NCC MEDICARE SALES TRAINING 2023 Flashcards
What Is Medicare?
Medicare is a federally funded health insurance program that covers:
-People 65 and older.
-Those with End-Stage Renal Disease (ESRD), which is kidney failure that requires dialysis or a transplant.
-Some people under 65 with disabilities.
How is Medicare Funded?
Medicare is funded by a branch of the Department of Health and Human Services (HHS) called The Centers for Medicare & Medicaid Services (CMS). CMS also monitors Medicaid programs offered by each state.
When Did Medicare Start?
1965: Lyndon B. Johnson signed Medicare bill into law providing health coverage to Americans aged 65 or older, regardles of income, medical history or health status.
- Included those receiving retirement benefits from Social Security or the Railroad Retirement Board.
1972: Richard Nixon Signed a significant expansion of Medicare eligibility to include individuals under 65 receiving Social Security Disability payments and individuals with end-stage renal disease (ESRD).
2003: Prescription Drug Coverage Added: Medicare stayed as it was until 2003 when then-President George W. Bush signed the Medicare Prescription Drug, Improvement and Modernization Act into law. The Act made several changes to Medicare, but the most significant was adding prescription drug coverage for beneficiaries. As a result, Medicare Part D was introduced in 2006.
What Is “Original Medicare”?
There are two fundamental parts of Original Medicare: Parts A and B.
Part A - Hospital Insurance Helps cover:
-Inpatient care in hospitals.
-Skilled nursing facility care.
-Hospice care.
-Home health care.
Part B - Medical Insurance Helps cover:
-Services from doctors and other health care
providers.
-Outpatient care.
-Home health care.
-Durable medical equipment (wheelchairs, hospital
beds, and other equipment).
-Many preventative services (screenings, vaccines,
and related services).
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What Are the Part A Costs Associated with Medicare?
Most people assume that Medicare is free, but in fact, it is not. Beneficiaries are generally responsible for premiums, deductibles, copays, and coinsurances. Some of these costs, however, may be covered by programs like Extra Help and Subsidies.
Part A
Premiums for 2022
Most Medicare beneficiaries don’t pay a monthly premium for Part A (sometimes called “premium-free Part A”) as long as the beneficiary or their spouse worked and paid Medicare taxes for at least 40 quarters. If the beneficiary or spouse paid Medicare taxes for fewer than 30 quarters, the standard Part A premium is $499. If the beneficiary or spouse paid Medicare taxes for 30-39 quarters, the standard Part A premium is $274.
With Part A Hospital Inpatient Deductible and Coinsurance, the Beneficiary Pays:
$1,556 deductible for each benefit period.
Days 1-60: $0 coinsurance for each benefit period.
Days 61-90: $389 coinsurance per day of each benefit period.
Days 91 and beyond: $778 coinsurance per each “lifetime reserve day” after day 90 for
each benefit period (up to 60 days over your lifetime).
Beyond lifetime reserve days: all costs.
What Are the Part B Costs Associated with Medicare?
Part B
Premiums for 2022
Medicare beneficiaries must pay a premium each month for Part B. For 2022, the standard Part B premium amount is $171.10, and this is what most beneficiaries will pay. Their Part B premium will be automatically deducted from their benefit payment if they receive benefits from:
Social Security
Railroad Retirement Board
Office of Personnel Management
If they don’t receive these benefit payments, they’ll be billed for the premium.
However, if the beneficiary’s modified adjusted income – as reported by their IRS tax return from 2 years before – is above a certain amount, they will pay an Income Related Monthly Adjustment Amount (IRMAA) in addition to their premium.
May beneficiaries appeal an IRMAA increase to their Part B premium?
Yes. Medicare beneficiaries have the right to appeal if they believe that an IRMAA is incorrect for
one of the two qualifying reasons” Inaccurate or Out-of-Date Tax Return; and Life-changing Event (1 of any 7 events). However, they must request a reconsideration of the initial determination from the Social Security Administration. A request for reconsideration can be made verbally by calling the SSA at 800-772-1213
Beneficiaries may appeal for a new Part B determination if they successfully show the determination was based on Inaccurate or Out-of-Date Tax Return:
Inaccurate or Out-of-Date Tax Return:
Tax returns may be classified as inaccurate or out of date for the following reasons:
-The beneficiary’s tax return for the year SSA is using to make the decision was amended.
