Understanding Medicare for the Group Health Insurance Broker

1. Understanding Medicare for the Group Health Insurance Broker CE Class 210663 - For agent use only

2. Overview • Working together • Medicare Trends • Senior Options • What is Medicare • Overview of types of plans • Enrollment Timing • Rules for Groups • Next Steps – The Opportunity!

3. Working Together • Group Insurance Agents • Financial Planners • Medicare Agents • Physicians and IPAs • Employers and Human Resources

4. Medicare Trends • State of Medicare Industry • Today, average life expectancy = 78 years old • Avg. American on Medicare 13 years! • In 1965, average life expectancy = 67 years old • Avg. American only on Medicare 2 YEARS!! • Illness amongst Seniors • 80% of 55+ have at least 1 Chronic condition! • 25% of 65+ have 3 OR MORE Chronic conditions! • Obesity has more than doubled for people 55-74 years old! • Medicare is the 3rd largest program in Government budget! • After Defense Spending and Social Security! • Soon it will be the LARGEST budget item! • Americans are living longer…SICKER!

5. Medicare Trends • Significance of Changes: • TODAY - 52 million Medicare eligibles • Plus, 7000+ turning 65 every day. • That’s 200,000 a month! • In 2020 – 65 million Medicare eligibles • Plus, 13,000 turning 65 EVERY DAY! • That’s 400,000 a month! • People also losing group coverage & retirement plans • Confusion & Concern surrounding healthcare

6. Seniors Options at age 65+ • Stay on Group Plan • Retiree Plans • COBRA (limited) • Individual Medicare Plans • Medicare Supplement with Stand-alone Part D Plan • Medicare Advantage • Medicare Part A and B with Stand-alone Part D Plan

7. MEDICARE OPTIONS OPTION #1 Original Medicare + PDP OPTION #2 Original Medicare + PDP + Med. Supp OPTION #3 Medicare Advantage Medicare Card Covers 80% of Approved Srvcs. Medicare Card Covers 80% of Approved Srvcs. Medicare Adv. Card PDP Card Required by Gov. Assists w/ cost of drugs PDP Card Required by Gov. Assists w/ cost of drugs Use one card! Medicare pays carrier to manage your healthcare. Med Supp Card Pays for balance after Org. Med. (Plan F)

8. Where to go for Information • Medicare and You Guide (2018) • 2018 Choosing a Medi-Gap Policy • “Who Pays First” • Websites for Medicare and Social Security • www.medicare.gov • www.socialsecurity.gov

9. Medicare • Medicare is a health insurance program for: • People 65 years of age and older • People under age 65 with certain disabilities • People of all ages with End-Stage Renal Disease • Medicare is an entitlement • Part A premiums paid up with beneficiary or spouse working 40 quarters • Part B premiums $134.00 (*based on income)

10. Parts of Medicare Medicare PART A PART B PART C PART D

11. Part B Adjustments

12. Part D Adjustments

13. Medicare Basics: Part A Original Medicare – Part A • Hospital Stays • $1,340 Deductible for hospital stays days 1-60 • 61-90 days: $335/day coinsurance • 91-150 days: $670/day coinsurance • Skilled Nursing Facility Care • 1-20 days $0 per day • 21-100 days $167.50 per day • Days 100+ beneficiary pays 100% of costs All benefits above are 2018 benefits.

14. Medicare Basics: Part B Original Medicare – Part B • Doctors’ Services • Outpatient Hospital Care • Durable Medical Equipment • Some Medical Services (not covered by Part A) • For details, see "Medicare & You" at www.medicare.gov

15. Medicare Basics: Part B - 2018 • $134.00 monthly Part B premium (varies per income) • $183 Annual Deductible* • Other deductibles, copayments, coinsurance (Generally, 20% coinsurance for most services) • If you don't sign up for Part B when you are first eligible, you may have to pay a late enrollment penalty. (10% per 12 month period not covered)

16. Medicare Basics: What Medicare DOESN’T Cover Original Medicare does NOT cover: • Deductibles • Coinsurance and co-pays • Most outpatient prescription drugs • Dental care • Hearing aids, hearing exams and screenings • Routine eye care and most glasses • Most health care outside the U.S.

