Changes in Medicare Deductibles, Premiums, etc. for 2014 - Parts B, A, C, D

Part B

Most of the Medicare annual change amounts have been released for 2014, and the good news is that the Part B premium and deductible will not change.  That is, the Part B monthly premium will stay at $140.90, and the annual deductible at $147.  This is particularly nice for beneficiaries as your Social Security cost-of-living increase will only be 1.5%, but none of this rather modest increase will be eaten up by any rise in your Part B premium.

For those of you who have to pay a High Income Part B Premium Surcharge, your monthly surcharge will not change.  And while only about 5% of beneficiaries must pay these surcharges, remember that the base income amounts (the so-called modified adjusted gross income, or MAGI) which determine if you are subject to this stay the same from year to year, so some few of you who don’t pay this in 2013 may have to in 2014.  (If so, you should have been informed of this by the Social Security Administration by now.)  And also remember that your 2014 surcharge will be based on your 2012 income, and this may put you in a higher or lower surcharge bracket, or may put you into or out of having to pay a surcharge at all.  (Again, you should have been informed of this by Social Security by now.)

And the Part B coinsurance rate for outpatient mental health services will decrease to 20% in 2014.  That is, the coinsurance for these services will, beginning in 2014, be the same as for the other Part B services subject to coinsurance.  So in this respect will now be parity between all Part B services – mental or physical – for the first time since the program began.

Part A

The Part A inpatient hospital deductible goes up by $32 in 2014 to $1,216. This is the amount you are responsible for the first 60 days of an inpatient stay.  And, of course, the various other Part A co-pays have modest increases.  For longer hospital stays (from 61 to 90 days), the daily co-pay will be $304 (up $8); for even longer hospital stays (over 90 days), the daily co-pay will be $608 (up $16); and the daily co-pay for long skilled nursing facility (SNF) stays (from 21 to 100 days) will be $152 (up $4).

Those relatively very few of beneficiaries who pay for their Part A will welcome the news that their monthly premiums will again decrease in 2014.  The Part A premium for those currently paying $441 a month will decrease $15 a month to $426, and for those paying $243, it will go down $9 to $234 a month.

Part C

The Centers for Medicare & Medicaid Services reports that in Part C – Medicare Advantage or Medicare managed care – the premiums have gone up, on average, about 5% for 2014, or about $1.60 a month, quite modest.  But your current plan’s may have changed more, and always remember that you need to do your homework every year to see if you are in the best plan for you.  Or, if you are in Original Medicare, you may wish to consider joining a Medicare Advantage plan.  (For example, a lot of work has been done to improve Special Needs Plans, and to develop plans that work for dual Medicare-Medicaid beneficiaries.)  Remember that you mostly have only until Saturday, December 7, 2013 to join or change plans, that is, the Annual Election Period or Open Enrollment lasts only until that date.

Several exceptions exist to this deadline. One is that if your plan is leaving the Medicare program; if so, this will occur effective with Wednesday, January 1, 2014.  In addition to the Annual Open Enrollment Period, you also have from the day after it ends, that is, Sunday, December 8, until Friday, February 28, 2014 to change.  But don’t wait; if you change during the Annual Open Enrollment, or after it ends but in December 2013, you will be in your new plan January 1, 2014, and so will not have a gap in Medicare Advantage coverage.  (Recall that if your plan leaves, you will be put into Original Medicare January 1, 2014 if you don’t opt for a Medicare Advantage plan.)  But if you enroll in a plan in January, you will be put into it effective February 1, 2014; if you enroll in February, you will be enrolled effective March 1, 2014.)

Another is that, if there is a plan with a five-star quality rating where you live (and there may not be one where you are), you can switch to it after Open Enrollment in 2013 and in any month in 2014 (except December). You will be enrolled in your new plan on the first of the month following the month in which you enroll.  But, if you have your Part D drug coverage with your current Medicare Advantage plan, and switch to a 5-star one which does not have Part D drug coverage, you will lose your drug coverage, and will not be able to get it back until January 1, 2015.

Finally, and Medicare doesn’t generally “advertise” this (for example, it’s not explained in the Medicare and You booklet), but beneficiaries who are enrolled in “low performing” Medicare Advantage plans will be given the opportunity to enroll in higher quality plans.  By “low performing” is meant any plan which has had an overall star rating of less than three stars for three years in a row.  The Centers for Medicare & Medicaid Services (CMS) sent notices in October to individuals enrolled in these plans informing them of their plan’s low rating and offering them an opportunity to request a special enrollment period (SEP) to move into a higher quality plan for 2014.  They can do this any time after the Open Enrollment and in any month in 2014 (except December).  And they can only make this enrollment by calling the 1-800-MEDICARE number.  But, if you have your Part D drug coverage with your current Medicare Advantage plan, and switch to a better one which does not have Part D drug coverage, you will lose your drug coverage, and will not be able to get it back until January 1, 2015.

And for those of you who want to disenroll from a Medicare Advantage plan, you may drop your plan and go back to Original Medicare anytime between Wednesday, January 1 and Tuesday, February 14, 2014.  If you do this, you can also join a Part D standalone plan if you had your Part D drug coverage with your Medicare Advantage plan, or if you had no Part D coverage at all.  (If you have your drug coverage with a Part D standalone plan instead of your Medicare Advantage plan, you cannot change your Part D plan.)

Part D

For Part D in 2014, again changes are minimal from 2013.  On the whole Part D premiums have increased by only a hair from 2013 (although your current plan may be increasing its significantly). And, in general, beneficiaries will pay less for their drugs in 2014.  As usual, the overall recommended structure has changed somewhat. The recommended deductible is $310, but remember that many plans have none or a smaller deductible than this. The next payment band, the 25% Coinsurance Band, covers the next $2,540 of your drugs, and you pay 25% of this, or $635, while your plan covers $1,905.  Your plan may structure this differently.  In the “donut hole,” also known as the “coverage gap,” in 2014 for brand name drugs, the plan will pay 52.5% of the cost of a drug, and you, the beneficiary, 47.5%. (These figures were the same in 2013.)  And for generic drugs, the government will pay 28% and, you, the beneficiary, 72%. (In 2013 the government paid 21% and the beneficiary, 79%, so you get a better deal.)  The beneficiary will remain in the donut hole until their “drug expenses” total $4,550.  And, finally, in the Catastrophic (or 5% Insurance) Band, which starts when your drug “expenses” reach $4,550, you will pay a minimum of $2.55 for a generic or $6.35 for a brand name drug, but no more that 5% of its cost, if that is greater than these amounts. (And by “expenses” is meant your deductible, anything you spent in the 25% band and in the donut hole, AND the 52.5% that manufacturers discount on your brand name drugs in the donut hole (but not the 28% the government pays on your generics).  Unless otherwise noted, all the amounts for 2014 are lower than the 3013 amounts; this is laid out in greater detail in my posting of October 3.

