WHAT IS MEDICARE?.

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Topics covered in this section…

♦ What Is Medicare?
♦ What is Medigap (supplemental) insurance?
♦ What are the enrollment requirements for Medicare coverage?
♦ Medicare Premiums & Deductibles
♦ Medicare for People with Disabilities
♦ Medicare Fraud & Identity Theft
♦ What other healthcare issues can HICAP help you with?


What is Medicare?
Medicare is health insurance for people age 65 and older as well as for those under age 65 with certain disabilities.

Medicare was implemented in 1965 and was initially designed to limit the cost of medically necessary health care for seniors.  Coverage was eventually expanded to younger people who met Social Security’s definition of disability.  In the beginning, Medicare did not pay for preventative services or prescription drugs.  Medicare gradually added coverage for many preventative services such as pap smears, mammography, and colonoscopies.  The Medicare Modernization Act of 2003 introduced Part D prescription drug coverage.  Just as Original Medicare Parts A and B have premiums, coinsurance, and deductibles, Part D Plans also have out-of-pocket costs including a coverage gap or “donut hole.”

Whether you are soon turning 65, a person with a disability, or a caregiver, knowing the facts about Medicare will benefit you and your loved ones along the way.  Explore this website to learn more, and you may always call HICAP at 1-800-434-0222 for more guidance and direction.

Important:  Medicare was never designed
to cover all of your health costs.

What are the different parts of Medicare?

Medicare has different “Parts” that cover specific services. The Medicare Parts are:

Medicare Part A (Hospital Insurance): helps cover inpatient care in hospitals and skilled nursing facilities, as well as some home health care, and hospice.

Medicare Part B (Medical Insurance for Outpatient Services): helps cover physician services, x-rays, lab services, physical therapy, speech therapy, occupational therapy, outpatient procedures, and preventive services.

Medicare Part C (Medicare Advantage): a health plan option offered by private insurance companies that contract with Medicare.  Medicare Advantage Plans provide Part A and Part B coverage plus additional benefits and cost protections through a specific network of health providers. Some Part C plans also provide Pard D drug coverage. Medicare Advantage Plans are HMOs, PPOs, Private Fee for Service Plans (PFFS), Medicare Savings Plans, and Special Needs Plans.  NOTE: if you are enrolled in a Medicare Advantage plan, you receive your health benefits through that plan rather than through Original Medicare.

for more information about Medicare Advantage plans.

for Medicare Advantage Plans in Butte, Glenn, Colusa, Plumas, & Tehama Counties.

Medicare Part D (Prescription Drug Coverage): helps cover the cost of prescription drugs and can be included in a Medicare Advantage plan or in a stand-alone plan offered by private insurance companies that contract with Medicare.

for more information on Part D plans.

for a table of stand-alone Part D plans.

What is Medigap (supplemental) insurance?

Although supplemental insurance is not considered one of the 4 parts of Medicare, supplemental plans can be helpful in keeping your health care costs manageable. Medigap is private health insurance that covers the deductibles and copayments associated with Original Medicare Parts A & B. Depending on the Medigap policy, it is possible you will have no out-of-pocket expenses for hospital or outpatient care apart from the plan’s premium.

Note: the Medigap plans currently offered for sale do not include prescription coverage.  You will need to purchase a stand-alone Part D plan.

What do Medigap policies cover?

A Medigap policy helps pay Medicare’s the deductibles, coinsurance, and copayments. The policy you purchase will determine which deductibles, coinsurance, or copays are paid. Medicare combined with a Medigap policy may be used nationally as long as the provider or facility accepts Medicare. If you have both Medicare and a Medigap policy, you do not have to go to a primary care physician to obtain an authorization for a specialist. With a Medigap, you may self-refer to any doctor who accepts Medicare.

What are the basic benefits of Medigap policies?

Medigap policies must follow federal and state laws designed to protect you when purchasing coverage. The policy must state that it is a Medicare Supplement Insurance. Insurance companies sell only standardized plans that are identified in most states by the letters A through N as of June 2010. Each individual, standardized Medigap policy must offer the same basic coverage no matter which company is selling it, though companies have the option of adding benefits to a policy. Cost is usually the only difference between specific Medigap policies sold by different companies.

