Social Security/Medicare. Everything You Need to Know. But Didn t Know to Ask. For the. Colorado Bar Association

Transcription

1 Social Security/Medicare Everything You Need to Know But Didn t Know to Ask For the Colorado Bar Association C. Crispin Sargent CS AdvoCare, Inc E. Hampden Ave., Suite 102 Denver, CO ccrispin@earthlink.net

2 1) Agenda a) Social Security b) Medicare c) Medicare Part D Social Security/Medicare 2) Social Security a) Social Security Formed in 1935 b) Pay As You Go System c) Entitlement Program d) When started 40 workers supported each recipient. Now 3 workers support each recipient. 3) Social Security Today a) Benefits now include b) Retirement c) Disability d) Survivor e) Medical - Medicare added in ) Social Security Today a) Those not covered by Social Security: b) Federal employees hired before 1984 c) About 20% of State and Local government employees and teachers d) Railroad employees 5) Social Security Benefits a) To be eligible must have 40 quarters b) Earn 4 quarters per year - in 2006 c) $970 in earnings is One Quarter d) $3,880 in earnings is Four Quarters e) Must apply for Benefits f) Call g) In-office appointment h) Telephone appointment i) Apply over the Internet at 4/17/2006 CS AdvoCare, Inc Page 2 of 13

3 Social Security/Medicare 6) Social Security a) Social Security b) Retire before age 65 c) Retire at age 65 d) Retire after age 65 7) Social Security Benefits a) Reduced Entitlement i) Early retirement age ii) Benefits permanently decrease by 5/9% for each month before full retirement iii) Income Penalty iv) Allowed income before penalty in 2006 $12,480 v) Benefits reduced $1 for every $2 earned over allowed income b) Full Entitlement i) Beginning in 2006 ii) months iii) Age 65 to Full retirement allowed income is $33,240 iv) Benefits reduced $1 for every $3 over allowed income c) Delayed Entitlement i) Credit 5.5% for each year benefits are deferred 8) COBRA Eligibility a) Termination/Retirement i) 18 months b) Second Qualifier i) Eligibility for Medicare ii) Death of Employee iii) Divorce iv) Additional 18 months 9) When Do You Want/Need To Take COBRA a) Retire before age 65 b) Spouse is < 65 i) Caution: Special Enrollment Period is only available for retiree that is actively at work at time of retirement. 4/17/2006 CS AdvoCare, Inc Page 3 of 13

4 10) Medicare a) Medicare Eligibility i) Initial Enrollment Period (IEP) (1) 1st of the month that you turn 65 ii) Special Enrollment Period (SEP) (1) 1 st of the month following retirement iii) General Enrollment Period (GEP) Social Security/Medicare iv) January through March (1) Effective Date July 1 st (2) Premium Penalty of 10% for each year you should have been enrolled in Medicare. 11) Medicare Background a) Medicare Parts A and B became law in 1965 b) Hospital Coverage i) Pay no premium for coverage ii) Pay $ per month if not covered under SSA. c) Medical Coverage i) Current premium $88.50 per month ii) Provides no coverage for outpatient prescriptions 12) 2006 Medicare Plan s and 13) Medicare Background a) Medicare Part C Medicare + Choice Now called Medicare Advantage i) Introduced under Clinton s Balanced Budget Act in 1997 b) Managed Care c) Types of Plans i) Health Maintenance Organization (HMO) ii) Provider Sponsored Organization (PSO) iii) Preferred Provider Organization (PPO) iv) Health Maintenance Organization with a Point of Service Option (POS) 14) Medicare Background a) Medicare Part D Medicare Prescription Drug Plan i) Introduced in 2003 under the Medicare Prescription Drug, Improvement and Modernization Act b) Plan has two parts i) A two year voluntary prescription drug discount program ( ) and ii) Second, a standard drug benefit to begin in /17/2006 CS AdvoCare, Inc Page 4 of 13