The structure for “Extra Help” or “Low Income Subsidy” beneficiaries is, of course, different, but these beneficiaries will experience slight decreases in their liabilities.

But the admonition above with regard to Medicare Advantage plans applies here also – do your homework to make sure you are in the best Part D prescription drug plan for 2014.  A recent Kaiser Family Foundation study showed that beneficiaries are reluctant to change their Part D plans and, as a result, the vast majority of them pay more for their drugs that they could.  And the special enrollment periods discussed above (Non-Renewing plans, the 5-Star Quality Rating, and Low-Performing plans) all apply to Part D plans also; the special disenrollment period does not.

And for those of you who have to pay the High Income Part D Premium Surcharge, your monthly surcharge will increase, but quite modestly, ranging from 20 cents a month to $2.70 a month.  The details are in my post of October 3.  But remember, as with the High Income Part B Premium Surcharge discussed above, your surcharge will be based on your 2012 income, and this may put you into a higher or lower bracket, or may put you into or out of having to pay a Part D premium surcharge.

The Part D Low Income Subsidy (“Extra Help”) in 2014

Requirements to Become Eligible for Extra Help

This reviews the two main requirements for the Part D low income subsidy (LIS), that is, “Extra Help,” and also indicates what the basic structure of the Part D benefit looks like for those who qualify for it during 2014.  The two main requirements are, of course, low income and few resources.

At this point in time (October 2013) you can qualify for Extra Help if your income is at or below $17,235 AND your resources are at or below $13,300 for an individual; or if your income is at or below $23,265 AND your resources are at or below $26,580 for a couple.  Remember that neither your home nor your car or vehicle count as resources.  And it has been said a thousand times before, but bears repeating, if your income or resources are ANYWHERE near these limits, apply, because there are many, complex rules as to what counts as income and what counts as resources, and as to how these are calculated if additional people live in your household.  (And note that all the income levels are higher in the states of Hawaii and Alaska than we show here.)

All this is fully explained in Chapter 7 (which begins on page 99) of Managing Your Medicare.

Be aware that as we move forward, new limits for 2014 will be announced for both the resource levels and the income levels.  The new resource levels are typically announced in the Fall, and the new income levels, in January.  I will update this text as these new amounts are issued by the government.

The income and resources levels shown below are the ones which are currently being used to determine eligibility, but the amounts for what Extra Help will cover are those which will go into effect on January 1, 2014.  And to summarize before we get into the details, if you do qualify for Extra Help, it will pay all or part of your Part D monthly premium, all or part of your annual deductible, and will eliminate or reduce your co-payments on drugs.  (Full payment of the premium is restricted to plan premiums which are at or below the “benchmark” premium for your state.  The benchmark premiums for each state for 2014 are shown the end of this text.)  The specifics are as follows:


Basic Structure of the Extra Help Benefit in 2014

Those who qualify for Extra Help at these levels will pay no premium, and will not be subject to the deductible, and the cost of their drugs will be as follows:

If you have Medicaid AND:

You live in a nursing home or are in a community-based waiver program:
You pay nothing.

Your income is at or below $11,490 (individual) or $15,510 (couple):
You pay $1.20 for a generic or preferred brand, and $3.60 for a non-preferred brand.*

Your income is above $11,490 (individual) or $15,510 (couple):
You pay $2.55 for a generic or preferred brand, and $6.35 for a non-preferred brand.*


If you don't have Medicaid but your state helps you pay your Medicare premiums (that is, you are in the “Medicare Savings Program”) OR you get supplemental security income (SSI):
You pay $2.55 for a generic or preferred brand, and $6.35 for a non-preferred brand.*


If you are not in the categories above, but you qualify for Extra Help because your income and resources levels are as shown below, the cost of your drugs will be as follows, and you will be subject to an annual deductible and monthly premium payments as follows:

If your income is below $15,512 (individual) or $20,939 (couple) & resources are at or below $8,580 (individual) or $13,620 (couple):
You pay $2.55 for a generic or preferred brand, and $6.35 for a non-preferred brand.* You pay neither a premium nor a deductible.

If your income is below $15,512 (individual) or $20,939 (couple) & resources are at or below $13,300 (individual) or $26,580 (couple):
You pay 15% of the cost of your drugs, plus you are subject to a $63 annual deductible.** You pay no premium.

If your income is at or below $16,086 (individual) or $21,714 (couple) & resources are at or below $13,300 (individual) or $26,580 (couple):
You pay 15% of the cost of your drugs, plus you are subject to a $63 annual deductible, and you must pay 25% of your premium.**

If your income is below $16,661 (individual) or $22,490 (couple) & resources are at or below $13,300 (individual) or $26,580 (couple):
You pay 15% of the cost of your drugs, plus you are subject to a $63 annual deductible, and you must pay 50% of your premium.**

If your income is below $17,235 (individual) or $23,265 (couple) & resources are at or below $13,300 (individual) or $26,580 (couple):
You pay 15% of the cost of your drugs, plus you are subject to a $63 annual deductible, and you must pay 75% of your premium.**


*If your “drug expenses” ever exceed $4,550 in 2014, you will pay nothing for any prescription. (These are “Full Subsidy” beneficiaries.)

**If your “drug expenses” in the year ever exceed $4,550 in 2014, you will pay not more than $2.55 for a generic or preferred brand, and $6.35 for a non-preferred brand. (These are “Partial Subsidy” beneficiaries.)

Note on resource limits: Technically, the resource limits are $7,080 for an individual and for $10,620 a couple for “Full Subsidy” beneficiaries, and $11,800 for an individual and $23,580 for a couple for “Partial Subsidy” beneficiaries.  However, in practice, when determining resources for Extra Help, the Social Security Administration allows a burial expense allowance of $1,500 for an individual or $3,000 for a couple, so these resource limits are almost always shown as $8,580 for an individual and $13,620 for a couple for “Full Subsidy” beneficiaries, and $13,300 for an individual and $26,580 for a couple for “Partial Subsidy” beneficiaries, and these are the limits shown above.


Benchmark Premiums for 2014

This is the most that Extra Help will pay for a premium in each state.  If you choose a Part D drug plan with a monthly premium higher than this, you will have to pay all of the difference between these amounts and the premium.  (Note that, depending on a plan’s formulary and pricing structure, this might possibly be cheaper for an Extra Help beneficiary than choosing a plan whose premium is below the benchmark.)

