By Corrie Borde
The health care season is upon us, particularly as it relates to Medicare and the Affordable Care Act.
Medicare “Original Medicare” is a federal health insurance program for people 65 or older, under 65 with certain disabilities and those who suffer from permanent kidney failure. Generally speaking, the insurance is divided into Part A (hospital insurance), Part B (medical insurance) and Part D (prescription drug coverage). Although they do not cover all costs, they can significantly reduce your financial burden.
MY ADVICE: If you think you may need a little help with coverage decisions, seek professional assistance now so you do not miss those important deadlines.
Medicare Part A hospital insurance covers inpatient hospital care, skilled nursing facility, hospice, lab tests, surgery and home health care.
Medicare Part B covers medically necessary services and preventive services such as clinical research, ambulance services, durable medical equipment (DME), mental health, inpatient, outpatient, getting a second opinion before surgery and limited outpatient prescription drugs.
Medicare Part D’s prescription drug coverage effectively works to offset the monthly expenses of medications.
Over the past several years these descriptions have remained the same, however, there are important related changes on the horizon.
Most notably, starting Jan.1/2020, Medicare Supplement plans, typically referred to as “Medigap,” will no longer be available for plans C and F, which cover the Part B deductible. Recipients aging into medicare prior to Jan.1/2020 may be able to sign up for Plans C and F after Jan.1/2020. Recipients will be subject to medical underwriting unless they are within their initial enrollment period or a special enrollment period. On the other hand, these plans would not be available to recipients aging into Medicare on Jan.1/2020 or thereafter.
With the expiration of these two Medigap Plans, things can become complex for uneducated consumers. Yet, there are ways to ensure future coverage.
The Medicare Supplement Plan F covers 100 percent of Medicare parts A and B copays, deductibles, coinsurance and excess charges (balance billing), and allows for some foreign travel emergency coverage. Currently, with the Medigap Plan F, recipients already on Medicare who medically qualify or who are in a special enrollment period (SEP), and recipients who are aging into Medicare (turning 65) prior to Jan.1/2020, can be grandfathered in with a guaranteed renewable for life and portable policy administered by an appointed insurance carrier.
Medigap plans work directly with Medicare parts A and B; therefore, there is no such thing as in-network or out-of-network. Medigap plans are accepted as supplement where Medicare Parts A and B are accepted.
Another critical Medicare consideration involves Medicare Part D and what is called the “donut hole.” Important note: Understand the donut hole and get introduced to resources that can help reduce and/or eliminate the out-of-pocket costs related to being in the donut hole. Under certain circumstances, this impacts the percentage of total prescription costs a person must pay. If you fall into the donut hole, you will be responsible for 25 to 37 percent of the full retail cost of combined drugs until the total you have spent for your prescriptions reaches a certain annual out-of-pocket spending limit, which is currently set at $5,100.
Stages of Medicare Part D Coverage
Stage 1 — initial coverage stage. The patient is responsible for 25 percent (post $415 deductible where applicable) up to the full retail combined drug cost, reaching $3,820 in 2019.
Stage 2 — coverage gap “donut hole”. After total spending on drugs — by the beneficiary, by certain subsidy programs and by the plan — reaches $3,820, the beneficiary pays for 37 percent of generic drug costs and 25 percent of brand-name drug undiscounted costs (drug manufacturers provide a 70 percent discount on brand-name drugs).
Stage 3 — catastrophic coverage. Once beneficiary expenditures (including drug manufacturer discounts) reach a total of $5,100, the beneficiary is through the coverage gap and reaches catastrophic coverage. On any future prescriptions, the beneficiary pays either a copay of $3.40 for generic drugs or $8.50 for brand-name drugs, or a coinsurance of 5 percent, whichever is greater.
Affordable Care Act
Regarding the Affordable Care Act health insurance, although there has been much federal debate about its merits, it continues as a law and, thus, is a viable option. This coverage is designed for people who are not offered health benefits from their employers and are not enrolled in some other form of coverage, such as Medicare or Medicaid. Consequently, these options may be worth consideration.
In my experience, many people who were previously unaware do qualify for subsidies. Of course, no one has a crystal ball, but some preparation and professional help can pay off.
Open Enrollment Periods:
Medicare: Oct. 15 – Dec. 7
Affordable Care Act: Nov. 1 – Dec. 15
BEFORE SEEKING SUCH HELP, HERE ARE A FEW THINGS TO ASK YOURSELF:
1.What are my health concerns, both individually and for the family?
2.What is my budget?
3.What is my premium preference — high monthly premium with low deductible or vice versa?
4.Does my primary physician and specialist accept the plan?
Explore your options for prescription drug co-pays under Medicare or the Affordable Care Act, as there are many resources that have the ability to significantly reduce or eliminate your financial outlay. At the very least, sit down with a professional independent agent who works with multiple carriers and can take an unbiased approach in educating you, fact finding and advising you on coverage options that make sense for your needs.
Corrie Borde is president of Borde & Associates, P.A., in Melbourne, a professional association and insurance agency whose associates hold active-in- good standing Florida 2-15 Health & Life (including annuities and variable contracts) agent licensure issued by the Florida Department of Financial Services.