Medicare FAQs | Social Security Disability

The following section answers common questions you may have about Medicare. Additionally, if you have specific questions about Allsup Medicare Advisor®, please click here for information if you are eligible for Medicare due to a disability, or click here if you are eligible due to your age (65 and older).

You may click on each of the following topics to jump directly to related FAQs or scroll down for a variety of Medicare FAQs. Also check out our Medicare discussion in our Forum.

Allsup Medicare Advisor FAQs
General
Original Medicare and Medigap
Medicare Advantage Plans - Overview
Medicare Advantage Plans - Types of Plans
Other Medicare Plans
Medicare Part A (hospital)
Medicare Part B (medical)
Medicare Part C (Medicare Advantage)
Medicare Part D (prescription drug coverage)
Special Circumstances
Employer Coverage and Medicare
Cost Sharing
Creditable Coverage Under Medicare
Extra Help - Low Income Subsidy

General

1. What is Medicare?

Medicare is a federally-funded health insurance program. Medicare has four parts: Part A, Part B, Part C and Part D.

2. What does Medicare Part A cover?

Medicare Part A is hospital insurance and helps cover inpatient care in hospitals. Part A also helps cover skilled nursing facilities, hospice and home healthcare if certain conditions are met.

3. What does Medicare Part B cover?

Medicare Part B is medical insurance and helps cover medically-necessary services such as doctors’ visits and outpatient care. Part B also helps cover some preventative services, such as flu shots, mammograms and Pap tests.

4. What does Medicare Part C cover?

Medicare Part C (also called Medicare Advantage) is another way to get Medicare benefits. Medicare Part C combines Part A, Part B and, sometimes, Part D (prescription drug coverage).

5. What does Medicare Part D cover?

Medicare Part D helps cover prescription drugs.

6. How do I become eligible for Medicare?

Generally, there are several ways to become eligible for Medicare:

If you are not a veteran, eligible for Social Security or Railroad Retirement Board (RRB) benefits, when you turn 65, you are eligible for Medicare.
If you get Social Security retirement benefits or receive benefits from the Railroad Retirement Board (RRB), you will be considered eligible.
If you’re awarded Social Security Disability Insurance benefits for something other than Lou Gehrig’s disease (ALS), you will become eligible for Medicare 24 months after the date of entitlement to cash benefits.
If you have ALS, you will automatically be eligible for Medicare once you begin getting Social Security Disability Insurance (SSDI).
If you have been diagnosed with ESRD or kidney failure, you will be eligible for Medicare three months after starting dialysis. If you choose self-dialysis, then Medicare coverage begins retroactively to the first month of dialysis.

7. How do I enroll in Medicare?

If you are aged 65 or older and are not disabled, getting benefits from Social Security or the RRB and have not been awarded SSDI benefits, you will need to contact the Social Security Administration (SSA) office to enroll.

If you are getting Social Security or RRB benefits, have been awarded SSDI benefits or have been diagnosed with ALS, you will be automatically enrolled in Medicare. If you have been diagnosed with ESRD, you will need to contact the SSA to enroll.

8. Once I’m eligible for and enrolled in Medicare, what do I do?

Once you’re enrolled in Medicare, you’ll have a variety of options to choose from to get complete coverage. You can either choose a single plan to cover all your needs or you can choose a combination of plans. But before you make a decision, you should assess your health and finances and compare these with the Medicare options available to you. Your Medicare options will generally fall under two main categories: original Medicare (also known as traditional Medicare, which includes Part A and Part B) and Medicare Advantage plans. There also are other specialized Medicare plans available.

9. What is CMS?

CMS stands for Centers for Medicare & Medicaid Services, the agency within the U.S. Department of Health and Human Services that oversees Medicare, Medicaid, the State Children’s Health Insurance Program and other programs.

10. What are my rights and protections under Medicare?

No matter what kind of coverage you have, you have the right to:

Get a decision regarding coverage and payment of healthcare services
Appeal a decision regarding payment and coverage
Get emergency and urgently-needed care
Get information on covered services and costs
File complaints, including quality-of-care complaints
Non-discrimination
Know treatment options and participate in treatment decisions
Privacy and confidentiality

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Original Medicare and Medigap

11. What is the original Medicare Plan?
Original Medicare includes Part A and Part B coverage. People who have original Medicare and do not want to replace it with a Medicare Advantage plan can add prescription drug coverage with a Part D plan. Participants also can choose to buy a Medigap (Medicare supplement insurance) policy to help fill the gaps in Part A and Part B coverage.

12. What is Medigap?
The term Medigap, also known as Medicare supplement insurance, refers to insurance policies sold by private insurance companies to fill the “gaps” in original Medicare coverage. An example of a gap would be the 20 percent co-insurance amount due on a Medicare Part B claim for a medical visit.

13. Who is eligible for Medigap?

If you have Medicare, you are also eligible for Medigap (though your Medigap options may be limited if you are under 65 and qualify for Medicare based on a permanent disability). You can only use a Medigap plan if you have original Medicare. If you choose to use a Medicare Advantage plan instead, it is illegal for someone to sell you a Medigap policy.

14. When can I enroll in a Medigap plan?

Medigap coverage can be purchased at any time. However, if it is not purchased during the defined open enrollment periods or when you are eligible for the guaranteed issue right, an insurance company can use medical underwriting, which means the company can decide whether or not to accept your application and set different terms, such as waiting periods and premiums.

15. When is the initial enrollment period for Medigap coverage?

For most, the initial enrollment Medigap period is the six-month period that begins on the first day of the month in which you turn age 65 or older AND enroll in Part B. For those under 65, the ability to purchase a Medigap policy varies by state.

16. What is medical underwriting?

Medical underwriting is the insurance company’s ability to decide, based on pre-existing conditions, whether or not to accept your application, add a waiting period for coverage of pre-existing conditions, and/or how much to charge for insurance coverage.

17. What is a pre-existing condition?

A pre-existing condition is a health problem that you had before the new insurance policy starts. When applying the pre-existing condition clause, the insurance company can make you wait for coverage for any health problem. This period is called a waiting period and usually lasts six months. However, during this time, original Medicare will cover this condition.

18. What if I apply for coverage during a time other than open enrollment?

If you are applying for coverage and it is not during the open enrollment period, the insurance company must shorten or eliminate the waiting period if you had creditable coverage.