Alabama $29.70; Alaska $37.10; Arizona $27.50; Arkansas $30.00; California $28.10; Colorado $26.90; Connecticut $28.00; Delaware $32.30; District of Columbia $32.30; Florida $22.10; Georgia $29.30; Hawaii $25.70; Idaho $39.00; Illinois $28.60; Indiana $34.90; Iowa $32.20; Kansas $34.20; Kentucky $34.90; Louisiana $31.70; Maine $27.80; Maryland $32.30; Massachusetts $28.00; Michigan $32.50; Minnesota $32.20; Mississippi $30.60; Missouri $31.20; Montana $32.20; Nebraska $32.20; Nevada $22.80; New Hampshire $27.80; New Jersey $37.10; New Mexico $19.90; New York $37.20; North Carolina $28.30; North Dakota $32.20; Ohio $28.90; Oklahoma $30.20; Oregon $34.80; Pennsylvania $35.50; Rhode Island $28.00; South Carolina $33.90; South Dakota $32.20; Tennessee $29.70; Texas $27.70; Utah $39.00; Vermont $28.00; Virginia $29.30; Washington $34.80; West Virginia $35.50; Wisconsin $37.00; Wyoming $32.20.

(Note: In 2014 a Prescription Drug Plan may voluntarily elect to waive up to $2.00 over on the premium of a “Full Subsidy” Extra Help beneficiary as long as this is done for all such beneficiaries.  This is why you may see a plan charge a $0 premium for an LIS beneficiary but it has a standard premium slightly above the LIS benchmark premiums shown above.  This is the so called “de minimis rule.”  Plans may not waive this for “Partial Subsidy” beneficiaries, that is, Extra Help beneficiaries who have to pay part of their Part D premiums.)

 

Get Ready Now for Medicare Open Enrollment - Part D Changes for 2014

 

It’s less than two weeks to Medicare Open Enrollment, so it’s time for you to get familiar with what will change in 2014 and what you need to do now to prepare for it.

Of extreme importance is that the Annual Election Period (the open enrollment period) will begin on Tuesday, October 15 and will run only until Saturday, December 7 of 2013.  So if you want to change your plan, do so in this time frame.  If you do change, it will be effective on Wednesday, January 1, 2014.

Preparing to Review Your Part D Coverage

One thing that you ought to do now to prepare for this is to make sure that to the extent possible you are on the right drugs and dosages.  So, for example, if you were planning to visit your physician to check on a condition you have, or if you are scheduled for a lab test to determine if a drug you are taking is working properly, you should be sure to do these now, so if you have to change your prescriptions in any way, you will know this before you go to determine which Part D plan is best for you in the coming year.  Or, if you are eligible for the annual wellness visit, do that now, so if anything comes up, and you are put on a new medicine, you will know what it is, and take it into account when selecting a Part D plan.

And be sure to update your personal list of drugs you take so it’s completely up-to-date.  While this list is critical in using Medicare’s plan finder to get you the best drug plan, you should always have such a list with you so you can show it to any health professional when you visit them, or if you have a medical emergency.

Part D Premiums

The actuaries at the Centers for Medicare & Medicaid Services (CMS) recently released information about some of the costs that beneficiaries will experience in Part D of the Medicare program in 2014.  This indicates that the monthly premiums for Part D plans will increase slightly in 2014.  And so if your plan’s premium does increase, and especially if it goes up significantly, you may be able to find a drug plan for 2014 that will cost about what you are now paying in premiums.  Just remember that every year you should take advantage of the annual open enrollment period to search for the best Part D deal you can get – taking into consideration not only your monthly premiums, but also deductibles, co-payments, the plan’s formulary, the restrictions it places on individual drugs in its formulary, mail order options, etc.

Discounts in the “Donut Hole”

In 2014 the discounts you will get if you go into the “donut hole” will not change for brand name drugs, but will for generic drugs.  Specifically, while the discount on brand name drugs will remain at 52.5%, that for generic drugs will increase to 28% (from 21% in 2013).  So, in effect, the donut hole will close a just a little bit more in 2014.

The 2014 Part D Benefit Structure – Some Helpful Changes from 2013

Although it’s very close to this year’s structure, the good news is that for 2014 there are slight decreases in the annual deductible, the initial coverage limit, etc., which are favorable to beneficiaries.  And, as detailed above, if you do into the donut hole, in 2014 Part D will pay a bit more for your generic drugs than in 2013.  So my guess is, even though premiums will average a tad higher than they were in 2013, most beneficiaries will be paying, for their overall Part D benefit, somewhat less in 2014 than in 2013.

In 2014 the four bands of the recommended benefit structure are as follows: (Remember, of course, that your plan’s structure, or that of any plan that you are considering, may look very close to this or not at all like it, because plans are allowed to vary from this as long as their structure is “actuarially equivalent” to it.)

Annual Deductible Band: From $0 to $310

The recommended deductible is $310, down $15 from 2013.  The beneficiary is responsible to pay all of this out-of-pocket.  Of course, many if not most plans will have a smaller or no deductible.

25% Coinsurance Band: From $310 to $2,850

After the deductible is satisfied, the next $2,540 of drug costs falls into this band.  The plan will pay 75% of the cost of a drug, and the beneficiary, 25%.  The beneficiary will remain in this band until the plan has paid a total of a $1,905 and the beneficiary, $635.

At this point, the beneficiary has spent $945 ($310 plus $635) and the plan, $1,905, for a total of $2,850.  (You may see this figure referred to as the “initial coverage limit;” it is down by $120 compared to the 2013 limit of $2,970.) The beneficiary now goes into the “donut hole.”

Donut Hole Band: From $2,850 to “Drug Expenses” of $4,550

Once in the donut hole, also known as the “coverage gap:”

For brand name drugs, the plan will pay 52.5% of the cost of a drug, and the beneficiary, 47.5%. (These figures were the same in 2013.)

For generic drugs, the government will pay 28% and the beneficiary, 72%. (In 2013 the government paid 21% and the beneficiary, 79%, so the beneficiary gets a better deal.)

The beneficiary will remain in the donut hole until their “drug expenses” total $4,550 (this is down by $200 compared to $4,750 in 2013).  That is, the beneficiary will have to incur an additional $3,605 in “drug expenses” while in the donut hole.  But by “drug expenses” we mean anything spent to meet the deductible, anything spent in the 25% band, and whatever the beneficiary spends in the donut hole, plus the 50% their plan “pays” for their brand name drugs in the donut hole – technically, the plan doesn’t “pay” this – it’s a discount given by the manufacturer.  (The extra 2.5%, which the plan actually pays, does not count, nor does the 28% which is paid by the government for generics.)

And while it will be different for each beneficiary, I estimate that in general you will actually pay somewhat over $2,000 of your own money on your Part D drugs before you get out of the donut hole and into the next band.

Catastrophic Band: From $4,750 Up

And once a beneficiary’s “drug expenses” reach $4,550, the beneficiary goes into the Catastrophic Band, where the beneficiary pays 5% of the cost of a drug, and the plan, 95%. This is sometimes called the “5% Band” for obvious reasons.  There are no upper limits to this band.

