Many of you know that Medicare is government-sponsored health care insurance for those age 65 and older, and a select few others. The program currently covers about 61 million people. Medicare Part A covers inpatient hospital stays, rehabilitation in a skilled nursing facility, hospice care, and some home health care. Part B covers doctors’ services, outpatient care, medical supplies, and preventative services. Because there is no limit on annual out-of-pocket expenses, many people carry a supplemental insurance policy that pays for deductibles and copayments. These are called Medigap policies. These policies are sold through private insurance companies approved by Medicare. Prescription drug coverage is also sold separately as Part D through private insurance companies.
Many seniors like the flexibility that this combination of Medicare and Medigap insurance provides because they can go to any health care provider that accepts Medicare. Medicare pays its share of the approved amount for covered health care costs first, and then Medigap pays its share. However, there are also some limitations. Medicare will deny coverage for a procedure or treatment that it determines to be medically unnecessary. And Medigap will only pay its share if Medicare pays first. There are also some important expenses that Medicare does not cover, including hearing aids, vision care and dental care.
Medicare Advantage Plans are an alternative to Original Medicare. About one-third of Medicare recipients currently use Medicare Advantage Plans. They are sometimes called Part C. These policies are sold by private insurance companies. If you join a Medicare Advantage Plan, you receive Part A (hospital insurance) and Part B (medical insurance) coverage from the Medicare Advantage Plan, not from Original Medicare. Original Medicare will still cover the costs for hospice care, some new Medicare benefits, and some costs for clinical research studies. You can’t use a Medigap Policy with Advantage plans. But out-of-pocket costs are usually capped.
Medicare Advantage Plans work like HMOs and PPOs. Generally, you must use facilities, physicians, and pharmacies that participate in the plan’s network. Some allow for non-network coverage. Emergency and urgently needed care are covered both in- and out-of-network. One reason for using a Medicare Advantage Plan is that it may offer benefits that Medicare does not, such as vision, hearing, dental, gym memberships, and health/wellness programs. There are also cost savings. The monthly premium usually includes Medicare prescription drug coverage (Part D).
There are a lot of different Medicare Advantage Plans. They charge differently for out-of-pocket costs. They have different rules for how services are received. And they have different networks of facilities and providers. Each year, plans set the amounts they charge for premiums, copays, deductibles, and services. The plan (rather than Medicare) decides the premiums. All these things can change every year. The network of providers and facilities can change anytime. Advantage Plans can also choose not to cover the costs of services that are not medically necessary under Medicare.
Earlier this year, the Centers for Medicare & Medicaid Services (“CMS”) expanded how it defines the “primarily health-related” benefits that insurers are allowed to include in their Medicare Advantage policies. As a result, these plans may include new benefits in 2019, including air conditioners for people with asthma, healthy groceries, rides to medical appointments, home-delivered meals, and non-skilled home-care services.
According to CMS, the new rules will expand benefits to items and services that may not be directly considered medical treatment but will provide care and devices that prevent or treat illness or injuries, compensate for physical impairments, address the psychological effects of illness or injuries, or reduce emergency medical care. The goal is to keep people healthy and well, making it easier for them to live longer and more independently. A physician’s order or prescription will not be required, but the new benefits must be “medically appropriate” and recommended by a licensed health care provider. Additional benefits may include simple modifications in beneficiaries’ homes, such as installing grab bars in the bathroom, or aides to help with activities of daily living, such as dressing, eating, and other personal care needs. The new plans may also be willing to pay for non-skilled in-home care. Details of the Medicare Advantage Plan benefit packages for 2019 must first be approved by CMS and will be released in the fall when the annual open enrollment begins. These new benefits will persuade more seniors to use Medicare Advantage Plans in the future. This will be good for both individuals and for the country if it allows seniors to stay in their homes longer and lead healthier, more independent lives.