19. What is creditable coverage under Medigap?

Creditable coverage for Medigap purposes is when you have continued to have insurance coverage and there was no break in coverage for more than 63 days prior to purchasing Medigap insurance.

20. What are the guaranteed issue rights, or Medigap protections, for individuals interested in Medigap plans?

There are certain guaranteed issue rights, or Medigap protections, for individuals interested in Medigap plans. For example, you may purchase a Medigap policy when outside the open enrollment period or without creditable coverage if you are in a Medicare Advantage plan and are leaving the service area and you are going back to traditional Medicare; if your employer group, retiree or COBRA coverage that supplements what Medicare pays is ending; if you move out of the Medicare SELECT (supplement insurance) plan’s area; if the Medigap insurance company goes bankrupt; or you can demonstrate that the Medicare Advantage plan or Medigap plan you are currently in misled you.

21. What do I do if I want a Part D plan along with my Medigap coverage?

If you already have Medigap coverage and decide to enroll in a Medicare Part D plan, you should let your Medigap plan know. They will need to remove the prescription drug portion from your Medigap policy and reduce your monthly premiums.

22. Are there standardized Medigap plans?

Yes, there are standardized Medigap plans. They are identified by letters ranging from A through L.

23. Do any of the Medigap plans offer prescription drug coverage?

Yes. H, I and J policies purchased prior to January 2006 (the start of the Medicare prescription drug benefit, also called Part D) offer drug coverage. However, H, I and J plans purchased after January 1, 2006, do not offer drug coverage because those same drugs may be covered under Medicare Part D. If you have the old H, I or J plan and are considering a change, you should carefully evaluate your options to ensure that the coverage you choose is right for you.

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Medicare Advantage Plans

24. What is a Medicare Advantage plan?

Medicare Advantage plans are health plan options approved by Medicare and administrated by private companies. Some Medicare Advantage plans offer drug coverage.

25. Are Medicare Advantage plans considered Medigap plans?

No. Medigap plans are purchased to supplement original Medicare. Medigap plans pay for cost-sharing charges. Essentially, these plans “cover the gaps” in original Medicare coverage.

Medicare Advantage plans actually replace original Medicare. When a beneficiary opts to enroll in a Medicare Advantage plan, the privately administered plan provides their Medicare coverage. By law, Medicare Advantage plans must cover everything covered under Traditional Medicare Parts A and B. Medicare Advantage plans may also offer additional benefits (like Medigap) and prescription drug coverage (like Medicare Part D).

26. Do I need a Medigap policy if I choose to enroll in a Medicare Advantage plan?

No. When you enroll in a Medicare Advantage plan, Medigap will not cover Medicare benefits nor any health plan deductibles, co-insurance or copays for you.

27. When can I enroll in a Medicare Advantage plan?

When first eligible for Medicare at age 65 or the 25^th month of disability benefits:

You can enroll three months before you turn 65, during the month of your 65^th birthday and for three months after and still have your coverage effective on the day you first became eligible (usually the first of the month after your 65^th birthday).
If you are under 65 and become eligible for Medicare due to disability, you can enroll in Medicare the 25^th month after you began receiving Social Security Disability Insurance (SSDI) benefits.

Annual enrollment:

Each year from November 15 to December 31, you can change plans, with the change effective January 1 of the following year.
Each year from January 1 to March 31, you can change your plan as long as you continue with the same Part D decision made at the end of the previous year.

Special enrollment periods (when certain criteria are met):

Special enrollment rules allow you to drop, add or change plans under certain circumstances. For example, if you move out of a plan’s service area, have both Medicare and Medicaid, live in an institution as defined by CMS to be a long-term care facility such as skilled nursing facility (but not an assisted living or residential home), or are a member of a special needs plan (SNP), you can change plans as needed. Also, if you feel you have been mislead when you joined a plan, you can request that CMS allow you to change plans, even if it is outside the open enrollment period.

28. Once I enroll in a Medicare Advantage plan, when does it become effective?

Your effective date will depend upon which enrollment period applies to you.

If you enrolled when you were first eligible for Medicare, your effective date will be retroactive to the date of your eligibility.
If you enrolled during a regular annual election period, your effective date will be January 1 of the following year.
If you enrolled during the open enrollment period, your effective date will generally be the first day of the month after which the Medicare Advantage organization received your enrollment form.
If you enrolled during a special enrollment period, your effective date may vary depending upon your circumstances.

If you choose to enroll in a Medicare Advantage organization, you should ask them when your effective date will be.

29. Do Medicare Advantage plans cover emergency or urgently needed care?

Yes, all plans must cover all Medicare Parts A and B services, including emergency and urgently needed care.

30. When do plan coverage details change for Medicare Advantage plans?

The private insurance company’s contract with CMS to administer a Medicare Advantage plan is on a calendar year. This means plan benefits and rules changes can occur annually, effective January 1 of each year. If you are enrolled in a Medicare Advantage plan, they are required to send you notification of any plan changes that may occur in advance so you can make a decision as to what to do.

31. Will I receive written confirmation of my Medicare Advantage plan benefits?

Yes. When you are newly enrolled, you will receive a letter from the plan letting you know your enrollment was successful. If the plan needs more information to finish processing your enrollment, they will let you know in writing. Also, at the time you enroll and every year that you’re a member of the plan, the Medicare Advantage plan will send you an Annual Notice of Change (ANOC) and Evidence of Coverage (EOC) explaining the plan rules, letting you know how much your coverage will cost and providing you with any information on benefit changes that will be effective in January of the next year. The EOC is available on the Medicare Advantage plan’s Web site as well.

32. Which Medicare Advantage plans do not offer prescription drug coverage?

Some plans, such as Medicare medical savings accounts and certain Medicare private fee-for-service (PFFS) plans, do not offer prescription drug coverage. Because the Medicare Advantage plans are administrated by private companies, they vary widely. It is very important to ask questions about prescription drug coverage.

33. What happens if the Medicare Advantage plan selected does not offer prescription drug coverage?

If a Medicare Advantage plan does not offer drug coverage, you may be able to join a Medicare prescription drug plan (Part D).

34. Do Medicare Advantage plans have deductibles?

Medicare Advantage plans are approved by Medicare and administered through many different private insurance companies. Because they are privately run, plan costs, such as deductibles, copayments or co-insurance and premiums will differ. It is important that you check into the costs for each Medicare Advantage plan you are considering.