-The IRS data was incorrect.
-The IRS provided SSA with older data, and the beneficiary prefers to use updated information.
- A beneficiary had a major life-changing event tht significantly reduced their income.
Beneficiaries may appeal for a new Part B determination if they successfully show they had a life-changing event that significantly reduced their income:
Life-Changing Event
A beneficiary may qualify for a new Part B determination after experiencing one of seven life-changing events that affect their modified adjusted gross income. Events that meet these criteria are:
Death of spouse.
Marriage.
Divorce or annulment.
Work reduction.
Work stoppage.
Loss of income from an income-producing property.
Loss or reduction of certain kinds of pension income.
2022 Part B deductible & Coinsurance:
Deductible & Coinsurance
In 2022, Medicare beneficiaries pay $233 for their Part B deductible. After they meet their yearly deductible, they typically pay 20% of the Medicare-approved amount for the following
services:
-Most doctor services (including those performed while the beneficiary is a patient in the hospital).
-Outpatient therapy.
-Durable medical equipment (DME).
-Ambulance Services.
-Medicines administered by a Doctor (i.e., Chemotherapy or Injectables).
-Dialysis.
How to Apply for Medicare
Some beneficiaries receive Medicare Part A (Hospital Insurance) and Medicare Part B (Medical Insurance) automatically, while others have to sign up for it. In most cases, it depends on whether or not they’re receiving Social Security benefits.
When applying, the beneficiary selects one of the following situations that applies to them:
“I’ll be getting benefits from Social Security or the Railroad Retirement Board (RRB) at least four months before I turn 65.” Typically, they would receive Original Medicare, Parts A & B.
-“I won’t be getting benefits from Social Security or the Railroad Retirement Board (RRB) at least four months before I turn 65.” In this case, they would need to apply for Medicare.
-“I’m under 65 and have a disability.” After 24 months of full disability, they will automatically receive their Original Medicare, Parts A & B.
-“I have ALS (Amyotrophic Lateral Sclerosis, also called Lou Gehrig’s disease).” They will automatically receive Original Medicare, Parts A & B the month that disability
benefits begin.
-“I have End-Stage Renal Disease (ESRD).” They will be eligible to apply for Medicare.
Delaying enrollment into Part B:
Some beneficiaries choose to delay Part B when they initially become eligible for Medicare, often so that they may keep the group health coverage provided through their employment.
To delay Part B, the beneficiary would indicate such to the Social Security Administration upon notice of becoming eligible for Medicare.
Conversely, a beneficiary desiring to enroll in Part B after initially delaying it would do so by applying for Part B via the Social Security Administration office or website.
It should be noted that a client delaying Part B without having creditable coverage would be restricted in reacquiring it. They would be required to enroll during the Part B general
enrollment period (January 1 - March 31 with an effective date of July 1) and would be penalized for time-lapsed in which they were eligible for Medicare and not covered by creditable coverage. The penalty would be assessed monthly for the rest of their life.
However, loss of creditable group coverage triggers a Part B special enrollment period, and the beneficiary would not be subject to a penalty in that scenario.
According to Medicare, the Part B special enrollment period lasts for eight months after you lose or end employer-based coverage. You can enroll in Medicare Part B during this period without a late enrollment penalty. However, if your group health plan coverage or the employment it is based on ends during your initial enrollment period for Medicare Part B, you do not qualify for a special enrollment period. In that case, you should sign up for Medicare when you are first eligible to avoid paying a higher premium.
How Are Prescriptions Covered?
In order for a Medicare beneficiary’s prescriptions to be covered, the beneficiary must have Part D coverage through either a standalone Prescription Drug Plan (PDP) or a Medicare Advantage plan that includes drug coverage.
What does Paart D (Rx Drug Coverage) cover:
Helps cover:
- The cost of prescription drugs, including many vaccines and other shots.
- Part D Plans follow Medicare’s rules but are managed by private insurance carriers.
What are the requirements to Enroll in Part D?
A Medicare beneficiary having only Part A or Part B may still acquire drug coverage through a standalone Prescription Drug Plan (PDP).