A Medigap policy will be your secondary insurance to Original Medicare. If you have a Private Fee-for-Service (PFFS) plan, or a Medicare HMO or PPO under the Medicare Advantage program, it is illegal to purchase a Medigap policy unless you are switching back to Original Medicare. NOTE: A Medigap policy will not cover the copays, coinsurance, or deductibles of a Medicare Advantage plan.

What are the costs of Medigap policies?

Although Medigap policies are standardized, premiums vary from company to company. Companies use three rating methods to determine the premium:

♦ Issue Age — Premiums and future increases are based on the age of the beneficiary when the policy is issued.

♦ Attained Age — Premium increases are based on the beneficiary’s age at the time of the increase.

♦ Community Age — Premiums and future increases are based on the average age of all beneficiaries in the plan.

Once a Medigap policy is sold, it can only be terminated for failure to pay premiums. Companies may increase premiums, however, due to rising health care costs, inflation, and increasing age of beneficiaries.

Companies may charge a higher premium to a Medicare beneficiary under 65 who has a disability than to a person 65 years or older applying for the same policy.

It is recommended to compare quotes from a minimum of three companies. Go to the California Department of Insurance website by clicking below or contact HICAP at 1-800-434-0222 to schedule a one-on-one appointment.

for a list of companies selling Medigap policies in California.

What should I consider when purchasing a Medigap policy?

♦ You must have Medicare Parts A and B to buy a plan.

♦ You pay a monthly premium to the private insurer.

♦ A Medigap policy does not cover more than one Medicare beneficiary.

♦ There are certain enrollment and guaranteed issue rights for Medicare-eligible people. See Enrollment Periods/Guaranteed Rights for more details.

♦ If you have a Medicare Advantage Plan, it is illegal for anyone to sell you a Medigap policy unless you are switching back to Original Medicare.

♦ If you have an older Medigap policy that includes prescription coverage, you cannot purchase a Medicare Part D prescription plan.

♦ Employer, union, or retiree group plans may offer coverage similar to or better than a Medigap. See Employer Group and Retiree Health Plans for more information.

♦ An insurance agent or broker cannot sell you a Medigap policy if you have Medi-Cal/Medicaid with no Share of Cost (SOC).

What is the Medigap birthday rule?

If you already have a Medigap policy, you may replace your current policy with one that has the same or fewer benefits for 30 days starting on your birthday without being denied coverage for pre-existing conditions.

I am on Medi-Cal with a Share of Cost (SOC). Should I purchase a Medigap policy?

If you have Medi-Cal with a Share of Cost (SOC) or monthly deductible, the purchase of a Medigap plan may help you lower or eliminate your SOC.  If you have full Medi-Cal  with no Share of Cost (no SOC), you cannot purchase a Medigap policy.

Call HICAP at 1-800-434-0222 for more information.

What are the enrollment requirements for Medicare coverage?

Medicare Part A There is no monthly Part A premium for people who have at least 40 quarters of Social Security credits. People who have contributed less than 40 quarters to Social Security and meet the citizenship and residency requirements may be eligible to purchase Part A for a monthly premium.

You will be automatically enrolled in Part A the month of your 65th birthday if you are receiving retirement benefits from Social Security or the Railroad Retirement Board.  If you are not receiving retirement benefits from Social Security (1-800-772-1213) or from the Railroad Retirement Board (1-877-772-5772), you will need to contact these agencies three months before you turn 65 in order to enroll in Medicare Part A.

If you are a person with a disability, you will usually be enrolled in Part A effective the 25th month of receiving Social Security Disability Insurance (SSDI).  People diagnosed with End-Stage Renal Disease (ESRD) or Amyotrophic Lateral Sclerosis (ALS) will be eligible sooner.  Contact Social Security (1-800-772-1213) for your enrollment benefits.

Medicare Part B Part B has a monthly premium based on your income.  Like Part A, you will automatically be enrolled in Part B at age 65 if you are already collecting Social Security or Railroad Retirement benefits. If you are not receiving Social Security (1-800-772-1213) or Railroad Retirement (1-877-772-5772), you will need to contact these agencies three months before you turn 65 in order to enroll in Medicare Part B.