35. What type of costs can I expect with a Medicare Advantage plan?

Medicare Advantage plans vary, but there are some expenses you may be responsible for, including:

Premiums: There may be a monthly plan member premium. This is a set amount approved by CMS that the Medicare Advantage plan charges the beneficiary for membership. Members pay the Medicare Advantage premium in addition to their Part B premium. Some plans offer the option of automatically deducting the premium from a member’s Social Security check.
Deductible: Some Medicare Advantage plans require beneficiaries to pay a certain amount before their plan begins to pay a portion of the costs. This amount is referred to as the deductible.
Copayments: As with regular insurance plans, you will pay a portion of the cost for the services or prescription drugs you use. Some Medicare Advantage plans charge members a copayment, or flat fee, for medical services, like doctor’s appointments and hospital stays. If you have a Medicare Advantage plan that includes prescription drugs, you may also pay a copayment for any medicines you buy.
Co-insurance: Medicare Advantage plans can choose to charge members co-insurance instead of a copayment. While a copayment is a flat fee, co-insurance is a percentage of the cost of the medical service or prescription drug purchased.If you choose a plan that charges co-insurance instead of a copayment, your costs may vary depending upon the cost of the medical service or prescription drug (if you’ve chosen a Medicare Advantage plan with drug coverage) provided.

36. Does everyone pay the same amount for Medicare Advantage plan membership?

In general, yes. CMS does not allow Medicare Advantage plans to charge members different amounts for membership in the same plan, regardless of their medical condition. The only exception is those members with Medicare and Medicaid who may be able to pay less or those who are eligible for low-income subsidy (LIS).

37. When can you join, switch or drop a Medicare Advantage plan?

You can join, switch or drop a Medicare Advantage plan:

When you first become eligible for Medicare (three months before you turn 65 and up to three months after the month you turn age 65).
If you get Medicare due to a disability, you can join during the three months before and up to three months after your 25^th month of entitlement to cash disability benefits.
From November 15 to December 31 of each year. Your coverage will begin on January 1 of the following year.
From January 1 to March 31 of each year; however, you can’t add or change to a plan with prescription drug coverage during this time unless you already have Medicare prescription drug coverage.
In certain situations, you may be able to join, switch or drop Medicare Advantage plans at other times (like if you move out of the service area, have both Medicare and Medicaid or live in an institution).

38. What happens if my Medicare Advantage plan leaves the Medicare Program?

If your plan leaves the Medicare program, the plan will send you a letter about your options. Generally, you will be automatically returned to the original Medicare plan if you don’t choose to join another Medicare Advantage plan. You also will have the right to purchase a Medigap policy.

39. What are the special rules regarding eligibility for people with ALS (Amyotrophic Lateral Sclerosis or Lou Gehrig’s disease)?

People with ALS automatically get Medicare Part A and Part B the month their disability benefits begin.

40. What is not covered by Part A and Part B?

Acupuncture
Chiropractic services, except to correct a subluxation (when one or more of the bones in the spine move out of position) using manipulation of the spine
Cosmetic surgery
Custodial care (like help with bathing or using the bathroom) except when you also get skilled nursing care in a skilled nursing facility, at home or in a hospice
Deductibles, co-insurance or copayments for certain healthcare services
Dental care and dentures
Eye care, eye exams (except for people with diabetes to check for diabetic retinopathy), eye refractions and eyeglasses (except after cataract surgery that implants an intraocular lens)
Foot care (routine), such as cutting corns or calluses
Hearing aids and exams for the purpose of fitting a hearing aid
Hearing tests that haven’t been ordered by a doctor
Laboratory tests for screening purposes, except cardiovascular, colorectal, diabetes and prostate cancer screenings
Long-term care for custodial care in a nursing home
Orthopedic shoes
Physical exams (routine or annual). Medicare will cover a one-time physical exam within the first six months of enrolling in Part B.
Prescription drugs
Shots to prevent illness (except flu shots, Hepatitis B shots and pneumococcal shots)
Syringes or insulin, unless the insulin is used with an insulin pump, but it may be covered by Medicare prescription drug coverage (Part D)
Healthcare while traveling outside the United States except when you travel on the most direct route through Canada between Alaska and another state. Medicare also covers hospital, ambulance and doctor services if you are in the U.S., but the nearest hospital that can treat you isn’t in the United States (The “United States” includes the 50 states, the District of Columbia, Puerto Rico, the Virgin Islands, Guam, the Northern Mariana Islands and American Samoa.). In some limited cases, Medicare may pay for services you get while on board a ship within the territorial waters adjoining the land areas of the United States.

41. Are the services listed above covered by Medicare Advantage plans?

Medicare Advantage plans are approved by Medicare and administered through many different private insurance companies. Some Medicare Advantage plans may provide certain of the above services as part of an enhanced benefit, but it is important that you check the plan details for covered services, especially if it is a service that you use on a regular basis.

42. Who can join a Medicare Advantage plan?

In order to join a Medicare Advantage plan, you must have Medicare Parts A and B and live in the plan service area at least six months of the year.

43. What benefits are offered in a Medicare Advantage plan?

All Medicare Advantage plans must cover all Medicare Parts A and B services, including emergency and urgently-needed care. In addition, Medicare Advantage plans generally cover most of the original Medicare cost-sharing such as coinsurance and deductibles and also may cover other services such as vision and wellness programs. Benefits vary from plan to plan so it is important to check with the plan administrator about coverage before selecting a plan.

44. What impact does employer/retiree coverage have on Medicare Advantage plans?

Employer/retiree coverage is based on rules specific to each employer. An employer may choose not to offer any retiree benefits. They also may choose to offer coverage through a specific health plan or payment toward health plan premiums. Employers’ rules regarding insurance coverage can vary. Joining a Medicare Advantage plan not sponsored by the employer may cause you to lose not only health insurance, but also other employer benefits. Once the employer coverage is dropped, you may be restricted from returning to the employee/retiree insurance coverage. Great care must always be taken when deciding on a Medicare plan.

45. If I drop Medicare Advantage, will I be able to get Medigap insurance?

The first time Medigap coverage is dropped to join a network Medicare Advantage plan, you have a one-time right to return to Medigap. After the first time, you do not have an automatic right to return to Medigap.

