Medicare

Because of general confusion about the rules regarding enrollment in Medicare Part B, nearly 700,000 Medicare beneficiaries are now paying late Part B enrollment penalties according to the Center for Medicare and Medicaid Services.

This is the most common question I get from people approaching 65 who are still working, “Do I have to sign up for Medicare Part B?”  They ask that question because they intend to remain enrolled in their employer’s group health insurance plan after turning 65.  For most people in 2019, the monthly premium for Part B coverage is $135.50.  The premium goes up for individuals with adjusted gross incomes above $85,000 if filing an individual tax return and $170,000 if filing a joint tax return.  In fact, there are five additional premium rates depending on one’s AGI.

So the question is why pay the Part B premium if you’re covered by a group plan at work and for which you’re probably paying a portion of the premium through payroll deductions.  In such cases, it’s possible to delay your Part B enrollment without a penalty being assessed later when you do enroll in Part B and that’s exactly what many people do. However, for those who have remained in a group plan after their employment ended through COBRA, it’s important to understand that CMS does not consider COBRA to be “creditable coverage”.  This means that you would be subject to a late enrollment penalty if you don’t enroll in Medicare Part B within eight months following the termination of your group plan enrollment even if you continued with the group plan enrollment under COBRA.

As people work later in life and delay receiving Social Security, they may not be aware that such a delay means that they won’t be automatically enrolled in Part B when they turn 65. Another misunderstood part of the Medicare enrollment process is the fact that Social Security does not automatically enroll you in Medicare Part B if you aren’t yet receiving your monthly Social Security retirement benefit.  Rather, you must make a proactive Medicare Part B enrollment choice as you approach age 65.  If you are receiving your monthly Social Security retirement benefit before turning 65, Social Security assumes that you want to be enrolled in both Medicare Part A and B and will deduct the Part B premium from your monthly Social Security retirement benefit.  If that’s your situation, and you want to delay your Part B enrollment, you’ll need to proactively inform Social Security that you want to delay your Part B enrollment.

Some in Congress want to make all of this more transparent through legislation called the Beneficiary Enrollment Notification and Eligibility Simplification (BENES) Act. The BENES act has not gained much traction in Congress yet but perhaps this will be one thing on which the new House and existing Senate can agree.  Social Security would send out notices to people approaching age 65 explaining Part B enrollment including how the specific enrollment periods work. This should eliminate some of the circumstances where the transition to Part B is mismanaged resulting in lifetime late enrollment penalties.

The rules are complicated and not well understood by most human resource experts in employer benefits departments.  They typically lack the Medicare knowledge to guide their employees and retirees on Medicare enrollment.  Further, the federal government provides virtually no notification to people who are nearing Medicare eligibility about when and how to do so.  As a result, people with employer-sponsored group coverage often bear the full burden of understanding and navigating Medicare’s complex enrollment rules which can lead to costly mistakes.  The following are the rules regarding the enrollment periods for Medicare Part B:

1)   Initial Enrollment Period–The seven-month period beginning with three months before the 65^thbirth month, the birth month, and three months after the birth month.

2)   Special Enrollment Period– Available to those who have continued to stay on their own (or their spouse’s) group health plan. Upon termination of their enrollment in the group health plan, they have an eight-month period during which to sign up for Part B in order to avoid the late enrollment penalty.

3)   General Enrollment Period– Here’s the nasty one.  Using the General Enrollment Period means that the individual has missed their Initial Enrollment Period, or the Special Enrollment Period, and wishes to sign up for Medicare Part B. They fall into the General Enrollment Period, which they can only utilize from January 1 to March 31, but with coverage not beginning until July 1of that year.  Depending on when a person chooses to sign up from Jan. 1 to March 31, they may have encountered a “Blackout Period”, which can run up to ten months, or in some cases, even over a year, depending on the sign up time.  And that’s where they create the 10% penalty per year for each year, which lasts forever.

‘Greg Says’….The best advice I can offer with regard to the Part B enrollment question is to seek the free counsel of a licensed health insurance agent. Relying on the advice of your company’s HR department, well-intentioned friends, or trying to figure it out on your own, could result in a costly mistake from which there is no recovery.

Christina Farr | CNBC.com

Jan 16, 2019

Apple is in talks with private Medicare plans about getting Apple Watches into the hands — or on the wrists — of millions of people over the age of 65.

It makes a lot of sense for Apple to do that, health experts tell CNBC, since it could prevent pricey doctor or hospital visits.

Apple has previously signed a deal with insurance giants Aetna and United Healthcare about subsidizing the cost of the watch.

Apple has been in talks with at least three private Medicare plans about subsidizing the Apple Watch for people over 65 to use as a health tracker, according to people familiar with the discussions.