17. How To Cover what Medicare Does Not: • Medicare Supplement or Advantage plans • One must: • Have Medicare parts A & B • Live in the plans service area • NOT have ESRD

18. Medicare Supplement Plans • Health Insurance Plan sold by private insurance companies (policies) • Designed to fill in “gaps” of Original Medicare Part A and Part B • Companies must offer certain plans (A, C, F) but not all • Plans are standardized (6/2010) and regulated by states and Federal (CMS) • Plan premiums are in addition to Part B premiums • Do not include a Prescription Drug Plan (Part D)

19. Advantages of Med-Supp Plans • Choice of any Medicare contracted physician or hospital • Portable – Policy moves with the policyholder anywhere in the U.S. and its territories • Guaranteed renewable • May lower out-of-pocket costs • Covers co-pays and coinsurance

20. Prescription Drug Plans (Part D) • Medicare has minimum requirements • Plans can choose to increase benefits, but not fall below minimum requirements • Stand alone Prescription Drug Plans (PDP’s) have a monthly premium • Plans have different formularies, tiers, and co-pay amounts • One may have to pay a late enrollment penalty if not enrolled in a Part D plan when first eligible (1% of National Average Premium)

21. Part D Terms Defined • Formulary: A list of prescription drugs, both generic and brand name that are available through your health plan. • Tier: Drugs on a formulary are usually grouped into tiers, and your co-payment is determined by the tier that your medication is on. • Co-Pay: Your share of the cost of a prescription. The remaining cost is paid by your health plan. • Mail-Order: Prescriptions ordered through mail-order may receive discounts, such as receiving a 3 month supply for the co-pay of 2 months

22. The Stages of Coverage Once you spent $5000 True out of pocket (TROOP) for the year, you go into Catastrophic Coverage. Once in Catastrophic Coverage you will be charged $3.35 -$8.35 or 5% coinsurance whichever is greater for remainder of year. Ends December 31st All Part D plans cover the first $3,750 on covered drugs. There may be a up to a $405 Deductible on some Part D plans. Starts January 1st You will receive a discount on brand name drugs and generally pay no more than 35% for brand drugs and 44% for generic drugs until your yearly out-of-pocket drug costs reach $5,000 → →→→→→→→→→→→

23. Extra Help You may qualify for Extra Help, also called the low-income subsidy (LIS), from Medicare to pay prescription drug costs if your yearly income and resources are below the following limits: • Single person—Income less than $18,210 and resources less than $14,100 • Married person living with a spouse and no other dependents—Income less than $24,690 and resources less than $28,150 Income Resources

24. Medicare Advantage Plans (Part C) • Are offered by private companies approved by Medicare • Provide all Part A and Part B coverage and must cover, at least, all services of Original Medicare except hospice care • Hospice care is covered by Medicare • May offer extra coverage such as vision, hearing, dental, and/or health and wellness programs, and Part D. • Plan benefits are subject to yearly changes as approved by Medicare • Any Medicare Advantage premiums are in addition to Part B premiums

25. Medicare Advantage Plan Types • Health Maintenance Organization (HMO) Plans • Preferred Provider Organization (PPO) Plans • Special Needs Plans (SNP)

26. Medicare Advantage Election Periods • Annual Enrollment Period (AEP): October 15th through December 7th. • Annual Open Enrollment Period (OEP): January 1st through March 31st NEW! • Initial Election Period (IEP): 7 month Election Period Begins 3 months before month of entitlement Ends last day of 3rd month after month of the earlier effective date of Part A/B entitlement (usually 65th birthday). • Lock-In: People with a Medicare Advantage plan are “locked-in,” meaning they can only switch Medicare plans during certain times of the year unless they qualify for a Special Election Period. • Special Election Period (SEP): A time when beneficiaries can change their benefits because of specific life changes. Examples are moving out of a plan service area, or becoming eligible for Medicaid/Medi-Cal or leaving an Employer Plan

27. 2019 Guidelines • Annual Open Enrollment Period (OEP): January 1st through March 31st NEW! • MAPD eliminated • No sending unsolicited marketing materials to MAPD or Part D enrollee • One time election to go from MA plan to another MA plan or Original Medicare • Medicare Educational Events – Agent may provide business card, set up appts and provide communication materials (not plan benefits) • Business Reply Cards not required to be filed if no benefits are mentioned • Special Election Period (SEP): Part D SEP for Dual and other LIS Eligible Beneficiaries from monthly to once per quarter for first 9 months of the year.

28. Medicare Advantage Plans For all plans: • How to change your PCP (Primary Care Physician) • Enrollment and Dis-enrollment process • Appeals and Grievance process • Membership Card and Welcome Kit

29. Selecting a Suitable Plan www.medicare.gov • Medications • Preferred Doctors • Specialists • Important Added Value Benefits

30. Medicare Rules Groups Under 20 Employees • Medicare Primary. Group Secondary. • Employer may require use of Medicare Plan • Employee should enroll in both Parts A & B • Medicare Supplements & Part D Premiums Direct Pay or Flexible • Spending Accounts • Contributions must be available to all employees

31. Medicare Rules Groups Under 20 Employees Advantages for Groups Under 20 • Saves Money • Better Plan Designs • Better Networks Concerns: • Under Age Dependents • Rx Issues • Ancillary Benefits (Small Group hard to unbundle)

32. Medicare Rules for Groups Over 20 • Group Plan Primary, Medicare Secondary. • Employee should ask Medicare for a deferral or enroll in Part B • May not force or influence employees to leave the group plan • All contributions must be available to all employees • Flexible spending accounts money to fund Part B Premiums, Part D Plans & Medicare Supplement Plans set plan rules. • Group Primary, Medicare Secondary first 30 months.