46. What types of Medicare Advantage plans are available?

Health Maintenance Organization Plan (HMO) − Joining an HMO means that, to ensure you pay the lowest price possible, you’ll need to see only those providers in your plan’s network unless you need emergency or urgent care. If you regularly see a provider not in your plan’s network, you’ll need to pay full price for those services on your own.
An HMO requires you to have a Primary Care Physician (PCP) who can perform general checkups and evaluations and refer you to other doctors. You may also need to get a prior authorization from the HMO plan, which means that you or your doctor will need to call the plan to get approval before obtaining treatment. If you do not get a referral from your PCP or prior authorization from the plan, you may need to pay full price at the time you’re treated.
Preferred Provider Organization Plan (PPO) − If you decide to become a member of a PPO, you can usually go to any doctor or provider in or out of the plan’s network, though your copayments will probably be higher if you see someone outside of the network. You do not have to get a referral from a PCP to see another doctor, but your plan may want you to get prior authorization for certain services.
Private Fee for Service Plan (PFFS) − If you join a PFFS plan, you will not use a provider network. Instead, you can see any healthcare provider in your plan’s coverage area as long as the provider is eligible to be paid by Medicare and is willing to accept the PFFS plan’s terms of payment.
It is important to know that a doctor or other healthcare provider may choose not to accept a PFFS plan at any time, even if the provider otherwise participates in Medicare. So, before seeking any non-emergency treatment under a PFFS plan, contact your doctors, hospitals and other healthcare providers to make sure they still agree to accept the PFFS plan.
Special Needs Plan (SNP) − A SNP is an HMO specifically developed for beneficiaries who are either institutionalized, eligible for both Medicare and Medicaid, or have certain diseases. Although some SNPs do allow everyone to enroll, many only accept individuals who meet their criteria. If a SNP does not allow you to enroll, you will be instructed to find a different plan that will cover you, such as an HMO, PPO or PFFS.
Medical Savings Account (MSA) − MSAs are typically high-deductible plans that also include a bank account to be used only for your healthcare expenses. If you decide to join an MSA, your plan will create an account for you and deposit a certain amount of money that it receives from Medicare. When you go to the doctor or get prescription drugs, you’ll use money from this account to pay for the expenses until you have reached your deductible. Once you reach your deductible, many plans pay up to 100% of your costs for the rest of the year. For every year you are a member, the MSA plan will make a new deposit into the account.

47. What are the special rules for HMO Medicare Advantage plans?

Primary Care:

Participants must choose a primary care physician (PCP)
Referrals and prior authorization requirements to deal with
Generally, participants must get a referral from the PCP to see other physicians
Generally, participants must get prior authorization from the plan to see other providers

Network:

Must see plan providers in the network except for emergency and urgently-needed care in the plan network
If you see a provider outside of the network, you will have to pay the full cost of the service
Some plans may offer a travel benefit, which allows for limited coverage out of the area/out of network
Some plans may offer a point-of-service (POS) option that allows members to use out-of-network providers for a higher cost

Part D:

Usually has a plan option that covers Part D prescription benefits (called Medicare Advantage prescription drug or MA-PD)
If you want drug coverage, it must be purchased through this plan and may not be a free standing Part

Other Benefits:

Vary according to plan

48. What special rules apply to Special Needs Plans (SNP)?

Primary Care

You must choose a primary care physician (PCP).
Referrals and prior authorization requirements to deal with
Generally, you must get a referral from the PCP to see other physicians.
Generally, you must get prior authorization from the plan to see other providers.

Network

You must see plan providers in the network except for emergency and urgently needed care in the plan network.

Part D

Must offer Part D prescription benefits
If you want drug coverage, it must be purchased through this plan and may not be a freestanding Part D plan.

Other Benefits

Other services may be available.

Enrollment Rules

Unlike other Medicare Advantage plans, you may join or leave at any time of the year.
You must meet plan specific criteria.

49. What are the rules related to Preferred Provider Organization (PPO) plans?

Primary Care

You do not need to choose a primary care physician (PCP).

Referrals and Prior Authorization

You do not need to get a referral from the PCP to see other physicians.
You may need to get a prior authorization from the plan to see other providers.

Network

You may see providers who are in or out of the network.
If you see a provider outside of the network, you will have to pay a higher cost.

Part D

Usually has a plan option that covers Part D prescription benefits (Medicare Advantage-Prescription Drug or MA-PD)
If you want drug coverage, it must be purchased through this plan and may not be a freestanding Part D plan.

Other Benefits

Other services may be available.

50. What are the benefits of a Private Fee-for-Service (PFFS) plan?

Primary Care

You do not need to choose a primary care physician (PCP).

Referrals and Prior Authorization

You do not need to get a referral from the PCP to see other physicians.
You do not need to get a prior authorization from the plan to see other providers.

Network

Non-Network PFFS:

You can see any Medicare approved provider if the provider agrees to the plan’s terms and conditions – called “deemed provider.”
Providers have a choice to accept these terms and conditions.

Limited Network PFFS

If certain providers are used, there is lower member cost sharing.
If non-network providers are used, non-network PFFS guidelines apply.

Part D

May cover Part D prescription benefits
If the plan offers prescription drug coverage, it must be purchased through this plan and may not be a free standing Part D.
If Part D is not a plan option (integrated Part D coverage), then you have the opportunity to purchase a freestanding Part D plan.

Other Benefits

Other services may be available.

51. What are the benefits of a Medicare Medical Savings Account (MSA)?

Cost

High deductible plan with significant cost sharing until deductible is met

Benefits

Purchase free-standing prescription plan
Purchase high deductible plan with additional benefits

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Other Medicare Plans

52. What are “Other Medicare Plans?”

The other Medicare plans available include Medicare cost plans, demonstrations/pilot programs and programs of all-inclusive care for the elderly. These plans provide Part A and Part B coverage and some also provide Part D coverage.

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Medicare Part A

What does Medicare Part A cover?

Medicare Part A is hospital insurance and helps cover inpatient care in hospitals. Part A also helps cover skilled nursing facilities, hospice and home healthcare if certain conditions are met.

53. When can I sign up for Part A?

If you get benefits from Social Security or the Railroad Retirement Board, you will automatically get Part A on the first day of the month you turn age 65. If you are under age 65 and disabled, you will automatically get Part A after you get disability benefits from Social Security or Railroad Retirement Benefits for 24 months.