And be advised that there have been tiny changes made to the minimum amount you must pay in this Catastrophic Band.  The minimum you must pay on a generic or preferred multi-source drug is $2.55  (down a dime from 2013), and, for other drugs (typically a brand-name) is $6.35 (down a quarter from 2013).

Late Enrollment Penalty (LEP)

Some other information the actuaries released include what the monthly premium late enrollment penalty will be.  This changes each year, and generally applies to those beneficiaries who did not sign up at their first opportunity to get Part D.  (If they had “credible coverage” it does not apply, nor does it apply to those beneficiaries who get “Extra Help.”)  The penalty in 2014 will be $0.3242 for each month that you could have had Part D coverage but did not.  This is slightly higher than the current 2013 penalty of $0.3117.  These penalties are added to your plan’s monthly premium amount and are collected with your plan’s premium.

High-Income Surcharge

The number-crunchers also have calculated the so-called high “income related Medicare adjustment amounts,” also known by their acronym “IRMAA,” and which I have always called the Part D premium surcharges.  If you are subject to this, the amounts will increase modestly in 2014.  More specifically, you will be subject to this if your 2012 adjusted gross income plus your tax-free interest exceeds $170,000 for a couple filing jointly or $85,000 for an individual or a married person filing separately.  (Your adjusted gross income plus your tax-free interest is called your “Modified Adjusted Gross Income,” or MAGI.)  Be aware that the health care reform legislation de-indexed these amounts (They used to rise with inflation.), so it’s possible that if your income in 2012 was higher than in 2011, you will first be subject to this in 2014.  (And remember that if you are subject to these for Part D, you will also be subject to the much higher Part B premium surcharge, if you have Part B.  The Part B premium amounts and surcharges have not yet been announced for 2014.)

The actual amounts that will be in effect for 2014 are:

FOR COUPLES FILING JOINTLY:

If your 2012 joint income was over $170,000 and less than or equal to $214,000, your monthly surcharge is $12.10, up $0.50 from 2013.

If your 2012 joint income was over $214,000 and less than or equal to $320,000, your monthly surcharge is $31.10, up $1.20 from 2013.

If your 2012 joint income was over $320,000 and less than or equal to $428,000, your monthly surcharge is $50.20, up $1.90 from 2013.

If your 2012 joint income was over $428,000, your monthly surcharge is $69.30, up $2.70 from 2013.

(Remember that these are the rates for each beneficiary with Part D, so if you and your spouse are both enrolled in it, you each have to pay this monthly surcharge.)

FOR MARRIED PERSONS FILING SEPARATELY:

If your 2012 income was over $85,000 and less than or equal to $129,000, your monthly surcharge is $50.20, up $1.90 from 2013.

If your 2012 income was over $129,000, your monthly surcharge is $69.30, up $2.70 from 2013.

FOR INDIVIDUALS:

If your 2012 income was over $85,000 and less than or equal to $107,000, your monthly surcharge is $12.10, up $0.50 from 2013.

If your 2012 income was over $107,000 and less than or equal to $160,000, your monthly surcharge is $31.10, up $1.20 from 2013.

If your 2012 income was over $160,000 and less than or equal to $214,000, your monthly surcharge is $50.20, up $1.90 from 2013.

If your 2012 income was over $214,000, your monthly surcharge is $69.30, up $2.70 from 2013.

These surcharges are not collected by your drug plan, but by the Government, and you get them deducted from your Social Security, Railroad Retirement, or Federal Civil Service monthly payment; otherwise Medicare will bill you quarterly for them.

Enrollment Periods

Medicare beneficiaries have already been receiving their Medicare & You 2014 booklets in the mail, or electronically if they signed up for this option.  Again, this signals that the open enrollment period will soon begin, on October 15, and will end with December 7.

And, as happened last year, a 5-Star Special Enrollment Period (SEP) will open on Sunday, December 8 and will be continuously open from then and throughout 2014  This will allow a Medicare beneficiary to sign up for a 5-Star Medicare Advantage and / or a 5-Star Part D drug plan.  A beneficiary can enroll in a 5-Star Medicare Advantage and / or a 5-Star Part D drug plan whether they are in Original Medicare or are already in a Medicare Advantage and / or a Part D drug plan.  A beneficiary can enroll beginning on December 8, 2013 and any day thereafter, and their enrollment will be effective with the first day of the month following their enrollment.  Also, a beneficiary enrolled in a plan with a 5-Star overall rating may also switch to a different plan with a 5-Star overall rating.  A beneficiary can use this Special Enrollment Period only once for an enrollment effective in 2014.  Note that achieving this rating is not easy, so it may be that you won’t have a 5-Star option available to you in your area.

Warning: A beneficiary in an Medicare Advantage only plan or in a Medicare Advantage plan with Part D coverage who switches to a stand-alone Part D prescription drug plan (PDP) with a 5-Star overall rating will lose Medicare Advantage coverage and will revert to Original Medicare for basic hospital and medical coverage.

Emails from Medicare’s MyMedicare about Preventive Services

I recently received an email from Medicare with the subject “Important Message from Medicare.”  It came a couple of weeks before my birthday and was designed to remind me to get all the Medicare preventive services I am eligible for.  If you have signed up to get email from MyMedicare.gov you will no doubt also get one not too long before your birthday.
As most of us first get Medicare on our 65^th birthday, and thus are first eligible to begin getting the program’s many preventive services on that occasion, this makes sense.  This is because a number of these services, especially the annual wellness visit, may be used every twelve months, and getting a reminder about this is helpful.  But you will probably find the information in the message confusing, and possibly ignore it because of this, or even think is some sort of phishing expedition.  This is because the information in the email about the specific tests and services you are eligible to receive is in some cases correct, but in most cases, wrong.  The email will indicate not only what tests area available to you, but which month it will be available.  And this information is sometimes correct but sometimes wrong; at least in my case.  For example, it correctly showed in which months I was eligible for my annual wellness visit, my PSA test, and even my colorectal (colonoscopy) exam, but the information on many other tests was wrong.  My guess is that as time goes on Medicare will get more skilled at using their claims data base to refine these reminders.
But in the meantime, take advantage of this reminder to make sure you have all your preventive services lined up.  (And be aware that Medicare will send you this email at other times, in addition to your birthday, depending on when you might be eligible for certain preventive services.) 