33. Medicare Rules for Groups Over 20 • Employees may terminate group medical coverage and enroll in Medicare Individual Plan • Medicare Informational Meeting Should be made available to ALL employees. • Group Retiree Plan, Medicare Primary, Retiree Plan Secondary. • Disabled with Medicare; Groups 100 or greater Primary Medicare Secondary.

34. Group Medicare Retiree Plans • If Retiree plan is as good or better then Medicare Part B enrollment can be deferred. • The Vast Majority of retiree plans state Medicare is Primary & and Medicare Rules state this as well. • There are a wide range of retiree plans. They may Add reduce or terminate Benefit with out running afoul of ADEA Age Discrimination in Employment • Act of 1967 rules ADEA Rules Apply to retiree plans

35. Group Medicare Retiree Plans • Medicare Bridge Plans, Pay Retiree Benefits until Medicare Coverage begins. • A Medicare Wrap Around Plan. Coverage for Medicare Deductibles, Coinsurance & Additional Benefits. • MAPD Or Supplement Plans (typically a look like to Plan G)

36. Cobra Rules for Medicare • COBRA not considered Credible Coverage !!!!!!!! • Medicare Primary - COBRA Secondary • CAL COBRA ( Groups Under 20 ) Not for Medicare Eligible. When Eligible for Medicare Coverage, CAL COBRA will end. • When Eligible For Medicare the Options are (1) Pay for both COBRA & Medicare or (2) Decline COBRA and enroll in Medicare. • If Late Part B Add due to Employer coverage Medicare Beneficiary's have 8 months to add Part B Coverage without penalty.

37. Cobra Rules for Medicare • If Employee Over 65 waits till COBRA Coverage ends they may be required to pay penalty and have delayed enrollment in Medicare Part B. • Over 65 beneficiary may be assessed Late Part B & Part D penalties if delay enrollment • May have delayed Medicare Coverage (Part D/MAPD Plans enrollment within 63 days of loss of group coverage) • Spouse & Employee are different - one can have Medicare & one COBRA.

38. Next Steps • Employee/dependent may enroll in Part B two months prior to leaving Group Plan • Enrolls Social Security via website, phone or in-office appointment • Employer Completes L564 SS form (Request for Employment information) • Employee/dependent may enroll in Medicare Advantage or Stand-alone within 63 days of loss of plan • Employee/dependent may enroll in MediGap within 6 months of Part B coverage.

39. Individual Coverage • Individual coverage is not creditable coverage!!! • After the initial enrollment period ends (7+ mos. at age 65) person may be subject to delay of Part B and penalties! • After initial enrollment ends, person may be subject to Part D penalties as well. • Individual member services at carriers are not knowledgeable about this! In CA individual may stay on individual plan. • If subsidized under Covered CA, Medicare covered person (A and/or B) loses subsidy

40. Next Steps • Employee/dependent may enroll in Part B two months prior to leaving Group Plan • Enrolls Social Security via website, phone or in-office appointment • Employer Completes L564 SS form (SEP) • Employee/dependent may enroll in Medicare Advantage or Stand-alone within 63 of loss of plan • Employee/dependent may enroll in MediGap within 6 months of Part B coverage.

41. Next Steps • Make sure employer plan terminates the employee’s/dependent's prior Group coverage • Payment of Part B, Part D and Medicare Supplement premiums : • Refer to Tax Accountant or CPA!

42. MEDICARE REGULATIONS “The Rules” • Must certify each year to sell Medicare products! • Cannot use Medicare as a “bait & switch”! • MUST care more about Clients than the Commission! • Protect your client’s personal/private information, at all times! • Never accept/offer gifts or financial incentives as inducement to enroll client in a particular plan! • Don’t disparage competitors or Original Medicare! • Don’t discriminate! • Always secure a signed Scope of Appointment • Follow THE RULES!

43. SCOPE OF APPOINTMENT

44. The Opportunity Y E S NO Understanding Demand • Original Medicare does NOT provide adequate coverage! • Americans WANT to live healthier lives! • Medicare plans are a MUST HAVE! • HUGE GAP between what Consumers know & what they need to know! • Agent Advocates are crucial to “how we live!” • NEED Advocates – NOT order-takers

45. The Opportunity • More than 35 million persons, or about 13% of the population in the US today, are 65 years of age or older. • The 77 million baby boomers are turning 50 at the rate of 10,000 more per day every day for the next 10 years! • The market is underserved by good agents • Additional sales opportunities for LTC, Life and Annuities • It is not “If” they will buy a Medicare Plan, it is “Who are they going to buy it from?