54. What is the fee for Part A benefits?

If you or your spouse paid Medicare taxes while working, you are eligible for premium-free Part A benefits.

55. What is a benefit period?

A benefit period is defined as 60 consecutive days. The first day of the benefit period begins on the day you enter the hospital or skilled nursing facility (SNF) and ends when no care has been received from an inpatient hospital or SNF for 60 consecutive days. The inpatient deductible is paid for each benefit period; there is no limit to the number of benefit periods.

56. What if I am not eligible for premium-free Part A benefits?

If you are not eligible for premium-free Part A benefits, you can buy Part A benefits during the following times:

Initial Enrollment Period (IEP): The seven-month period that begins three months before your 65^th birthday and ends three months after your 65^th birthday
General Enrollment Period (GEP): From January 1 - March 31 each year
Special Enrollment Period (SEP): If you have group health coverage through your or your spouse’s employer or union

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Medicare Part B

What does Medicare Part B cover?

57. When can I sign up for Part B?

If you get benefits from Social Security or the Railroad Retirement Board, you will automatically get Part B on the first day of the month you turn age 65. If you are under age 65 and disabled, you will automatically get Part B after you get disability benefits from Social Security or Railroad Retirement Benefits for 24 months.

If you didn’t sign up for Part B when you first became eligible, you may be able to sign up during one of these times:

General Enrollment Period: From January 1 through March 31 each year
Special Enrollment Period: If you waited to sign up for Part B because you or your spouse are working and have group health coverage based on that work or if you are disabled and you or a family member are working and have group health plan coverage based on that work

58. Is there a penalty for not signing up for Part B as soon as I become eligible?

You may have to pay a late-enrollment penalty for not signing up for Part B benefits as soon as you became eligible. The premium may go up 10 percent for each full 12-month period that you could have had Part B but didn’t sign up for it.

59. What is the fee for Part B benefits?

The fee for Part B benefits varies according to income. The table below shows the 2010 Part B premiums.

If Your Annual Income is…		You Pay
File Individual Tax Return	File Joint Tax Return
$85,000 or below	$170,000 or below	$110.50*
$85,001 - $107,000	$170,001 - $214,000	$154.70*
$107,001 - $160,000	$214,001 - $320,000	$221.00*
$160,001 - $214,000	$320,001 - $428,000	$287.30*
Above $214,000	Above $428,000	$353.60*

*If you already have Medicare and your premiums are deducted from your Social Security checks, your premiums may be the same as they were in 2009. If you pay a late-enrollment penalty, this amount is higher.

60. What is the Special Enrollment Period for International Volunteers?

If you waited to enroll in Part B because you had health insurance while volunteering in a foreign country, you usually do not have to pay a late-enrollment penalty to sign up for Part B during a special enrollment period.

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Medicare Part C

What does Medicare Part C cover?

Medicare Part C (also called Medicare Advantage) is another way to get Medicare benefits. Medicare Part C combines Part A, Part B and, sometimes, Part D (prescription drug coverage).

61. What is Medicare Part C?

Medicare Part C is medical and hospital insurance. It includes everything that Medicare Parts A and B includes and often also provides prescription drug coverage under Part D and other benefits such as vision and dental coverage. Medicare Part C is also known as Medicare Advantage and is offered by private companies.

62. Who is eligible for Medicare Advantage?

In general, most people who are eligible for Medicare Part A or Medicare Part B can enroll in a Medicare Advantage plan. However, people with certain disabilities or End Stage Renal Disease (ESRD) may not be able to participate in Medicare Advantage and may need to use traditional Medicare instead.

63. If I join a Medicare Advantage plan, do I still need to pay a Part B premium?

Yes, you will still need to pay your Part B premium to Medicare. Most Medicare Advantage plans also charge a fee over and above what Medicare Part B charges because they provide extra coverage, such as prescription drug coverage, dental and vision.

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Medicare Part D

What does Medicare Part D cover?

Medicare Part D helps cover prescription drugs.

64. What is Medicare Part D?

Medicare Part D is prescription drug coverage.

65. Are all drugs covered under Medicare Part D?

No. Although most prescription drugs are covered under Medicare Part D, there are certain medications, such as those administered in a doctor’s office, that are covered under Medicare Part B. If you’re interested in Part D coverage, you should contact the plan administrator to see if the drugs you take are covered.

66. Who is eligible for Medicare Part D?

If you are entitled to Medicare Part A or are enrolled in Part B, you can get prescription drug coverage under Medicare Part D.

67. How do I purchase Part D benefits?

Part D benefits can be purchased in two different ways. You have a choice of private drug plans that are either integrated with medical coverage (Medicare Advantage-Prescription Drug or MA-PD) or offered as a stand-alone prescription drug plan (PDP). Which one you are eligible to purchase can depend on how you are receiving your medical Medicare benefits, Part A and Part B.

A stand-alone Medicare prescription drug plan (PDP) can be purchased to add coverage to original Medicare, some Medicare private fee-for-service (PFFS) plans that do not offer integrated Medicare prescription drug coverage, some Medicare cost plans and Medicare medical savings account plans.

Most Medicare Advantage Plans (like an HMO or PPO) and other Medicare health plans include integrated coverage for prescription drugs. You then get all your healthcare and prescription drug coverage through one plan.

68. What is the donut hole or coverage gap?

Some Medicare drug plans have a coverage gap often called a “donut hole.” This means that after you have spent a certain amount of money for covered drugs, you have to pay all costs for drugs while in the coverage gap. The costs until the end of the initial coverage level are based on the full cost of the drugs. This does not include the premium. You must continue to pay the premium during the coverage gap. Once the initial benefits are exhausted, you pay 100 percent of the next $3,610 (for 2010) in drug costs until you and your plan's combined costs reach $6,440 (for 2010) in out-of-pocket costs. This amount is referred to as the coverage gap. Each state offers at least one plan with some type of coverage during the gap.

69. What do I need to know about joining a Medicare prescription drug plan?

Eligibility

To join a drug plan, you must be entitled to Medicare Part A or have Medicare Part B and live in the service area of the plan. Drug plans offer their benefit options in specific service areas. Beneficiaries are eligible to purchase only plans offered in the area where they reside.