If you have purchased Managing Your Medicare, go to the publisher’s website www.self-counsel.com  and use your CD to access the 2013 detailed listing of available preventive services.  [As the information is a little complicated, I actually have six lists, three for women and three for men, each divided into ages 65 and older, 50 to 64, and below 50, to simplify it.]  Otherwise I suggest that you refer to page 51 of your 2013 Medicare & You Handbook, which lists all the preventative services.  Unfortunately, it gives no details on them, so you have to flip back and forth through the adjacent write-up of Part B services to see if and when you might be eligible for each listed service.  Or you might want to go on the Medicare website and order a helpful and up-to-date publication, “Your Guide to Medicare’s Preventive Services.“  To do this, go onto www.medicare.gov, click on the “Forms, Help & Resources” tab, then on “Publications,” and then enter the title or 10110 in the search box, which will bring up this item.  Then proceed to order a copy which will be snail mailed to you.  When you get the booklet, just go through it and write down the services you are eligible for and call you doctor to line them up.

And just the usual friendly reminders about preventive services.  You need to anticipate them as it may take a while, in some cases quite a while, to get an appointment to actually get the service, so line them up as early as possible.  And get all the ones that you are eligible for, some may be uncomfortable, either the procedure itself, or perhaps even talking to your health care provider about a condition, but your health is your most valuable asset, and these services are critical to protecting it.     

Some Details on the DMEPOS Competitive Bid Program - Round 2 Implementation

Medicare has issued a series of rules surrounding its Durable Medical Equipment, Prosthetics, Orthotics and Supplies (DMEPOS) Competitive Bid Program. These include straightening out issues concerning repairs, replacements, upgrades and so forth. The main purpose of these is to spell out whether a contract supplier must be used, or if the beneficiary has a wider choice of suppliers when they live in or travel to a competitive bid area (CBA), and to clarify the transition rules as Round 2 goes into effect on Monday, July 1, 2013.

The basic rules are:

Repair: If a beneficiary owns a piece of equipment, and it needs to be repaired, Medicare will pay for the labor and parts not otherwise covered under a manufacturer’s or supplier’s warranty. And regardless of where the beneficiary resides or travels to, Medicare will pay any Medicare-enrolled supplier for the repair, even if it is made to a competitively bid item. This is helpful for those beneficiaries who have used a particular supplier, even if they did not win in the competition and whom the beneficiary is familiar with, to make repairs to their item. But read the next paragraph.

Replacement: This gets a little tricky because of Medicare’s definition of “replacement.” Basically, if a part is needed to fix an item or component of an item, it’s considered a repair part, and the rule above holds. But if a whole component of an item is replaced, it may be considered not as a “repair,” but as a “replacement.” And if the replacement is made to an item subject to the competitive bid program in a competitive bid area, it must be made by a contract supplier. And in these circumstances, Medicare will not pay anything for a replacement made by a non-contract supplier.

But it’s really difficult to tell if something is a “repair” or a “replacement.” So, for example, certain, specific items (for example, tires, batteries, and wheels) which are replaced in their entirety are considered repairs. But if a seat cushion or some back cushions on wheelchairs are changed out, these are considered “replacements.”

One way to help sort these rather arbitrary distinctions is to list the items involved in the Round 2 competitive bid program and indicate whether they can ever be eligble for “repair.”

None of the following classes of items or supplies can be considered for “repair,” but only for replacement, and a contract supplier must always be used:

Diabetic supplies by mail
Oxygen, oxygen equipment, and supplies
Enteral nutrients, equipment and supplies
Continuous positive airway pressure (CPAP) devices, respiratory assist devices (RADs), and related supplies and accessories
Negative pressure wound therapy (NPWT) pumps and related supplies and accessories

These classes of items may be eligible for repair:

Standard (power and manual) wheelchairs, scooters, and related accessories
Complex, Rehabilitative Power Wheelchairs and Related Accessories (Group 2)
Hospital beds and related accessories
Walkers and related accessories
Support surfaces (Group 2 mattresses and overlays)

A beneficiary’s should either make certain that any work on one of these items is indeed a repair, which Medicare will pay for, or only use contract suppliers, as Medicare will pay either for a repair or a replacement if performed by one of these suppliers.

Upgrades: Medicare has a rather narrow definition of “upgrade,” and it characterizes an upgrade as a piece of equipment or a component to a piece of equipment that is not medically necessary for the beneficiary. Typically, these involve a deluxe model or feature. One example Medicare gives is that if the physician orders a wheelchair with fixed leg rests and the supplier furnishes medically unnecessary swing away elevating leg rests at the request of the beneficiary, the swing-aways would be an upgrade. Medicare does not cover upgrades under any circumstances. On the other hand, if a beneficiary’s medical condition changes such that he or she needs to have their standard joystick on their power wheelchair changes to a specialty sip and puff interface, this is seen as a “replacement.” And if the beneficiary is in a competitive bidding area, and they use a contract supplier, this is covered and would be paid for by Medicare.

One important beneficiary protection regarding upgrades is that a beneficiary is not liable for the additional cost of an upgraded item or component unless the beneficiary makes an informed decision by signing an Advance Beneficiary Notice of Noncoverage (ABN) to pay out of pocket for the cost of the upgrade. The beneficiary has no financial liability whether to a contract or non-contract supplier in a competitive bid area (CBA), or for that matter, to any Medicare-enrolled supplier anywhere, for the incremental cost of upgrading, unless prior to receiving the upgraded item, the supplier obtains a signed ABN from the beneficiary.

And note that Medicare requires that where upgrades are involved with competitively bid items (in a competitive bid area, of course), that these be done only by contract suppliers for it to make payment. At first this seems contradictory as Medicare won’t pay for these upgrades themselves, but it does pay for the basic, medically necessary item. So this rule was apparently put in place both to prevent any “gaming” of the system, and it is also used to establish the Medicare approved amount of the basic item. So beneficiaries in a competitive bid area should be certain, that if they are getting an upgrade to any of the items on the competitive bid program list, that the get this from a contract supplier.

Grandfathering: This is the term Medicare uses to describe the situation where a beneficiary’s current supplier of durable medical equipment or oxygen and oxygen equipment has failed to win in the competition, but has agreed with Medicare to become “grandfathered in,” so that they can continue to rent to or supply beneficiaries where they have already placed equipment with a beneficiary. If your current supplier is NOT “grandfathered in” they must make arrangements with you to pick up their equipment, and you have to make arrangements with a contract supplier to replace it. And Medicare wants to make it extremely clear that enteral nutrition items CANNOT be grandfathered. A Medicare beneficiary must obtain related enteral accessories, nutrition, and supplies only from a contract supplier for Medicare to pay. A special transitional rule is in effect for enteral pumps and supplies.