Part D Late Enrollment Penalty:
The late enrollment penalty is an amount added to the Medicare beneficiary’s Part D monthly premium. They may owe a late enrollment penalty if, for any continuous period of 63 days or
more after their Initial Enrollment Period is over, they go without one of these:
-A Medicare Prescription Drug Plan (Part D)
-A Medicare Advantage Plan (Part C) (like an HMO or PPO) or another Medicare health plan that offers Medicare prescription drug coverage.
-Creditable prescription drug coverage (Like group health coverage or VA/ChampVA/Tricare).
-The cost of the late enrollment penalty depends on how long the beneficiary went without Part D or creditable prescription drug coverage.
-Medicare calculates the penalty by multiplying 1% of the “national base beneficiary premium” ($33.37 in 2022) times the number of full, uncovered months the beneficiary didn’t have Part D or creditable coverage. The monthly premium is rounded to the nearest $.10 and added to their monthly Part D premium.
The national base beneficiary premium may change each year, so their penalty amount may also change each year and would be assessed for the rest of the beneficiary’s life.
Drug Plan Formulary
Most Medicare drug plans have their own list of covered medications, called a formulary.
Plans cover both generic and brand-name prescription drugs. The formulary includes at
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least two drugs in each therapeutic category. This ensures that people with different medical
conditions can get the prescription drugs they need. All Medicare drug plans generally must
cover at least two drugs per drug category, but plans can choose which specific drugs they
cover.
TIERS:
To lower costs, many plans place drugs into different “tiers” on their formularies. Each plan
can divide its tiers in different ways. Each tier costs a different amount. Generally, a drug in a lower tier will cost the beneficiary less than a drug in a higher tier. Example of a Drug Plan’s Tiers
-Tier 1—lowest copayment: most generic prescription drugs
-Tier 2—medium copayment: preferred, brand-name prescription drugs
-Tier 3—higher copayment: non-preferred, brand-name prescription drugs Specialty tier—highest copayment: very high-cost prescription drugs
In some cases, if the beneficiary’s drug is in a higher (more expensive) tier and their prescriber thinks they need that drug instead of a similar drug on a lower tier, they can file
an exception and ask their plan for a lower-tier Placement/copayment.
The Coverage Gap/Donut Hole
Most Medicare drug plans have a coverage gap (also called the “donut hole”). This means
there’s a temporary limit on what the drug plan will cover for drugs.
Not all beneficiaries will enter the coverage gap. The coverage gap begins after they and
their drug plan have spent a certain amount for covered drugs. Once they and their plan have
spent $4,430 on covered drugs in 2022, they enter the coverage gap. The Part D deductible also applies here. While deductibles will vary between plans, in 2022 the maximum allowable
deductible is $480.
This amount may change each year. Also, people with Medicare who get Extra Help paying
Part D costs won’t enter the coverage gap.
Once the beneficiary reaches the coverage gap, they’ll pay no more than 25% of the cost for their plan’s covered brand-name prescription drugs. They’ll pay this discounted rate if they
buy their prescriptions at a pharmacy or order them through the mail. Some plans may offer them at even lower costs in the coverage gap. The discount is taken out of the price that their plan has set with the pharmacy for that specific drug.
Although the beneficiary will pay no more than 25% of the price for the brand-name drug, almost the full price of the drug will count as out-of-pocket costs to help them get out of the
coverage gap and into “Catastrophic” coverage. What they pay and what the manufacturer pays (95% of the cost of the drug) will count toward out-out-pocket spending.
COSTS IN THE COVERAGE GAP (DONUT HOLE):
Costs in the coverage gap
Most Medicare drug plans have a coverage gap (also called the “donut hole”). This means there’s a temporary limit on what the drug plan will cover for drugs.
Not everyone will enter the coverage gap. The coverage gap begins after you and your drug plan have spent a certain amount for covered drugs. Once you and your plan have spent $4,660 on covered drugs in 2023 ($5,030 in 2024), you’re in the coverage gap. This amount may change each year. Also, people with Medicare who get Extra Help paying Part D costs won’t enter the coverage gap.