Enrollment Periods

You are eligible to enroll in a Medicare drug plan only during certain time periods depending on your situation:

Initial Enrollment Period (IEP) takes place when you first become eligible for Medicare. You can join starting three months before the month you turn age 65 through three months after the month of your 65^th birthday. If you join during the three months before turning age 65, coverage begins the first day of the month of your 65^th birthday. If you join the month of your 65^th birthday or during the three months after, coverage is effective the first day of the month after the month joined. Disabled beneficiaries can generally join three months before and three months after the 25^th month of disability benefits.
Annual Coordinated Election Period (AEP) runs each year from November 15 to December 31. During this period, you may change prescription drug plans, add a drug benefit or switch plans. If you join during this time, the coverage is effective January 1 of the following year.
Special Enrollment Periods (SEPs) are periods outside of the enrollment periods listed above where members of Part D plans can enroll or disenroll from the plan. SEPs can only be used in certain circumstances and members need to work with their plan or Medicare to get one. For example, if during the year a member feels that their plan has mislead them about their coverage or has provided them with sub-par service, they may be able to request a SEP to disenroll from their current plan and enroll in a new one. Or, if a member moves out of their plan’s service area, they can ask to be disenrolled from the plan and enroll in a new one that is in their service area. The Centers for Medicare & Medicaid Services (CMS) and the plan have the authority to create SEPs in exceptional circumstances.

70. What is the late enrollment penalty for Part D?

If you do not join a drug plan when first eligible, you may have to pay a penalty for enrolling later. This means that you will pay a higher premium for as long as you have Medicare drug coverage.

In most cases, you will pay a penalty if you:

do not join when first eligible for Medicare, and
do not have creditable prescription drug coverage, or other prescription drug coverage that is, on average, at least as good as standard Medicare prescription drug coverage

To estimate the penalty, take one percent of the national average benchmark premium for the coverage year. The national average benchmark premium for 2010 is $28.

Multiply it by the number of full months that you were eligible to join a Medicare drug plan and weren’t enrolled in one. The answer is the penalty amount. This penalty amount is added to the monthly premium of whichever Medicare drug plan you join for as long as you are in the plan. The penalty is recalculated each year there is a change in the national average premium. If you have to pay a penalty, the Medicare drug plan you joined will tell you the amount that must be paid.

If you are told that you need to pay a penalty but disagree with the plan, you can request that the plan reconsider the late enrollment penalty. To do so, you should contact your plan and they will provide you with the appropriate forms and instructions.

71. What drugs are covered by Medicare?

Medicare Parts A and B-Covered Drugs

Traditional Medicare (Parts A/B) does not cover most outpatient prescription drugs. Medicare Part A bundled payments made to hospitals and skilled nursing facilities generally cover all drugs during an inpatient stay. Medicare Part B makes payments to physicians for drugs or biologicals that are not usually self-administered. Part D does not generally cover drugs that fall under Part A/B.

Part D-Covered Drugs

A covered Part D drug includes prescription drugs, biological products, insulin and certain vaccines. The definition also includes “medical supplies associated with the injection of insulin (as defined in regulations of the secretary).” These medical supplies include syringes, needles, alcohol swabs and gauze.

Over-the-counter products (OTCs)

The definition of the Part D drug coverage does not include OTCs. Therefore, Part D plans cannot include OTCs in their drug benefit or supplemental coverage.

Not covered

By law, there are certain types of drugs that Medicare must exclude from Part D. These include barbiturates; benzodiazepines; drugs used for anorexia, weight loss or weight gain; fertility drugs; drugs used for cosmetic purposes or hair growth; cough and cold medicines; prescription vitamins and minerals and over-the-counter drugs.

72. What are the drug coverage regulations for Part D plans?

Medicare drug plans must cover prescription drugs in all prescribed categories and classes, but Medicare drug plans do not have to cover every drug in a given class or category.

73. Can a Part D plan stop paying for my medication?

Yes, but there are specific regulations the plan must follow. Prior to removing a covered Part D drug from its Part D plan’s formulary, or making any change in the preferred or tiered cost-sharing status of a covered Part D drug, a Part D plan must either:

Provide direct written notice to affected enrollees at least 60 days prior to the date the change becomes affective; or
At the time an affected enrollee requests a refill of the Part D drug, provide such enrollees with a 60-day supply of the Part D drug under the same terms as previously allowed and written notice of the formulary change.

If the Federal Drug Administration (FDA) has decided that a drug is unsafe, the plan must remove the drug from its formulary immediately and notify members as soon as possible, but within no less than three days of the drug’s removal from the formulary.

74. What is the transition policy regarding Part D coverage?

Because not all plans cover the same Part D drugs or may have different utilization management requirements, a Part D plan must provide new members with an appropriate transition period of at least 90 days after the effective date of coverage. This means that if a new member is taking a medication that is covered under Medicare Part D, but is moving to a plan that either doesn’t include that drug on their formulary or includes it but has other utilization management requirements, the plan must let the member know that their drug is not covered and cover a temporary supply of the drug while the member either requests a prior authorization or obtains a new prescription for a medication that is on the plan’s formulary.

New enrollees can take advantage of a plan’s transition policy in the following situations:

1) The enrollee is newly eligible for Medicare coverage and has enrolled into a Part D plan;

2) The enrollee is switching from one Medicare plan to another; and

3) The enrollee lives in a long-term care (LTC) facility.

75. What is utilization management?

All Part D plans are required to have utilization management programs in place. These programs work to ensure that the prescription drugs are taken safely and effectively while helping members keep costs down.

Prior Authorization

Prior authorization means that before a plan will cover certain prescriptions, the participant’s doctor must first contact the plan and show that there is a medical reason why you must use that particular drug to treat the condition.

Step Therapy

Step therapy helps members manage their prescription drug costs by requiring them to try a generic equivalent of a brand-name drug (if available) before getting a similar, more expensive brand-name drug covered. The physician can contact the drug plan to request an exception.

Quantity Limits

For safety and cost reasons, plans may limit the quantity of drugs that they cover over a certain period of time. For example, you may be prescribed a drug with the instruction to take one tablet per day. In this instance, a plan may cover only a 30-day supply at a time (up to 90-day supply if filled through a plan’s mail-order program).

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Special Circumstances

76. Is there ever a situation where I’d be eligible for Medicare Parts A and B, but not for Medicare Advantage? Yes. If you have End Stage Renal Disease (ESRD), which is kidney failure requiring dialysis or a transplant, you will need to keep Medicare Parts A and B and, in general, cannot move into a Medicare Advantage plan.