Enteral Transitions: Medicare uses a “15 month” rule regarding enteral nutrition (“tube feeding”) pumps. If a beneficiary had rented an enteral nutrition pump for at least 15 continuous months at the time Round 2 goes into effect on July 1, 2013, the supplier that provided the item in the 15th month of the rental period is responsible for furnishing, maintaining, and servicing the enteral equipment as long as it is medically necessary. (This is true whether or not that supplier becomes a contract supplier.) If the enteral nutrition pump was rented for less than 15 continuous months at the time of the implementation of the competitive bid program on July 1, 2013, the rental of the pump must transition to a contract supplier. Basically, the former supplier, unless they have become a competitive bid supplier, must pick up the pump in July. This pick-up should occur no earlier that the anniversary date of the pump, which is the date of the month on which the item was first delivered to the beneficiary. For example, if the equipment was first rented on October 15, 2012, the anniversary for pick-up would be July15, 2013, and the equipment in this example should not be picked up before July 15, 2013.

However, beginning July 1, 2013, the beneficiary living in or traveling to a competitive bid area must obtain all related enteral accessories, nutrients, and supplies from a contract supplier only.


If more information is needed on any of these topics, note that Medicare issued a series of helpful fact sheets in March of this year. Search www.cms.gov for “Billing Procedures for Upgrades 900983,” “Repairs and Replacements 905283,” or “Enteral Nutrition 901005,” for these.

Beneficiary Rights and Protections Regarding Durable Medical Equipment (DME)

One of the positive side-effects of the DMEPOS (durable medical equipment, prosthetics, orthotics and supplies) Competitive Bidding Program is that the Centers for Medicare & Medicaid Services (CMS) is using it as an opportunity to broadcast the message to ALL beneficiaries who use DME, no matter where they live, or no matter what equipment or supplies they use, that beneficiaries have clear-cut protections and rights concerning how they are to be supplied, treated, educated, supported, and kept safe regarding any piece of equipment, orthotic, prosthetic or supply Medicare covers and which is provided by a Medicare supplier.

More specifically, beneficiary protections and safeguards involving equipment and supplies include:

1. Beneficiaries must be treated with respect and their privacy assured.

2. Beneficiaries must be given suitable information about the set-up, safe and correct use, troubleshooting, cleaning and maintenance of their equipment.

3. Beneficiaries must be provided this information in accord with their abilities, learning preferences and language.

4. Beneficiaries must be instructed in effective infection control techniques appropriate to their equipment and supplies; this is critical for the health of the beneficiary.

5. Beneficiaries must be given, when needed, appropriate, knowledgeable, and professional assistance (including a home visit, if required) by the supplier, for example, if the equipment does not appear to be working properly, or having the desired result, or the beneficiary needs additional guidance in operating the equipment, or whenever it needs repair or maintenance.

6. Beneficiaries must be given a customer service phone number which is available both during and after regular business hours.

In addition, for certain types of equipment, such as respiratory equipment, power mobility devices (such as power wheelchairs), complex rehabilitative wheelchairs and assistive technology, additional safeguards and standards are in place.

For a more detailed statement of these rights and protections, go to www.cms.gov, search for “Supplier Quality Standards and Beneficiary Protections,” and click on the March 2013 document.

If the beneficiary believes, after contacting the suppler, that the supplier is not reasonable supportive of their rights and protections as enumerated above, they should call 1-800-Medicare and complain. Alternatively, beneficiaries may call their State Health Insurance Counseling Program (or SHIP, their number is on the back of the Medicare & You booklet) and ask for assistance. It may be that the SHIP will have to ask for a CMS Regional Office to intervene.

All Original Medicare Beneficiaries Are Actually or Potentially Affected by New Durable Medical Equipment and Supply Rules Effective July 1, 2013

Medicare is expanding its competitive bidding program for durable medical equipment (DME) and allied supplies. This program is formally called the Medicare’s Competitive Bidding Program for durable medical equipment, prosthetics, orthotics, and supplies (DMEPOS). This expansion is called “Round 2” because the first round went into effect on January 1, 2011, and has been deemed a success in that it significantly lowered prices paid on these items and supplies. This competitive bidding program requires suppliers in a particular area to go through a bidding process to establish the prices that Medicare pays for certain durable medical equipment items and supplies rather than establishing the prices by the general method of using a fee schedule set by the Medicare program. And only those who successfully bid may be paid by Medicare. The entire issue of using competition or direct federal negotiation rather than the current regulatory processes to lower health care costs for Medicare beneficiaries is a controversial and rather politicized issue, but we will undoubtedly see more of it in the future.

Basically, beginning on July 1, 2013, anytime you rent or purchase an item or supply on the list of items and supplies involved in this program while you reside in or visit the areas mentioned, you will have to get it from a supplier which has a contract with Medicare under the Competitive Bidding Program. If you do not, Medicare will not pay anything. As with any Medicare activity, exceptions to this rule can apply, and these are discussed below. And it’s worth repeating, the place where you get the item or supply governs, so even if you travel to one of these areas and get an item or supply on the list there, you must use a contract supplier for Medicare to pay anything.

And, interestingly, the price you pay for an item or supply will depend on where you reside. Your residence is determined by what address is in the records of the Social Security Administration; you can contact it (1-800-772-1213) if you address is out-of-date or incorrect.

To simplify this as much as possible, I am dividing this into four audiences, but remember that all of this applies only to beneficiaries in Original (fee-for-service) Medicare. (Those of you in Medicare Advantage need to carefully check with your Plan before you purchase or rent any durable medical equipment or supplies and follow your Plan’s instructions, which you should do whenever you are in Medicare Advantage no matter what medical service, item or supply you use.)


Mail Order Diabetic Supplies

The first audience is everyone in Original (fee-for-service) Medicare no matter where you live. Effective with July 1, 2013, if you order your diabetic supplies by mail, and these include test strips for home glucose monitors and lancets, only certain mail order suppliers will be approved by Medicare. So use only these. And if you don’t want your diabetic testing supplies delivered to your home, you can go to any local store that’s enrolled with Medicare and buy them there. The amount Medicare pays will be the same for diabetic testing supplies you buy at the store or have delivered to your home. Local stores also can’t charge more than any unmet deductible and 20% coinsurance if they accept assignment, which means they accept the Medicare-approved amount as payment in full. Local stores that don’t accept Medicare assignment may charge you more than 20% coinsurance and any unmet deductible. If you get your supplies from a local store, check with the store to find out what your payment will be.


New Areas and Items (Round 2)

Second, if you live in or travel to any state except Alaska, Maine, Montana, the Dakotas, Vermont and Wyoming, at least part of your state will be coming into this program effective with July 1, 2013. You need to look at the list of metropolitan statistical areas (MSAs) which will be coming into this program on that date (It’s a long list, and it’s at the very end of this post.) to see if you are affected. You can also call 1-800-MEDICARE and ask if your home’s ZIP code, or the ZIP code you have traveled to, is in any of these areas. Alternatively, you can go onto www.medicare.gov/supplier and enter your ZIP code.