If you are a person with a disability, Part B enrollment is effective the 25th month of receiving Social Security Disability Insurance (SSDI) unless you are diagnosed with End-Stage Renal Disease (ESRD) or Amyotrophic Lateral Sclerosis (ALS), in which case you will be eligible for Medicare sooner.

You may be able to defer enrollment into Part B if you are covered by the group health plan of a large employer (more than 20 employees) based on your own active employment or that of your spouse. It is best you consult your employer benefits administrator for advice. Contact HICAP at 1-800-434-0222 for more information.

Medicare Part C (Medicare Advantage) It is optional to enroll in a Medicare Advantage Plan or Part C.  If you want to enroll in one of these plans, you must be entitled to both Parts A and B. The Initial Coverage Election Period (ICEP) can be 3 months or 7 months depending on when the enrollment in Part B took place.

NOTE: If you have End-Stage Renal Disease you will not be able to enroll in a Medicare Advantage Plan.

You may also enroll in a Medicare Advantage Plan during the Annual Election Period (AEP) that runs from October 15th through December 7th each year, for an effective date of January 1.

Medicare Prescription Part D If you are newly eligible for Medicare, the Initial Enrollment Period (IEP) for Part D is the same as the IEP for Parts A and B.  To enroll in Part D, you must be enrolled in either Part A or Part B or both.  People who have Medicare due to a disability have another IEP for Part D when they turn 65.

If you don’t enroll in Medicare Part D during this Initial Enrollment Period and you are not eligible for Low-Income Subsidy (LIS), you can only enroll during the Annual Election Period (AEP) that runs from October 15th through December 7th or during a Special Election Period (SEP) due to certain circumstances.  Contact HICAP at 1-800-434-0222 to learn more about Special Election Periods.

for more information on Medicare Enrollment Periods.

Medigap (Supplemental) Insurance
To enroll in a Medigap policy, you must have Medicare Parts A and B.  If you are turning 65 or older, your 6-month Open Enrollment period for a Medigap policy begins the date your Part B becomes effective.  Plans are required to sell you a policy and charge you their lowest premium for your age group regardless of pre-existing health conditions.  You may apply for a policy prior to the effective date of your Part B and request your benefits begin the same date as your Medicare to avoid a break in coverage.

In California, if you become eligible for Medicare due to a disability other than End-Stage Renal Disease (ESRD), you also have a 6-month Open Enrollment period once your Part B becomes effective.  If you are notified retroactively of your Medicare eligibility, your Open Enrollment period begins the date you receive notice from Social Security of your right to receive Medicare benefits.  NOTE: plans have the right to charge you a higher premium based on your Medicare status.

If you were eligible for Medicare prior to your 65th birthday due to a disability, you are also entitled to an Open Enrollment period at age 65 regardless of pre-existing health conditions including End-Stage Renal Disease (ESRD).

What happens if I do not enroll in Medicare or a Medigap when I first become eligible?
Medicare Part A If you do not enroll in Part A when you are first eligible, you will have to wait until the General Enrollment Period (GEP) to do so and your benefits will not begin until the following July. You will be assessed a 10 percent penalty of the amount of the Part A premium at the time of enrollment. The penalty is assessed for twice the number of years you delayed enrolling in Medicare.

Medicare Part B If you do not enroll in Part B when you are first eligible and do not qualify for a Special Election Period (SEP), you will have to wait until the General Enrollment Period (GEP) to do so and your benefits will not begin until the following July.  You will be assessed a 10 percent penalty for each, full 12-month period that you qualified for coverage but did not have it.  The penalty will be added to your monthly premium.  Contact Social Security at 1-800-772-1213 for more detailed information.

Medicare Part D If you do not join a Part D Plan when initially eligible, do not qualify for Low-Income Subsidy (LIS) or a Special Election Period (SEP), and do not have creditable prescription coverage, you will not be permitted to enroll until the Annual Election Period (AEP).  You may also incur a late enrollment penalty. The penalty is 1% of the average national premium for every month you were eligible and did not sign up. This amount is added to your drug plan premium and you pay it as long as you are in a Part D plan or MA plan with prescription drug coverage.