77. So, if I have ESRD, there’s no way I can be a part of a Medicare Advantage plan?
Although people who are diagnosed with ESRD are typically not permitted to join a Medicare Advantage plan, there are some situations in which they may:

If you were in a Medicare Advantage plan when you were diagnosed with ESRD, you do not have to go back to original Medicare, and your plan cannot tell you to leave because of your diagnosis. Also, if you would prefer to join another plan offered by the same company you’re with now, you can do so.
If you have healthcare coverage with your employer or union through a MA plan carrier, you may be able to switch from your employer’s or union’s coverage to a plan offered by that MA carrier.
If you have had a successful kidney transplant, you may be able to join a MA plan of your choice.
If you have been diagnosed with ESRD but are already in a MA plan and that plan decides to discontinue coverage or leave your service area, you have a one-time right to join another MA plan. You don’t have to join another MA plan immediately, though – if you decide instead to go to Original Medicare, then decide that you would prefer to be in a MA plan instead, you can still join a MA plan later as long as that plan is enrolling new members.
If a Medicare Special Needs Plan (SNP) for people with ESRD is accepting new members in your area, you can join that plan to get MA coverage.

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Employer Coverage and Medicare

78. What is COBRA coverage?

If you had coverage through an employer and left for some reason, including disability, you may be using coverage offered to you through COBRA. Most employers are required to offer their former employees COBRA if they choose to or need to leave because they quit or become unable to work due to disability. COBRA allows you to keep the coverage you had with your employer for a limited time, usually 18 months, until you find new healthcare coverage. Having COBRA ensures that you don’t have a lapse in coverage that might result in your paying a penalty when you do get healthcare coverage.

79. If I’m using coverage offered by my employer through COBRA now, should I join a Medicare plan?

If you are eligible for Medicare due to a disability but are using COBRA, you should seriously consider enrolling in Medicare and getting a Medicare Advantage plan as soon as you are entitled to do so. COBRA is often much more costly than Medicare, even though a Medicare Advantage plan can provide you with the same benefits. Also, if you do not enroll in Medicare Advantage when you are eligible to do so, you may need to pay a penalty later or you might have more limited options when your COBRA coverage ends.

80. When can I leave my COBRA plan and join a Medicare Advantage plan?

If you have COBRA coverage and want to enroll in a Medicare Advantage plan instead, you should do so during the time your former employer typically allows you to change your coverage. This is often referred to as “open season.”

81. What if my employer’s open season does not correspond with Medicare Advantage’s annual election period?

Medicare Advantage plans are required by CMS to grant you a special enrollment period if your COBRA coverage ends or if you choose to leave your employer’s COBRA coverage to enroll in a Medicare Advantage plan. If your COBRA coverage ends or you decide to leave your COBRA coverage, you have two months after that coverage ends to join a Medicare Advantage plan.

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Cost Sharing

82. What is cost sharing?
The term cost sharing refers to the costs participants will pay in addition to what Medicare pays for medical services.

83. What is co-insurance?

Co-insurance is an amount you may be required to pay for services after you pay any plan deductible. Co-insurance is usually a percentage of the total cost of the service. In the original Medicare plan, this is a percentage (like 20 percent) of the Medicare-approved amount. You have to pay this amount after you pay the Part A and/or Part B deductible.

84. What is a copayment?

A copayment is a flat fee you pay in some Medicare health and prescription drug plans for each medical service, like a doctor’s visit, or prescription. Copayments may be different for services or prescriptions that are more expensive. For example, you may pay $10 to see your regular doctor, while your plan may require you to pay a $20 copayment to see a specialist such as a cardiologist or neurologist.

85. What is a deductible?

The deductible is the amount you must pay for healthcare or prescriptions before the original Medicare plan, your prescription drug plan or other insurance begins to pay. For example, in the original Medicare plan, you pay a new deductible for each benefit period for Part A and each year for Part B. These amounts can change every year.

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Creditable Coverage under Medicare

86. I’ve heard that I may need to have creditable coverage to get a Medicare plan without paying a penalty. What does that mean?

You may have heard the term “creditable coverage” used with both Medigap and Medicare. Creditable coverage under Medigap is slightly different than creditable coverage under Medicare. If you have creditable coverage under Medigap, that means that you have had coverage on a pre-existing condition for more than six months. If you’re looking for a different Medigap plan to supplement your original Medicare, as long as you find another Medigap plan within 63 days, you do not have to wait for that Medigap plan to cover your pre-existing condition.

Under Medicare, if you have creditable coverage, that means that the coverage you have is as good as or better than that offered under Medicare Part D. All Medicare Advantage plans that offer Part D prescription drug coverage are required by law to provide creditable coverage. If you are not in a Medicare Advantage plan, you may not have creditable coverage and may want to move into a Medicare Advantage plan.

Having creditable coverage can be important, especially if you’re already in a Medicare Advantage plan or are moving from employer coverage to Medicare coverage. If you go for longer than 63 days without creditable coverage and choose to enroll in a Medicare Advantage plan, you may be required to pay a 1% penalty on your premiums for every month you didn’t have creditable coverage. This penalty generally is applicable for as long as you use Medicare Advantage coverage.

87. How do I know if I have creditable coverage?

Medicare plans are required to send their members a letter every year confirming that their coverage is creditable. If you’re in a plan offered by an employer, your employer may also send you a letter. Most employer coverage is creditable, so if you’re eligible for Medicare and in an employer plan, your coverage is likely creditable.

88. What if I’m not enrolled in Medicare Advantage or an employer plan?

If you’re not enrolled in a Medicare or employer plan, you should check with your plan administrator to find out if your coverage is creditable. Generally plans that provide coverage to people with Medicare are required to let them know if their coverage is creditable or not.

89. I’m new to Medicare and haven’t had insurance. Does that mean I have to pay a penalty if I sign up for a Medicare Advantage plan?

No. If you sign up for a Medicare Advantage plan or original Medicare with Parts A and B when you are first eligible, the coverage you have will be considered creditable and you should not have to pay a penalty to join a Medicare Advantage plan.