5 Social Security/Medicare 15) Medicare Drug Insurance Program Medicare Part D a) Begins January 1, 2006 b) Enrollment November 15, 2005 to May 15, 2006 c) Penalty for late enrollment d) 1% per month unless creditable coverage thru employer plan e) Premiums will average $28 per month. 16) Who is Affected? a) In the United States i) 41 M Medicare beneficiaries ii) 25 M Enrolled including iii) 5 M Voluntary enrollees b) In Colorado i) 476,000 beneficiaries ii) 365,000 Enrolled including iii) 49,000 Voluntary enrollees 17) Low Income Subsidy Qualifications a) Level One i) Full Medicaid (QMB) income less than $9,800 (single) or $13,200 (couple) b) Level Two i) Medicaid (income higher than level one), SSI or State pays Medicare premiums (SLMB) ii) Income $11,760 (single) or $15,840 (couple) c) Level Three i) Income no higher than $13,230 (single) or $17,820 (couple) ii) Assets $6,000/$9,000 d) Level Four i) Income no higher than $14,700 (single) or $19,200 (couple) ii) Assets $11,500/$23,000 18) Do You Qualify? Who is Eligible 19) Do You Qualify? What You Get 20) Things To Think About a) You do not need a PDP i) IF you have prescription coverage through a retiree plan, PERA, or State or Federal retiree plans. ii) IF you have VA or TriCare prescription coverage. 4/17/2006 CS AdvoCare, Inc Page 5 of 13

6 Social Security/Medicare 21) Things To Think About a) You do not need a PDP i) IF you have coverage under an existing Medicare Advantage Plan (Kaiser, Secure Horizons, Rocky Mountain HMO.) 22) Things To Think About a) IF you have prescription coverage through a Medicare supplement (plans H, I, or J), you may want to consider a PDP. i) You will need to either decrease your Medicare supplement to plans A-G, ii) Or carve-out the prescription benefit from your current plan. Premiums will be reduced. b) IF you do not currently have prescription coverage with your Medicare supplement, you may want to sign up for a PDP. 23) Original Medicare Beneficiaries Will Have a) Medicare b) Medicare c) Medicare Supplement i) Plans A J and new K & L plans d) Prescription Drug Plan (PDP) i) Stand alone ii) There will be about 18 companies approved to provide coverage 24) Medicare Supplements 25) New Medicare Supplements 26) Medicare Advantage Beneficiaries Will Have a) Kaiser b) Secure Horizons c) Rocky Mountain HMO d) There will be new Medicare Advantage Plans e) Colorado Access f) Denver Health Medical Plan g) Fidelis Securecare h) Humana i) United Healthcare 27) Medicare Basic Prescription Drug Benefit 4/17/2006 CS AdvoCare, Inc Page 6 of 13

7 28) Pit Falls a) Formulary b) Pre-Authorization Requirement c) Quantity Limits d) Step Therapy Social Security/Medicare 29) Why Bother a) Medicare beneficiaries not covered under an employer-sponsored plan, TriCare, or a government sponsored plan, are subject to cost shifting and pay the highest price for prescriptions. b) Low income beneficiaries have more possibilities of benefits subsidies. 30) Why Bother a) Medicare supplement plans have limited benefits that result in dollar trading. b) Prescription plans need government subsidies in order to provide meaningful benefits. c) Tax subsidies are given to employers to encourage them to maintain drug coverage for retirees. 31) What Do The Advisors Need To Do a) Ask about current coverage b) Why? i) To determine if any action is required. c) If action is required, then determine type of coverage desired. i) Original Medicare Model ii) Medicare Advantage Model 32) Beneficiaries Will Do One of Four Things a) Nothing b) Change to Medicare Advantage c) Purchase PDP (Prescription Drug Plan) recommended or affiliated with Medicare Supplement Plan d) Purchase PDP (Prescription Drug Plan) after reviewing plan options for best coverage 4/17/2006 CS AdvoCare, Inc Page 7 of 13

8 Social Security/Medicare 33) What You Need to Compare PDP Plans a) Medicare Number b) Last Name c) Date of Birth d) Effective Date for Medicare or e) Zip Code f) Name and address of preferred pharmacy g) List of drugs i) Name of Drug ii) Dosage iii) Quantity for 30 day supply 34) Where do you get more information: a) CS AdvoCare, Inc b) State Health Insurance Assistance Program (SHIP) c) Centura Health Insurance Counseling for Seniors or d) Medicare e) Social Security f) Colorado Gerontological Society g) ) Where do you get more information: a) b) c) i) /retire2/retirechart.htm ii) /retire2/delayret.htm d) 4/17/2006 CS AdvoCare, Inc Page 8 of 13

