The A, B, C & D of Medicare
………Information you need when planning for Long Term Care services
Medicare – we all know what Medicare is, or THINK we know, especially those of us over 50. We like to think of ourselves as being knowledgeable on what Medicare is and what it pays for. Take a few moments and try your hand at the following True/False questions:
- Medicare pays for 100 days of care in a skilled nursing facility (SNF).
- Medicare pays 100% of the SNF bill for the full 100 days.
- Medicare pays for Assisted Living services.
- You have to be 65 years or older to be eligible for Medicare.
- Private insurance companies do not offer Medicare plans.
Let’s see how you did by reviewing the following information about the Medicare Program. The information can seem pretty complex, and in reality it is. For more detail information visit Medicare’s website, https://www.medicare.gov/
Medicare is a government program that’s federally funded, but State operated.
The Centers for Medicare and Medicaid Services (CMS) is the Federal agency that governs the Medicare program. It provides financial funds to each State to operate the program. CMS sets all the rules for the States to carry out.
The Medicare Program has 4 Parts: Part A, Part B, Part C & Part D.
Medicare Parts A, B, C & D are separate from each other; they are not an inclusive package.
Medicare Part A
Medicare Part A is often referred to as Hospital Insurance, and the “Original Medicare.” It’s the major health insurance plans for those who are eligible.
Medicare Part A Costs
- Medicare Part A does have annual deductible amounts, depending on what type of care you receive. CMS sets the rates each year.
- For example, for 2019, Part A requires that a patient pay a deductible of $1,364 for an inpatient hospital admission.
- Depending on the type of care you receive, there may also be a co-pay (coinsurance) amount that you are responsible to pay. For example:
- Medicare Part A pays for days 1-20 of a SNF qualified admission at 100%.
- For days 21 up to 100, the resident is required to pay a co-pay amount.
- CMS sets the co-pay amount annually. For 2019, the daily co-pay rate is $170.50
If you have a supplemental insurance plan, it may pay for the deductible and/or co-pay amounts.
Medicare Part B
Generally, Medicare Part B can be thought of as covering “out-patient” services or treatments. In other words, you are able to receive the services or treatments without being admitted to a hospital.
Medicare Part B generally pays for out-patient services that are within two categories:
- Medically necessary: CMS sets the criteria for medical necessity. State Medicare reimbursement agencies determine whether the service or treatment meets the criteria.
- Examples include: physician visits, diagnostic tests, therapy services (physical, occupational and speech), durable medical equipment (canes, blood sugar monitors, blood sugar test strips, wheelchairs, oxygen equipment, etc.
- Preventive Services: Services to maintain one’s health, and to detect early signs of illness.
- Examples include: various health screenings, and shots (flu, pneumonia and hepatitis.)
Medicare Part B Costs
Medicare Part B has a monthly premium, an annual deductible, and co-pay requirements.
Medicare Part B Premium
- The premium is set by CMS and can change each year.
- The monthly premium is based on a person’s annual income.
- For 2019, the premium will range between $135.50 - $460.50 per month.
Medicare Part B Deductible
CMS determines the annual deductible. Medicare Part B will not reimburse for services or treatments until the annual deductible is met.
- For 2019, the annual deductible is $185.
Medicare Part B Co-pay
- Medicare Part B requires that a person pay a 20% co-pay amount, meaning 20% of the cost for the service or treatment.
- For example if a service costs $100, the person is responsible to pay $20 (20%) and Medicare Part B will pay $80 (80%).
If you have a supplemental insurance plan, it may pay for the co-pay amounts.
Medicare Part C
Medicare Part C is almost the same as Medicare Part A.
- CMS allows private insurance companies to administer Medicare Part A.
- The plan is referred to as Medicare Part C or Medicare Advantage Plan (MAP.)
- It is similar to a managed care health insurance plan, in that the insurance company is reimbursed a specific amount, regardless of the expenses incurred by the company.
- Medicare Part C eligibility requirements are the same as Medicare Part A.
- The major differences between Medicare A and Medicare Part C:
- The companies are permitted to have different coverage guidelines.
- The cost, such as premium, deductibles, and co-pays are set by the company.
- Medicare Part C plans will also offer Medicare Part B and Part D plans within the overall plan.
Which should you select – Medicare Part A or Medicare Part C?
- The key is to look at your personal needs to determine which plan best meets your needs.
- Re-assess your needs on an annual basis to make sure the plan you select works for you.
Medicare Part D
Medicare Part D is a prescription drug plan (PDP.)
- If you are eligible for Medicare Part A/Part C, you will be eligible to enroll in Medicare Part D.
- There are numerous Medicare Part D plans to choose from. As with choosing between a Medicare Part A or Part C plan, choose the plan that meets your prescription medication needs.
- Often, pharmacies will assist in evaluating your prescriptions to the drug plans available, to fine the most cost effective plan for you.
Medicare Part D Costs
The cost of a Medicare Part D plan, including premiums, deductibles and co-pay amounts, will vary depending on such things as:
- Your prescription medications.
- If the medications are on the plan’s formulary (list of medications the plan will cover and the dollar amount of coverage.)
- Whether the pharmacy you use is in your plan’s network.
- The type of plan you choose.
So, how did you do on the True/False questions at the beginning of the blog?
I hope you either knew, or now know, that all of them are FALSE. You can see that Medicare can be a very complex area to understand, even for those of us who work with it on a daily basis! We often consult the CMS website and other resources for coverage and reimbursement guidelines.
Of course, knowing about the Medicare Program takes on special importance when helping a Loved One plan for a Skilled Nursing Facility (SNF) stay.
Let’s take a scenario where a person qualifies for Medicare Part A coverage in the SNF.
What do I mean by qualifies? CMS has criteria a person must meet to qualify for Medicare Part A coverage in a SNF. These are discussed, in depth, in my courses, specifically, “The Foundation” course.
- Medicare will pay for days 1-20 of the SNF stay at 100%
- For days 21 up to 100, your Loved One will be responsible for paying a co-pay amount of $170.50 per day (year 2019 amount.)
- If your Loved One has a stay of 30 days, s/he will be responsible to pay the SNF $3,590 (20 days x $179.50/day.)
- Do you know how your Loved One will pay the $3,950?
- Does your Loved One have an insurance policy that will cover the amount?
- If no insurance policy, can your Loved One pay for this “out of pocket”?
- And finally, if your Loved One has no financial means, will your Loved One qualify to apply for Medicaid services?
These are the kinds of things that are best planned for ahead of time, rather than in an emergency situation.
That’s exactly why I developed Your Long Term Coach, and my convenient online courses. I break down complex information about Long Term Care, so that have the confidence to help a Loved One.