The insurers are exploring ways to subsidize the cost of the device for those who can’t afford the $279 price tag, which is the starting cost of an older model. The latest version of the device, which includes the most extensive health features including fall detection and an electrocardiogram to measure the heart’s rhythm, retails for a minimum of $399, which many seniors could benefit from but can’t afford.

The talks have not resulted in any official deals just yet, the people said. Apple has paid a visit to several of the largest insurers in the market, as well as some smaller, venture-backed Medicare Advantage plans. The people involved declined to be named as the discussions are still private.

Health experts say that seniors are an ideal market for the Apple Watch, which has introduced features that can be used by anyone, but are most beneficial to seniors, including fall detection and cardiac arrhythmia monitoring. It also makes sense as a business model for insurers, as seniors are a particularly lucrative market.

“It’s the segment of health insurance with the highest dollar revenue and margin per member,” explains Augustin Ruta, a health insurance consultant at A2 Strategy Group. Ruta also noted that Medicare members enrolled in these private plans tend to have lower churn rates, which gives insurers more of an incentive to invest in members’ long-term health outcomes.

About 22 million seniors, and growing, are now enrolled in a Medicare Advantage plan, which are private health plans that receive government payouts for providing services to seniors — about $10,000 per member, on average. Consulting firm PricewaterhouseCoopers, expects the Medicare Advantage market to generate more than $350 billion in annual revenue by 2020, although the market is regulated to limit insurers’ profits.

The government payments provide more flexibility for insurers running Medicare Advantage plans to invest in new technologies, like the Apple Watch, if they have a demonstrated benefit.

Apple Watch might be pricier than other trackers, such as the Fitbit, but insurance executives say they’d work with Apple if the company can show that it helps its members detect potentially serious health problems before they require an expensive intervention.

“Avoiding one emergency room visit would more than pay for the device,” said Bob Sheehy, CEO of Bright Health, an insurance start-up with a Medicare Advantage plan, and the former CEO of United Healthcare.

Apple is increasingly invested in this kind of research, such as its heart study with Stanford University and its partnership with Zimmer Biomet to better understand through the Apple Watch how patients can more quickly recover from knee and hip replacement procedures.

The latest Apple Watch now includes an electrocardiogram, which is designed to pick up on atrial fibrillation, a condition that impacts far more people over the age of 65 than their younger counterparts, and puts them at a higher risk for stroke and other potentially fatal health outcomes. While Apple Watch doesn’t diagnose disease or replace a doctor, the company is positioning it as an “intelligent health guardian.”

Apple CEO Tim Cook told CNBC in an interview last week that health technology would be a major initiative for the company in the future.

“We are taking what has been with the institution and empowering the individual to manage their health. And we’re just at the front end of this,” Cook said. “But I do think, looking back, in the future, you will answer that question: Apple’s most important contribution to mankind has been in health.”

Apple’s health team is also looking to work with other large insurers outside of Medicare. It signed a deal with Aetna in August of last year; and in November 2018, it integrated with United Healthcare for a program that rewards those who walk at least 10,000 steps per day to subsidize the cost of a watch. It is also working with life insurer John Hancock to offer a steeply discounted watch to those who live healthy lifestyles.

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At ‘Greg Says’ we believe this is a trend that has legs because everybody wins – Apple, the insurer, and the consumer.

 

Planning to travel abroad soon?  Before you go, remember to look into how your Medicare coverage works outside the United States.

If you have Medicare Part A (Hospital Insurance) and Part B (Medical Insurance), your health care services and supplies are covered when you’re in the U.S.  The 50 states, the District of Columbia, Puerto Rico, the U.S. Virgin Islands, Guam, the Northern Mariana Islands, and American Samoa are considered part of the U.S.  In general however, health care you get while traveling outside the U.S. isn’t covered.

Medicare may pay for inpatient hospital, doctor, ambulance services, or dialysis services that you get in a foreign country in the following rare cases:

• You’re in the U.S. when a medical emergency occurs, and a foreign hospital is closer than the nearest U.S. hospital that can treat your medical condition.
• You’re traveling through Canada without unreasonable delay by the most direct route between Alaska and another state when a medical emergency occurs, and a Canadian hospital is closer than the nearest U.S. hospital that can treat the emergency.
• You live in the U.S. and a foreign hospital is closer to your home than the nearest U.S. hospital that can treat your medical condition, regardless of whether an emergency exists.

In some cases, Medicare may cover medically necessary health care services you get on board a ship within the territorial waters adjoining the land areas of the U.S. However, Medicare will not pay for health care services you get when a ship is more than 6 hours away from a U.S. port.

Medicare drug plans do not cover prescription drugs you buy outside the U.S.

