Hot Topics in Medicare
Congress created Medicare in 1965. Over the past 51 years the health coverage landscape has changed dramatically. Medicare beneficiaries are fortunate to have a trained corps of volunteers available to counsel on Medicare matters. I wish to highlight four trends and complexities in the Medicare landscape to help Contra Costa attorneys recognize situations that may warrant a referral to HICAP when working with clients on estate planning matters or medical hardship cases.
Employer retiree plans and exchanges
Many employers are cutting back their retiree health benefits. One way they are doing this is by offering their soon-to-be retirees a subsidy or cash allowance for plans that are available through exchanges. The retiree must use only those plans offered through the exchange their company uses. It would behoove every consumer to compare carefully those plans with plans generally available to Medicare beneficiaries on the open market. They may find other options provide better prescription drug coverage, offer more choice of physician networks or hospitals, or fit their needs better for some other reason.
Hospital stays – observation vs. inpatient status
Nationally, hospitals are engaging in a vexing trend to keep patients overnight, sometimes for days, without admitting them as inpatients. Patients are kept under observation status. Hospitals are able to bill Medicare Part B (outpatient medical services) for services and treatment rendered while the patient is in observation status. The problem for the Medicare beneficiary lies in the chance that they may need a skilled nursing facility afterwards. Medicare will cover skilled nursing facilities for short-term rehabilitative purposes only after the beneficiary has been admitted for three days. Hospitals bill Medicare Part A for inpatient stays. This means the patient must cross three midnights as an inpatient to be able to access the Medicare nursing home benefit. Every person who is “hospitalized” must receive paperwork clearly stating whether s/he is admitted as an inpatient. Verbal assurances are not sufficient for what may subsequently lead to an appeal of future billing.
The Affordable Care Act (Obamacare) and Medicare
The Affordable Care Act became law in 2010. It includes benefits to Medicare beneficiaries, most notably a shrinking of the coverage gap, commonly called the donut hole, in Part D prescription drug coverage. By 2020 this gap will be eliminated and Part D will have the same type of cost-sharing in Part D as it does in Part B (outpatient services). Medicare beneficiaries have already saved over $10 billion in out-of-pocket drug costs through the closing of the donut hole over the past five years.
The ACA also created individual health insurance plans for people who do not have access to other health insurance coverage. In California the entity established for selling and enrolling people in those plans is called Covered California. Subsidies are available through Covered California for individuals whose income does not exceed 400% of the federal poverty limit. When people turn 65 they generally must actively disenroll from their Covered California plan and enroll in Medicare. They will lose their subsidy when they do so and will be unpleasantly surprised. There are exceptions to this and the best recommendation if you have a client in this situation is to refer your client to HICAP.
In addition to creating individual health plans, California also accepted the federal government’s challenge to expand customary eligibility for Medi-Cal up to 138% of the federal poverty level. This expanded Medi-Cal is called MAGI (Modified Adjusted Gross Income) Medi-Cal. Again, when someone on MAGI Medi-Cal turns 65 they must enroll in Medicare. Please refer these clients to HICAP because they may be able to convert their MAGI Medi-Cal to regular Aged and Disabled Medi-Cal and keep important Medi-Cal benefits.
Low Income Programs
This discussion of MAGI Medi-Cal leads to a final note on low income programs available to eligible Medicare beneficiaries. Medicare Savings programs, administered through the county Medi-Cal offices, offer valuable benefits. We know many eligible beneficiaries are not taking advantage of them. These benefits may include having the Part B premium paid by Medi-Cal as well as having the prescription drug premium and co-payments greatly reduced or completely covered. One of these Medicare Savings Programs, Qualified Medicare Beneficiary (QMB), will not only pay the Part B premium and provide the drug subsidy, but it will also pay for Part A in those situations where Part A is not free to the beneficiary.
This is particularly valuable to immigrants or others who do not have 40 quarters of service time paid into Social Security. HICAP encourages you to refer clients to us so that we may screen them for eligibility.
The low-income prescription drug program is known as Extra Help or Low Income Subsidy. Separate application for Extra Help can be made directly on the Social Security website: www.ssa.gov. HICAP is extremely interested in enrolling as many people as possible in the Medicare Savings Programs and in Extra Help.
If you want to refer clients to HICAP, please call 800-510-2020, option 2 or (925) 602-4163. Callers will have to leave their name, phone number and zip code. A trained volunteer counselor will return their call. Thank you for your interest in Medicare and in HICAP.