Brand-name prescription drugs
Once you reach the coverage gap, you’ll pay no more than 25% of the cost for your plan’s covered brand-name prescription drugs. You’ll pay this discounted rate if you buy your prescriptions at a pharmacy or order them through the mail. Some plans may offer you even lower costs in the coverage gap. The discount will come off of the price that your plan has set with the pharmacy for that specific drug.
Although you’ll pay no more than 25% of the price for the brand-name drug, almost the full price of the drug will count as out-of-pocket costs (tooltip) to help you get out of the coverage gap. What you pay and what the manufacturer pays (95% of the cost of the drug) will count toward your out-out-pocket spending. Here’s a breakdown:
Of the total cost of the drug, the manufacturer pays 70% to discount the price for you. Then your plan pays 5% of the cost. Together, the manufacturer and plan cover 75% of the cost. You pay 25% of the cost of the drug.
There’s also a dispensing fee. Your plan pays 75% of the fee, and you pay 25% of the fee.
What the drug plan pays toward the drug cost (5% of the cost) and dispensing fee (75% of the fee) aren’t counted toward your out-of-pocket spending.
Example
Mrs. Anderson reaches the coverage gap in her Medicare drug plan. She goes to her pharmacy to fill a prescription for a covered brand-name drug. The price for the drug is $60, and there’s a $2 dispensing fee that gets added to the cost, making the total price $62. Mrs. Anderson pays 25% of the total cost ($62 x .25 = $15.50).
The amount Mrs. Anderson pays ($15.50) plus the manufacturer discount payment of $42 ($60 x .70 = $42) count as out-of-pocket spending. So, $57.50 counts as out-of-pocket spending and helps Mrs. Anderson get out of the coverage gap. The remaining $4.50, which is 5% of the drug cost ($3) and 75% of the dispensing fee ($1.50) paid by the drug plan, doesn’t count toward Mrs. Anderson’s out-of-pocket spending.
If you have a Medicare drug plan that already includes coverage in the gap, you may get a discount after your plan’s coverage has been applied to the drug’s price. The discount for brand-name drugs will apply to the remaining amount that you owe.
Generic drugs
Medicare will pay 75% of the price for generic drugs during the coverage gap. You’ll pay the remaining 25% of the price. The coverage for generic drugs works differently from the discount for brand-name drugs. For generic drugs, only the amount you pay will count toward getting you out of the coverage gap.
Example
Mr. Evans reaches the coverage gap in his Medicare drug plan. He goes to his pharmacy to fill a prescription for a covered generic drug. The price for the drug is $20, and there’s a $2 dispensing fee that gets added to the cost. Mr. Evans will pay 25% of the plan’s cost for the drug and dispensing fee ($22 x .25 = $5.50). The $5.50 he pays will be counted as out-of-pocket spending to help him get out of the coverage gap.
If you have a Medicare drug plan that already includes coverage in the gap, you may get a discount after your plan’s coverage has been applied to the drug’s price.
Items that count towards the coverage gap:
-Your yearly deductible, coinsurance, and copayments
-The discount you get on brand-name drugs in the coverage gap
-What you pay in the coverage gap
Items that don’t count towards the coverage gap:
-The drug plan premium
-Pharmacy dispensing fee
-What you pay for drugs that aren’t covered
If you think you should get a discount:
If you think you’ve reached the coverage gap and you don’t get a discount when you pay for your brand-name prescription, review your next “Explanation of Benefits” (EOB). If the discount doesn’t appear on the EOB, contact your drug plan to make sure that your prescription records are correct and up-to-date.
If your drug plan doesn’t agree that you’re owed a discount, you can file an appeal.
What Is a Medicare Supplement/Medigap Insurance?
Medicare Supplement (often called Medigap) helps fill “gaps” in Original Medicare and is sold by private companies. Original Medicare pays for much, but not all, of the cost for
covered health care services and supplies. A Medicare Supplement Insurance (Medigap) policy can help pay some of the remaining health care costs, like:
-Deductibles - Like Part A/Hospital Deductible.
-Copayments - Like Emergency Room and Medical Doctor Copays.
-Coinsurance - Like Part B Coinsurance (20%)
-Excess Charges - Like the Part B Excess Charges.
What is IRMAA?
Medicare is a health insurance program that helps people pay for their medical expenses. Part B of Medicare covers things like doctor visits, lab tests, and preventive care. Part D of Medicare covers prescription drugs.