For more information, contact HICAP at 1-800-434-0222.

What are “Guaranteed Issue Rights” under Medicare?
Guaranteed Issue Rights, also called “Medigap Protections,” are rights you have in certain situations when insurance companies are required by law to sell or offer you a Medigap policy. In these situations, an insurance company can’t deny you a policy, or place conditions on a policy, such as exclusions for pre-existing conditions, and can’t charge you more for a policy because of past or present health problems.

Examples of circumstances in which a beneficiary has Guaranteed Issue Rights to purchase a Medigap include:

♦ The 6-month Open Enrollment period at age 65 or older that begins on the effective date for Part B

♦ Your employer-sponsored retiree health plan supplementing Medicare involuntarily terminates

♦ You move out of the service area of your Medicare Advantage Plan

♦ Your Medicare Advantage plan terminates coverage in your service area

NOTE: Depending on your circumstances, the duration of your Guaranteed Issue Rights vary.  For more information, schedule a one-on-one appointment with HICAP at 1-800-434-0222.

Medicare Premiums & Deductibles

Medicare premiums and deductibles are legislated by the US Congress and change every year. Premiums are based on the individual’s or couple’s incomes.

for the current year’s rates.

For more information, contact HICAP at 1-800-434-0222 to schedule a one-on-one appointment.

Medicare for People with Disabilities

I’m disabled, how do I become eligible for Medicare?
If you qualify for Social Security Disability Insurance (SSDI), you may be eligible for Medicare even if you have not reached age 65. Medicare benefits generally will not be effective, however, until 24 months after the date Social Security determines you were disabled. People diagnosed with ALS (Lou Gehrig’s Disease) or End-Stage Renal Disease (ESRD) are eligible for Medicare sooner.  For more information, contact Social Security at 1-800-772-1213 or www.ssa.gov

For more general information regarding your benefits, please explore the pages of this website that explain Medicare coverage and options, or call HICAP at 1-800-434-0222 to schedule a confidential appointment.

What other health care coverage is available?
Depending on your circumstances, you may be eligible for health benefits through:

♦ Your employer

♦ Your spouse’s or parent’s employer

♦ Medi-Cal (Medicaid)

♦ Medicare Savings Programs

♦ Workers Compensation

♦ Veteran’s Administration

♦ Tricare (for retired military)

For more information, call HICAP at 1-800-434-0222 to schedule a confidential appointment.

What happens to my Medicare coverage when I turn 65?
People who have Medicare due to a disability have another Initial Enrollment Period (IEP) for Medicare Advantage Part C and Part D Prescription Coverage when they turn 65.  People diagnosed with End-Stage Renal Disease (ESRD), however, may not enroll in Medicare Advantage Part C.

If you were eligible for Medicare prior to your 65th birthday due to a disability, you are entitled to an Open Enrollment period for Medigap (Medicare Supplemental Insurance) at age 65 regardless of pre-existing health conditions including End-Stage Renal Disease (ESRD).

For more information, call HICAP at 1-800-434-0222 to schedule a confidential appointment.

Medicare Fraud & Identity Theft

What is Identity Theft?
Identity theft is a serious crime that occurs when someone steals another’s personal, identifying information for the purpose of using that information fraudulently. Personal identifying information includes Social Security numbers, Medicare and Medi-Cal ID numbers, credit card and bank account numbers, patient records, and computer usernames and passwords. Fraudulent uses of this information can include opening new credit accounts, taking out loans in the victim’s name, stealing money from financial accounts, billing Medicare for services that you didn’t get, or using available credit.

Sometimes identity theft is the result of a computer or institutional security breach. Other times, family members, friends, or acquaintances improperly access and use someone’s information for their own benefit. In other instances, strangers rely on the trusting nature of victims to solicit personal information to use fraudulently.

How do I protect myself from Identity Theft?
Do not inadvertently contribute to identity theft!  Be protective of your personal information. Beware of unsolicited calls, e-mails, and visitors requesting personal, identifying information. It is possible they are fraudulently impersonating financial, medical or insurance organizations. Before you trust a stranger with your information, verify they are who they say they are.