So, what is your out-of-pocket exposure for health care when travelling outside the U.S. if you have Original Medicare only?

You pay 100% of the costs, in most cases.  In the rare situations described above, you pay 20% of the approved amount, and the Part B deductible applies.

• Medicare Part A (Hospital Insurance)covers hospital care (care you get when you’ve been formally admitted with a doctor’s order to a foreign hospital as an inpatient).
• Part B covers emergency and non-emergency ambulance and doctor services you get immediately before and during your covered foreign inpatient hospital stay.
• You pay the part of the charge you would normally pay for covered services. This includes any medically necessary doctor and ambulance services you get in a foreign country as part of a covered inpatient hospital stay. You also pay the coinsurance, copayments, and deductibles you’d normally pay if you got these same services or supplies inside the U.S.
• Medicare generally will not pay for services, like ambulance trips to return home, in either of these cases:
  • Medicare didn’t cover your hospital stay.
  • You got ambulance and doctor services outside the hospital after your covered hospital stay ended.

What if, in addition to Original Medicare, you have a Medicare supplement (Medigap) plan?

If you have a Medicare supplement (Medigap) policy, you may have some additional coverage, beyond what Original Medicare provides, for health care services or supplies that you get outside the U.S.  Standard Medigap Plans C, D, F, G, M, and N provide foreign travel emergency health care coverage when you travel outside the U.S. Plans E, H, I, and J are no longer for sale, but if you bought one before June 1, 2010 you may keep it.  All of these plans also provide foreign travel emergency health care coverage when you travel outside the U.S.

If you have a Medigap Plan C, D, E, F, G, H, I, J, M or N, your plan:

• Covers foreign travel emergency care if it begins during the first 60 days of your trip, and if Medicare doesn’t otherwise cover the care.
• Pays 80% of the billed charges for certain medically necessary emergency care outside the U.S. after you meet a $250 deductible for the year.
• Foreign travel emergency coverage with Medigap policies has a lifetime limit of $50,000.

Before you travel outside the U.S., talk with your Medigap plan or insurance agent to get more information about your Medigap coverage while traveling.

Who files Medicare claims when you receive health care services outside the U.S.?

Foreign hospitals are not required to file Medicare claims.  You may need to submit an itemized bill to Medicare for your doctor, inpatient, and ambulance services if both of the following apply:

• You are admitted to a foreign hospital under one of the situations noted previously.
• The foreign hospital doesn’t submit a Medicare claim for you.

How can you minimize your out-of-pocket exposure to health care costs when travelling outside of the U.S.?

Because Medicare has limited coverage of health care services received outside the U.S., you may want to consider purchasing a travel insurance policy.  An insurance agent or travel agent can give you more information about travel insurance.  Remember that travel insurance does not necessarily include health care coverage, so it’s important to read the conditions and restrictions of the policy carefully.

Some Medicare Advantage plans include limited health care coverage while travelling out of the U.S. If you have such a plan, check with the company or with your agent for the extent of the coverage as each company’s provisions can be quite different.

The following link will take you to a useful CMS-produced video on the subject of this newsletter: https://www.youtube.com/watch?v=yq2WbpPK-9c

Why It’s Important to Know the Difference Between Being “Admitted” to the Hospital and Being “Under Observation”

Medicare patients in a hospital seldom know whether or not they’ve been “admitted” to the hospital, or are under “observation”. Being admitted means that the hospital stay will be coded as a Part A claim. Being “under observation” makes it a Part B claim. In addition to higher cost-sharing responsibilities for the patient, when coded as “under observation”, there are no benefits available to help with the cost of rehab in a Skilled Care Facility following a hospital stay. This can be financially devastating for those requiring rehab after a surgery, heart attack, or stroke.

A patient shouldn’t have to question whether or not they’ve been admitted. It’s reasonable to assume that if you are in the hospital overnight, you’ve been admitted. The last thing in a patient’s mind is their official status in the hospital – as if they would even know to ask about it in the first place. Thankfully, that information will now be available to them within 24 to 36 hours after becoming a patient.

Under the recently enacted Notice of Observation Treatment and Implication for Care Eligibility Act (NOTICE Act), hospitals are now required to provide notification to individuals receiving observation services as outpatients for more than 24 hours. This notice informs the patient that being coded as observational means that their stay will result in a Part B Medicare claim, which results in a higher charge to the patient as in a copay and 20% of the Medicare-approved amount for most doctor’s services.

Although this is a good first step, it doesn’t solve the problem of rehab services not being covered by Medicare at all because the original hospital claim was coded as a Part B claim. At least now, however, the patient must be made aware of their official status while in the hospital and the resulting coding of their hospital claim to Medicare.