Most people pay a monthly fee, called a premium, for Part B and Part D. However, some people have to pay more than others, depending on how much money they make. This extra fee is called IRMAA, which stands for Income Related Monthly Adjustment Amount.
IRMAA is based on your income from two years ago, as reported on your tax return. If your income was above a certain amount, you have to pay IRMAA on top of your regular premium. The higher your income, the higher your IRMAA. IRMAA can change every year, depending on your income.
For example, in 2023, if you filed your taxes as an individual and your income was more than $97,000 in 2021, you have to pay an IRMAA of $65.90 per month for Part B and between $12.40 and $77.90 per month for Part D12. If your income was more than $103,000 in 2022, you have to pay an IRMAA of $69.80 per month for Part B and between $13.20 and $82.80 per month for Part D in 202412.
IRMAA is a way of making Medicare more fair, by asking people who can afford to pay more to contribute more. However, if you think your IRMAA is wrong or you had a change in your income or life situation, you can appeal it and ask for a lower amount12.
What is the Part D Donut Hole?
Okay, let me try to explain the Medicare donut hole in a simple way. Medicare is a program that helps older people and some people with disabilities pay for their health care. One part of Medicare, called Part D, helps them pay for their prescription drugs. Prescription drugs are medicines that you need a doctor’s order to get.
When you have Part D, you usually pay a monthly fee, called a premium, to get drug coverage. You also pay a part of the cost of each drug you get, called a copay or coinsurance. The amount you pay depends on the drug and the plan you have. The plan pays the rest of the cost.
However, there is a limit to how much the plan will pay for your drugs in a year. This limit is different for each plan, but in 2023, it is $4,660 on average. This limit includes both what you pay and what the plan pays for your drugs. Once you and your plan have spent this much on drugs, you enter a gap in your coverage, called the donut hole.
The donut hole is like a hole in the middle of a donut. It is a part of your drug coverage that is missing. When you are in the donut hole, you have to pay more for your drugs than before. You have to pay 25% of the cost of brand-name drugs and 75% of the cost of generic drugs. Brand-name drugs are drugs that have a specific name given by the company that makes them, like Advil or Tylenol. Generic drugs are drugs that have the same ingredients as brand-name drugs, but are made by different companies and usually cost less, like ibuprofen or acetaminophen.
The donut hole can make it hard for some people to afford their drugs, especially if they need a lot of them or they are very expensive. Some people may stop taking their drugs or take less than they need because of the donut hole. This can be bad for their health and make them sicker.
The good news is that the donut hole is not permanent. It is only a temporary gap in your coverage. You can get out of the donut hole if you spend a certain amount of money on your drugs while you are in it. This amount is called the out-of-pocket threshold. It is different for each plan, but in 2023, it is $6,950 on average1. This amount includes what you pay for your drugs in the donut hole, plus the discounts you get from the drug manufacturers. The discounts are 70% of the cost of brand-name drugs and 10% of the cost of generic drugs1. The discounts are automatically applied when you buy your drugs, so you don’t have to do anything to get them.
Once you reach the out-of-pocket threshold, you leave the donut hole and enter another phase of your drug coverage, called catastrophic coverage. In this phase, you only pay a small amount for your drugs, usually 5% of the cost or less. The plan pays the rest. You stay in this phase until the end of the year, and then your drug coverage starts over again.
What is the Medicare savings Program?
The Medicare Savings Program (MSP) is a federally funded, state-administered initiative designed to assist individuals with limited income and resources in paying for their Medicare premiums, deductibles, coinsurance, and copayments. There are four types of MSPs: (1), Qualified Medicare Beneficiary (QMB), (2), Specified Low-Income Medicare Beneficiary (SLMB) Program; (3) Qualified Individual; and (4), Qualified Disabled and working Individuals.
Each program has its own income and resource limits, which are updated annually1. For example, in 2023, the monthly income limit for an individual under the QMB program is $1,235, and the resource limit is $9,0901.
The MSP is valid in all states and the District of Columbia. However, the eligibility criteria may vary by state, as states can establish their own thresholds of income and resources. Therefore, it’s best to contact your State Medical Assistance Office to validate the criteria and apply for the program. In New York, for instance, the MSP is administered by the Medicaid program.