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Extra Help - Low Income Subsidy

90. What is Extra Help or Low Income Subsidy?
Extra Help or Low Income Subsidy (LIS) refers to the program offered through Medicare that assists qualified beneficiaries with Part D premiums and overall drug costs. You must meet certain criteria to qualify for LIS. The cost sharing amount for LIS depends on income and resources, but most people who qualify will pay no premiums, no deductibles and no more than $6.30 in 2010 for each prescription.

91. How does a Medicare beneficiary automatically qualify for LIS?
Certain Medicare beneficiaries will automatically qualify for the extra help (LIS) and don’t need to apply in the following circumstances:

If you have full coverage from a state Medicaid program. Medicaid no longer pays for most prescription drugs for people with Medicare.
If you get help from Medicaid paying Medicare premiums (belong to a Medicare Savings Program).
If you received Supplemental Security Income (SSI) benefits.

92. How does Medicare notify beneficiaries that they qualify for LIS?

CMS mails letters to beneficiaries to notify them of their LIS qualification.

Yellow Letter

When you have Medicare and Medicaid, CMS mails a letter on yellow paper to you as notification that Medicare is covering your prescriptions instead of Medicaid. The letter provides the name of the plan Medicare is enrolling you in and the date your coverage begins.

Green Letter

Beneficiaries who get help from their state to pay Medicare premiums (Medicare Savings Program), get Supplemental Security Income (SSI) benefits, or applied and qualified for the extra help, receive a letter from CMS on green paper. The letter provides the name of the plan Medicare has chosen for you and the date coverage begins.

93. What if the drug plan Medicare signs me up for doesn’t meet my needs?

You can switch plans at least once before the end of the calendar year. Generally, your next chance to switch is from November 15 - December 31 each year.

94. What are the eligibility qualifications for LIS?

In determining your eligibility for LIS, both income and resources are counted. If you are married and living with a spouse, both of your incomes and resources are counted - even if only one is applying for extra help. If you are married, but not living with the spouse when applying, only your income and resources are counted.

95. What income counts for LIS?

Income is any cash, goods or services that can be used to meet needs for food or shelter. Examples include, but aren’t limited to the following:

Income counted:

Wages
Earnings from self-employment
Social Security benefits
Railroad Retirement benefits
Veterans benefits
Pensions
Annuities
Alimony
Rental income
Workers’ compensation

Income not counted:

Income tax refunds
Assistance based on need, funded by a state or local government
Foster care payments
The value of expenses that a blind or disabled person needs to work

96. What resources count toward LIS?
Resources include cash and other things that normally can be converted to cash within 20 workdays. Examples include, but aren’t limited to the following:

Resources counted:

Accounts at financial institutions (like savings; checking; money market; time deposits or certificates of deposit; and retirement, such as individual retirement accounts (IRA) or 401(k) accounts)
Stocks
Bonds
The value of property that isn’t connected to the home

Resources not counted:

Life insurance policies owned with a combined face value of $1,500 or less ($3,000 or less for applicant and spouse)
The home you live in and the land it’s on
Resources such as family heirlooms and wedding/engagement rings
Property of a trade or business that is essential to means of self-support
Funds received and saved to pay for medical and/or social services

97. Below is a chart illustrating the drug plans costs for individuals who automatically qualify for LIS.

*Medicare Drug Plan Costs if You Automatically Qualify* For Extra Help**
If you have Medicare and…	Monthly premium*	Annual deductible	Cost per prescription at the pharmacy (until $4,550)**	Cost per prescription at the pharmacy (after $4,550**)
...full Medicaid coverage and for each full month living in an institution like a nursing home	$0	$0	$0	$0
…full Medicaid coverage and have an annual income at or below: $10,830-single; $14,570-married	$0	$0	No more than $1.10 for generic and certain preferred drugs; no more than $3.30 for brand-name drugs	$0
…full Medicaid coverage and have an annual income below: $14,621-single; $19,670-married; assets*** below $8,100 single and $12,910 married	$0	$0	No more than $2.50 for generic and certain preferred drugs; no more than $6.30 for brand-name drugs	$0
…get help from Medicaid paying Medicare premiums	$0	$0	No more than $2.50 for generic and certain preferred drugs; no more than $6.30 for brand-name drugs	$0
…get Supplemental Security Income (SSI) but not Medicaid	$0	$0	No more than $2.50 for generic and certain preferred drugs; no more than $6.30 for brand-name drugs	$0

Notes:

*There are plans you can join and pay no premium. There are other plans where you will have to pay part of the premium even when qualifying for extra help. Tell the plan if you qualify for extra help and ask how much you will pay for the monthly premium.

** The cost per prescription generally decreases once the amount you pay and Medicare pays as the extra help reach $4,550 per year.

***Assets include savings and investments, but do not include things like your house or car, or a life insurance policy or burial fund up to $1,500 per person.

The income levels are for 2008 and resources listed are for 2009 and can increase each year. If living in Alaska or Hawaii, or if you or your spouse pays at least half of the living expenses of dependent family members who live with you, or you work, income limits are higher. Cost sharing amounts listed are for 2009 and can change each year.

98. Below is a chart illustrating the drug plans costs for individuals who apply and qualify for LIS.

*Medicare Drug Plan Costs If You Apply and Qualify* For Extra Help**
If you have Medicare and…	Monthly premium*	Yearly deductible	Cost per prescription at the pharmacy (until $4,550**)	Cost per prescription at the pharmacy (after $4,550**)
…an annual income below: $14,621-single $19,670-married and with assets*** of no more than: $12,510-single $25,010-married	$0	$63	15% co-insurance	No more than $2.50 for generic and certain preferred drugs; no more than $6.30 for brand-name drugs
…an annual income between: $14,621-$16,245-single; $19,670-$21,855-married and with assets below: $12,510-single $25,010-married	Discounted Premium (sliding scale based on income)	$63	15% co-insurance	No more than $2.50 for generic and certain preferred drugs; no more than $6.30 for brand-name drugs

Notes:

** The cost per prescription generally decreases once the amount you pay and Medicare pays as the extra help reach $4,550 per year.

***Assets include savings and investments, but do not include things like your house or car, or a life insurance policy or burial fund up to $1,500 per person.

The income levels are for 2008 and resources listed are for 2009 and can increase each year. If living in Alaska or Hawaii, or if you or spouse pays at least half of the living expenses of dependent family members who live with you, or you works, income limits are higher. Cost sharing amounts listed are for 2009 and can change each year.

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