Let’s see some examples:

1. Your telephone rings and you answer it. The person on the other line calls you by name and says, “Good morning. I am calling from the Nevada Social Security office and I need to update your personal information for our files.” You proceed to give the caller the requested information. A few months later, you try to use your prescription Part D card at the pharmacy and are told you have no coverage. Why? The call you received a few months ago was not, in fact, from Social Security but from a private insurer that switched you to their plan.

2. A family member uses your personal information to fraudulently impersonate you without your knowledge. Soon after they leave town, you discover they have maxed out a credit card in your name and emptied your bank accounts. You find yourself penniless and working with Adult Protective Services and the police to clean up your credit report and get back on your feet.

Don’t let these scenarios happen to you!

What is Medicare Fraud and where would I see it?
Medicare Fraud occurs when someone INTENTIONALLY misrepresents services or equipment, resulting in payment of an UNAUTHORIZED benefit to a person or an organization. These fraudulent expenses ultimately cost the Medicare program and you, the beneficiary.

Examples of Medicare Fraud include:

♦ Fraudulent billings from nursing homes, hospitals, and hospices (Medicare Part A)

♦ Fraudulent billings for providers’ services (Medicare Part B)

♦ Fraudulent billings for Durable Medical Equipment (DME) such as wheelchairs, walkers, electric scooters, and incontinence supplies

♦ Pressure sales, usually door-to-door or over the telephone, offering a free prescription plan (Medicare Part D) or saying you have to change your Medicare coverage because your Medicare benefits have decreased.

How can I protect myself from being a victim of Medicare Fraud?
You can protect yourself from Medicare Fraud by doing the following:

♦ Review your Medicare Summary Notice to ensure you did, in fact, receive the services, supplies or equipment for which Medicare has paid.

♦ Sign up with “My Medicare” to see your Medicare Summary Notices online at www.MyMedicare.gov.

♦ Protect your Medicare and Social Security number.

♦ If someone is trying to convince you that you need a certain service, piece of equipment, or to see a doctor that you, in fact, do not need, DECLINE.

♦ Ask questions regarding what services you are receiving and why. BE INFORMED about your Medicare-billed care.

♦ NEVER purchase or accept medical supplies from door-to-door salespeople.

♦ Do not give out any of your personal information such as your Medicare number, Social Security number, banking information, and credit card numbers to anyone you do not know or whose business you did not solicit.

What do I do if I suspect Medicare Fraud?
If you suspect Medicare Fraud, you can take some of the following steps.

♦ Call HICAP at 1-800-434-0222.  This HICAP belongs to the Senior Medicare Patrol (SMP) for reporting fraud.

♦ Call Medicare at 1-800-MEDICARE.

♦ Call the Inspector General’s Medicare Fraud Hotline at 1-800-477-8477.

What other healthcare issues can HICAP help you with?

Long Term Care Considerations:

Long-Term Care (LTC) insurance only pays for long-term care. Long-term care usually means supervision or assistance with everyday tasks like bathing and dressing and does not require a licensed person to provide those services. Some of these policies only pay for care in institutional settings such as a nursing home or an assisted living facility; some only pay for home care; while other more comprehensive policies pay for care in a nursing home, assisted living facility, at home, or in community settings like adult day care.  Some life insurance policies and annuities also contain benefits for long-term care.

If you are considering buying LTC insurance, you will need to do some research to find the best set of benefits for your particular circumstances, and the best company for those benefits. You will also need to consult your accountant or tax advisor to understand any tax issues that might affect you. Counselors from the California Health Insurance Counseling and Advocacy Program (HICAP) can help you:

♦ Sort through some of these issues

♦ Understand how these benefits work

♦ Compare benefits and features of several policies

♦ Compare policies from more than one company

To make an appointment for HICAP counseling, call 1-800-434-0222.

For more detailed information on Long-Term Care Insurance…

for Frequently Asked Questions About Long-Term Care Insurance

for Overview of Long-Term Care Insurance

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