9 Social Security/Medicare Appendix 4/17/2006 CS AdvoCare, Inc Page 9 of 13

10 Social Security/Medicare Appendix Medicare Supplements Core Plan A B C D E F G H I J Basic Basic Basic Basic Basic Basic Basic Basic Basic Basic Benefits* Benefits Benefits Benefits Benefits Benefits Benefits Benefits Benefits Benefits Excess (100%) Excess (80%) Excess (100%) Excess (100%) At-Home Recovery At-Home Recovery At-Home Recovery At-Home Recovery Preventive Care Preventive Care Basic Drugs ($1,250 Limit) Basic Drugs ($1,250 Limit) Extended Drugs ($3,000 Limit) 4/17/2006 CS AdvoCare, Inc Page 10 of 13

11 Social Security/Medicare Appendix New Medicare Supplements Basic Benefits 100% of Hospitalization plus coverage for 365 Days after Medicare Benefits End K 100% of Hospitalization plus coverage for 365 Days after Medicare Benefits End 50% Hospice cost-sharing 75% Hospice cost-sharing 50% of Medicare-eligible expenses for the first three pints of blood L 75% of Medicare-eligible expenses for the first three pints of blood 50%, except 100% for Preventive Services 50% Facility 50% 75%, except 100% for Preventive Services 75% Facility 75% Excess (100%) At-Home Recovery Preventive Care Extended Drugs $4,000 Out-of-Pocket Annual Limit $2,000 Out-of-Pocket Annual Limit ** Plans K and L provide for different cost-sharing for items and services than Plans A-J. Once you reach the Annual limit, the plan pays 100% of the Medicare copayment, coinsurance, and deductibles for the rest of the calendar year. The out-of -pocket annual limit does not include charges from your provider that exceed Medicare-approved amounts, called Excess Charges. You will be responsible for paying excess charges. *** The out-of-pocket annual limit will increase each year for inflation. 4/17/2006 CS AdvoCare, Inc Page 11 of 13

12 Social Security/Medicare Appendix In addition to being on Medicare, in 2005 you must be receiving the following: Low Income Subsidy Qualifications Do You Qualify? Who is Eligible Level 1 Level 2 Level 3 Level 4 Full Medicaid Medicaid (but with Income no higher benefits and income higher than than $13,230 income no higher level 1)* or SSI (single) or than $9,800 (without Medicaid); or $17,820 (couple)* (single) or Medicare premiums $13,200 (couple)* paid by your state Value of assets (not including your home, vehicles, burial plot or personal possessions) Not Applicable Not Applicable No more than $6,000 (single) or $9,000 (couple) Income no higher than $14,700 (single) or $19,200 (couple) No more than $11,500 (single) or $23,000 (couple) To find out eligibility Automatically Automatically enrolled Must apply Must apply enrolled * If your income is higher you may still qualify in certain circumstances - for example, if you live in Alaska or Hawaii, or have certain earnings that don't count, or if you or your spouse pays at least half the support of relatives living with you. Source AARP Bulletin 4/17/2006 CS AdvoCare, Inc Page 12 of 13

13 Social Security/Medicare Low Income Subsidy Qualifications What you get Drug Coverage Full (no gap) Full (no gap) Full (no gap) Full (no gap) Monthly Premium $0 $0 $0 Reduced on sliding scale based on income Annual $0 $0 $0 $50 Copayment per $1 for generics, $3 for brands $2 for generics $2 for generics 15 percent of cost of each prescription ($0 if your in a nursing home) $5 for brands $5 for brands prescription Copayment under catastrophic coverage ** $0 $0 $0 $2 generics $5 for brands ** After you've spent $3,600 out of pocket in a year. Source AARP Bulletin 4/17/2006 CS AdvoCare, Inc Page 13 of 13