The following categories of items and supplies are the ones which will be included in the new Round 2. Items and supplies not on this list may be obtained from any Medicare approved supplier (except, of course, diabetic supplies by mail).

Oxygen, oxygen equipment, and supplies
Standard (power and manual) wheelchairs, scooters, and related accessories
Enteral nutrients, equipment and supplies
Continuous positive airway pressure (CPAP) devices, respiratory assist devices (RADs), and related supplies and accessories
Hospital beds and related accessories
Walkers and related accessories
Negative pressure wound therapy (NPWT) pumps and related supplies and accessories
Support surfaces (Group 2 mattresses and overlays)


Areas Already in the Competitive Bidding Program (Round 1)

And if you live in or travel to one of these eleven states California, Florida, Indiana, Kansas, Kentucky, Missouri, North Carolina, Ohio, Pennsylvania, South Carolina, or Texas – you may already be in a competitive bidding area. Specifically, this third audience is those of you who live in or travel to any of the metropolitan statistical areas (MSAs) listed below, all of which were in Round 1:

Cincinnati-Middletown, OH-KY-IN
Cleveland-Elyria-Mentor, OH
Charlotte-Gastonia-Concord, NC-SC
Dallas-Fort Worth-Arlington, TX
Kansas City, MO-KS
Miami-Fort Lauderdale-Pompano Beach, FL
Orlando-Kissimme, FL
Pittsburgh, PA
Riverside-San Bernardino-Ontario, CA

A new round of bidding will take place in these areas, and it will go into effect on July 1, 2014. It will use the list of items and supplies currently in effect for your area, with some modifications. This revised Round 1 list of items and supplies is shown below.

Oxygen, oxygen equipment, and supplies
Standard power wheelchairs, scooters, and related accessories
Complex rehabilitative power wheelchairs and related accessories (Group 2 only)
Enteral nutrients, equipment and supplies
Continuous positive airway pressure (CPAP) devices, respiratory assist devices (RADs), and related supplies and accessories
Hospital beds and related accessories
Walkers and related accessories
Support surfaces (Group 2 mattresses and overlays in the Miami–Fort Lauderdale–Pompano Beach, FL area only)

(For the Round 1 recompete both negative pressure wound therapy (NPWT) items and services as well as Group 3 complex rehabilitative power wheel chairs have been deleted from the list used in the original Round 1 bid. As had mail order diabetic supplies as of January 1, 2013, but these will be subject to the program no matter where you live effective with July 1, 2013.)

For those of you who are already renting an item of DME or using supplies in these areas, it is possible that your current supplier may not win this new round of competition. If so, your supplier will have to inform you of this. And it may be that the price for an item or supply you are using may change because of the rebid.

Puerto Rico

The fourth audience is those Medicare beneficiaries who live in or travel to Puerto Rico, which was also in the Round 1 competition. Your list of items subject to the program will not change, nor will there be any recompete in your area, so the suppliers which are currently in the program will not change, nor will the Medicare prices established by the bidding process. Of course, you will be included in the national mail order diabetic supplies program as of July 1, 2013. But if you begin to buy or rent any of these items, or use any of these supplies, you should use only a contract supplier.

To recap, these are the items covered by the competitive bid program in Puerto Rico:
Oxygen, oxygen equipment, and supplies
Standard power wheelchairs, scooters, and related accessories
Complex rehabilitative power wheelchairs and related accessories (Groups 2 & 3)
Enteral nutrients, equipment and supplies
Continuous positive airway pressure (CPAP) devices, respiratory assist devices (RADs), and related supplies and accessories
Hospital beds and related accessories
Walkers and related accessories
Negative pressure wound therapy (NPWT) items and services


Exeptions:

We mentioned above that there are exceptions to the rule that only contract suppliers can be paid by Medicare. Here is a recap of those exceptions.

Currently rented equipment If you’re currently renting durable medical equipment or oxygen and oxygen equipment, and your current supplier doesn’t bid successfully, you may be able to continue renting your equipment from that supplier if they decide to become a “grandfathered” supplier. Your supplier should already have notified you in writing if they’ll continue to rent you the equipment. If your supplier decides not to become a grandfathered supplier, they’ll notify you in writing to make arrangements to pick up the equipment. You should contact a contract supplier for new equipment.

If you continue to use a non-contract supplier that isn’t a grandfathered supplier for equipment or supplies that are part of the competitive bidding program, the supplier must give you an “Advance Beneficiary Notice” (ABN). This notice tells you that Medicare usually won’t pay for the item or service, and you may be responsible for paying the entire cost. If you don’t switch to a contract supplier, you will be responsible for the full cost of the item or/or supplies.

Repairs to already owned equipment If you already own medical equipment, you can use any Medicare-approved supplier for repairs. Before your equipment is serviced, make sure the supplier is Medicare-approved so the service may be covered. If your equipment needs to be replaced and it is one of the items subject to competitive bidding, you must use a Medicare contract supplier for Medicare to pay.

Certain walkers and wheelchairs furnished by certain practitioners and hospitals Medicare will pay for certain items, like a walker or folding manual wheelchair, furnished by your doctor or treating health care provider (including physician assistants, clinical nurse specialists, and nurse practitioners), even if he or she isn’t a Medicare contract supplier, as long as the item is supplied in the office during a visit for medical care and is medically necessary. If you’re hospitalized and need a walker or folding manual wheelchair, Medicare will also pay for these items furnished by the hospital while you’re admitted or on the day you’re discharged from the hospital. This does not apply to a skilled nursing facility or nursing home which supplies you with one of these items unless it is a contract supplier.

A specific brand or item is required by medical necessity If you need a specific brand of equipment or supplies, or you need an item in a specific form, your doctor must prescribe the specific brand or form in writing. Your doctor must also document in your medical record that you need this specific item or supply for medical reasons. In these situations, a Medicare contract supplier is required to furnish the exact brand or form of item you need, or help you find another contract supplier that offers that brand or form, or work with your doctor to find an alternate brand or form that’s safe and effective for you. But in these cases you must always use a contract supplier, even though the one you were originally referred to may not be able to obtain the specific item or supply for you.

Your primary insurance makes you use a supplier not in the bid program If your primary medical insurance requires you to use a supplier that doesn’t participate in the program, Medicare may make a secondary payment to that supplier. The supplier must meet Medicare enrollment standards and be eligible to get secondary payments. For more information, check with your benefits administrator, insurer, or plan provider.


