Answer 28

65 years old +/- 3 months
If not enrolled by the deadline, will have higher premium when do enroll

Question 29

What if someone is eligible for medicare Part D and is still working, does that enrollment penalty still apply to this person?

Answer 29

No, there is no penalty as long as you have credible prescription coverage (which in this case will be this person’s employer)

Question 30

What if someone is eligible for Medicare Part D but does not have credible prescription coverage for instance through their employer and they did not enroll by the deadline, what happens?

Answer 30

Patient will have a lifetime penatly on their premium (1% for every month without credible prescription coverage)

Question 31

Does Part D use patient cost-sharing and formularies?

Answer 31

Yes

Question 32

What are the 2 types of Part D Benefits?

Answer 32

1. Standard benefit: created by CMS, patient cost-sharing
2. Enhanced Benefit: some plans offer ‘enhanced benefits’ (alternative benefit designs), but they must be comparable in coverage to the standard benefit; can be differences in deductibles, premium payments, formularies, utilization management tools such as PA

Question 33

Describe each phase of standard benefit

Answer 33

1. Deductible phase: patients pay 100% of prescription drug costs during the deductible stage.
2. Initial coverage phase: After meeting the deductible, the initial coverage phase kicks in and patient pays a 25% co-insurace for all prescription drugs until they reach teh catastrophic coverage limit of 2k in out-of-pocket spending for Part D FORMULARY DRUGS
3. Catastropic coverage limit: once it is reached, patietn pays $0 for prescription drugs for the rest of the calendar year

Question 34

What are
patient out-of-pocket costs when Part D patients reach “catastrophic” coverage?

Answer 34

Once catastropic coverage limit is reached, patient pays $0 for prescription drugs for the rest of the calendar year

Question 35

What does the term “donut hole” (coverage gap) mean in Medicare Part D standard benefit plan?

Answer 35

the donut hole is a stage in the Medicare Part D prescription drug plan where beneficiaries face higher drug costs until they reach a certain out-of-pocket spending threshold, after which catastrophic coverage kicks in and reduces their costs significantly.

Question 36

How do Part D plans control prescription drug costs?

Answer 36

1. Step therapy: use low cost drugs first with same efficacy
2. PA: physician writes letter of medical necessity to Part D plan to get drugs covered that are NOT on formulary
3. Quanity Limits: 30 days supply
4. Tiered formularies: different copays for brand and generic drugs, and tiers for high-cost specialty drugs

Question 37

What are current CMS criteria for MTM eligibility under Part D?

Answer 37

1. Must have a least 2 out 3 chronic conditions (this is set by the Part D plan)
2. Must be taking at least 2 to 8 or more maintenance, part D covered medications (this is set by Part D plan)
3. Must meet an annual threshold of spending on Part D prescription drugs **MUST MEET ALL THREE CRITERIA for MTM eligibility

Question 38

What are some Part D resources available for patients and pharmacists?

Answer 38

1. community pharmacists
2. medicare.gov: medicare plan finder tool
3. 1-800-MEDICARE
4. In ohio, medicaid.ohio.gov and Ohio Senior Health Insurance Information Program (OSHIIP)

Question 39

Medicare Part D prescription Drug Plans are NOT run by the Federal Government or Medicare. Who are they run by?

Answer 39

They are run by independent insurance companies who have been approved by Medicare

Question 40

Is Medicare Part D a voluntary program?

Answer 40

YES! Patients do not have to sign up. If patient has prescription insurance through their employer or union, they need to check and make sure this coverage is at least as good as Medicare part D

Question 41

Are all Medicare part D plans the same?

Answer 41

NO! Deductibles, co-payments, drugs covered, premiums and other benefits will vary from plan to plan; variation in patient out-of-pocket costs based on plan

Question 42

What are 2 things Medicare part D enrollees should check before enrollment?

Answer 42

1. Make sure pharmacy is in the “preferred network”: lower costs
2. Check to see if medications are covered on drug formulary before deciding

Question 43

What is the initial enrollment period for Part D enrollees?

Answer 43

Initial Enrollment Period (total 7 months): 3 months before age 65 + the month you become 65 + 3 months after you become eligble

**Penalty for late enrollment

Question 44

What are the Fall Open Enrollment to Switch Plans?

Answer 44

October 15, 2024: First day patient can change Medicare Part D Prescription Plan for 2024
Must be signed up by December 7, 2024
January 1, 2025: First day patient use “new” Medicare Part Prescription Insurance

Question 45

Can enrollees change their part D plan?

Answer 45

yes, enrollees can only change plans once a year (Oct. 15th-Dec.7th) (rare exceptions to those dates) so patients need to choose carefully!

Question 46

What is the purpose of LIS?

Answer 46

Low income subsidy: help lower out of pocket costs by assisting with prescription drug costs (comes into play with Medicare Part D)

*Based primarily on Federal Poverty Guidelines
*Extra Help reduces the cost of prescriptions by lowering or eliminating premiums, deductibles, and copayments for Part D coverage. When switching plans, ensure the new plan is compatible with your LIS benefits to maintain these cost reductions.
*usually no premium or deductible
*out of pocket costs are greatly reduced for those who qualify for LIS

Question 47

If a patient becomes eligible for LIS, can they switch their Part D plan before the
open enrollment window?

Answer 47

• Yes, if a patient becomes eligible for Low-Income Subsidy (LIS), also known as Extra Help, they can switch their Medicare Part D plan outside of the regular Open Enrollment Period.
• becoming eligible for LIS provides the flexibility to switch Part D plans at any time, allowing beneficiaries to select a plan that best fits their needs and maintains the benefits of Extra Help.
• Special Enrollment Period (SEP):
  When a beneficiary becomes eligible for LIS, they qualify for a Special Enrollment Period (SEP). This SEP allows them to make changes to their Part D plan outside of the annual Open Enrollment Period.
• Timing and Options:
  Timing: The SEP for LIS eligibility starts the month you become eligible for Extra Help and continues for the rest of the calendar year. You can switch plans or enroll in a new Part D plan at any time during this period.
• Options: You can switch to a different Part D plan that better meets your needs or one that may be more cost-effective given the LIS benefits. The new plan’s coverage will start the first day of the month after you enroll.

Question 48

Information to Know Before Searching for Medicare Part D Plan

Answer 48

1. Type of Health Care Coverage
2. Traditional Medicare or Medicare Advantage Plan
3. Residential Zip Code
4. Live in Same Location Year-Round?
5. Quality for LIS?
6. Medicare Part D Medications including dosage and directions

Question 49

What if someone did not join Medicare Part D when they were first eligible? What happens if they qualify for the LIS? What happens if they don’t qualify for the LIS?

Answer 49

1. If they qualify for LIS, they can join a Part D plan at the beginning of the next month
2. If they DO NOT qualify, they can still join in January but they will have an increased premium

Question 50

If eligible for LIS, are late enrollment penalties enforced?

Answer 50

NO!

Question 51

What happens if you enroll late for Medicare?

Answer 51

1. Will pay a higher monthly premium for rest of life
2. 1% per month increase for every month late to enroll in Medicare Part D once became eligible without other credible prescription coverage

Question 52

What is a medicare resource for patients to ask questions in Ohio?

Answer 52

OSHIIP: Ohio Senior Health Insurance Information Program (program that exists specifically for Medicare recipients in Ohio.)

Question 53

What website can you use for Medicare Part D to look up a particular medication to find whcih plans cover it or to see tier level on any plans?

Answer 53

fingertipformulary.com