Round 2 Areas

This is the list of all metropolitan statistical areas (MSAs) which are in Round 2; it is divided by area of the country: West, Midwest, South and Northeast:

West
Albuquerque, NM
Bakersfield - Delano, CA
Boise City-Nampa, ID
Colorado Springs, CO
Denver-Aurora-Broomfield, CO
Fresno, CA
Honolulu, HI
Las Vegas-Paradise, NV
Los Angeles-Long Beach-Santa Ana, CA
Oxnard-Thousand Oaks-Ventura, CA
Phoenix-Mesa-Glendale, AZ
Portland-Vancouver-Hillsboro, OR-WA
Sacramento-Arden-Arcade-Roseville, CA
Salt Lake City, UT
San Diego-Carlsbad-San Marcos, CA
San Francisco-Oakland-Fremont, CA
San Jose-Sunnyvale-Santa Clara, CA
Seattle-Tacoma-Bellevue, WA
Stockton, CA
Tucson, AZ
Visalia-Porterville, CA

Midwest
Akron, OH
Chicago-Joliet -Naperville, IL-IN-WI
Columbus, OH
Dayton, OH
Detroit-Warren-Livonia, MI
Flint, MI
Grand Rapids-Wyoming, MI
Huntington-Ashland, WV-KY-OH
Indianapolis-Carmel, IN
Milwaukee-Waukesha-West Allis, WI
Minneapolis-St. Paul-Bloomington, MN-WI
Omaha-Council Bluffs, NE-IA
St. Louis, MO-IL
Toledo, OH
Wichita, KS
Youngstown-Warren-Boardman, OH-PA

South
Asheville, NC
Atlanta-Sandy Springs-Marietta, GA
Augusta-Richmond County, GA-SC
Austin-Round Rock-San Marcos, TX
Baltimore-Towson, MD
Baton Rouge, LA
Beaumont-Port Arthur, TX
Birmingham-Hoover, AL
Cape Coral-Fort Myers, FL
Charleston-North Charleston-Summerville, SC
Chattanooga, TN-GA
Columbia, SC
Deltona-Daytona Beach-Ormond Beach, FL
El Paso, TX
Greensboro-High Point, NC
Greenville-Mauldin-Easley, SC
Houston-Sugar Land-Baytown, TX
Jackson, MS
Jacksonville, FL
Knoxville, TN
Lakeland-Winter Haven, FL
Little Rock-North Little Rock-Conway, AR
Louisville/Jefferson County, KY-IN
McAllen-Edinburg-Mission, TX
Memphis, TN-MS-AR
Nashville-Davidson-Murfreesboro-Franklin, TN
New Orleans-Metairie-Kenner, LA
Northport-Bradenton-Sarasota, FL
Ocala, FL
Oklahoma City, OK
Palm Bay-Melbourne-Titusville, FL
Raleigh-Cary, NC
Richmond, VA
San Antonio-New Braunfels, TX
Tampa-St. Petersburg-Clearwater, FL
Tulsa, OK
Virginia Beach-Norfolk-Newport News, VA-NC
Washington-Arlington-Alexandria, DC-VA-MD-WV

Northeast
Albany-Schenectady-Troy, NY
Allentown-Bethlehem-Easton, PA-NJ
Boston-Cambridge-Quincy, MA-NH
Bridgeport-Stamford-Norwalk, CT
Buffalo-Niagara Falls, NY
Hartford-West Hartford-East Hartford, CT
New Haven-Milford, CT
New York-Northern New Jersey-Long Island, NY-NJ-PA
Philadelphia-Camden-Wilmington, PA-NJ-DE-MD
Poughkeepsie-Newburgh-Middletown, NY
Providence-New Bedford-Fall River, RI-MA
Rochester, NY
Scranton-Wilkes-Barre, PA
Springfield, MA
Syracuse, NY
Worcester, MA

This information should help Medicare counselors advise Medicare beneficiaries who qualify for full dual Medicare-Medicaid eligibility or for QMB status as to what their options are. Counselors should also keep in mind the Affordable Care Act (ACA) provision, effective January 1, 2013, that requires Medicaid programs to pay the Medicare rate for many primary care services rendered by family physicians, internists and pediatricians in 2013 and 2014. This provision overrides the information provided in the “Pay 100% of Cost Sharing?” columns.

2012 Dual Eligible (D/E) and Qualified Medicare Beneficiary (QMB) Information by State

Which State Medicaid Programs Pay Physicians 100% of a D/E or QMB’s Cost Sharing?

Which State Medicaid Programs Will Pay a D/E or QMB’s Medicare Advantage Premium?

(Note: The cost sharing data is summarized from the MACPAC’s March 2013 “Report to the Congress on Medicaid and CHIP,” which can be accessed at http://www.macpac.gov/reports, while the oremium data comes from the Kaiser Commission on Medicaid and the Uninsured’s October 2012 report “Medicaid Today; Preparing for Tomorrow – A Look at State Medicaid Program Spending, Enrollment and Policy Trends,” which can be found on the Kaiser Family Foundation website www.kff.org.)

                                     Pay              Pay                                    Pay                Pay
                                     100%         Medicare                           100%          Medicare
                                    of Cost    Advantage                        of Cost      Advantage
   State                       Sharing?   Premium?         State        Sharing?      Premium?   

Alabama                      Never     Varies         Montana               Never  Unknown

Alaska                         Never       No              Nebraska              Always     Yes

Arizona                     Never    Unknown       Nevada                   Never       No

Arkansas                    Always    No               New Hampshire     Never      No

California                    Never       No               New Jersey            Never       No

Colorado                     Never      No               New Mexico           Never       No

Connecticut               Never  Unknown        New York                Unique   Yes

Delaware                     Never     No                North Carolina       Never      Yes

District of Columbia  Never     No                North Dakota         Never       No

Florida                        Never  Varies               Ohio                        Never       No

Georgia                       Never   Yes                 Oklahoma              Always      No

Hawaii                        Always   No                Oregon                    Never      No

Idaho                           Never   Yes                 Pennsylvania         Never      No

Illinois                       Never Unknown          Rhode Island          Never     No

Indiana                       Never    No                 South Carolina       Never     Yes

Iowa                          Always   No                 South Dakota       Always     Yes

Kansas                       Never    No                  Tennessee             Never      Yes

Kentucky                   Never    No                  Texas                     Never      Yes

Louisiana                   Never    No                  Utah                       Never       No

Maine                        Always No                  Vermont              Always      No

Maryland                   Never   No                  Virginia                 Never       No

Massachusetts         Never   No                  Washington        Never        No

Michigan                   Never   No                  West Virginia      Never       No

Minnesota              Never Unknown            Wisconsin           Never       No

Mississippi            Always    No                   Wyoming           Always      No

Missouri                Always     No

This information should help Medicare counselors advise Medicare beneficiaries who qualify for full dual Medicare-Medicaid eligibility or for QMB status as to what their options are.  Counselors should also keep in mind the Affordable Care Act (ACA) provision, effective January 1, 2013, that requires Medicaid programs to pay the Medicare rate for many primary care services rendered by family physicians, internists and pediatricians in 2013 and 2014.  This provision overrides the information provided in the “Pay 100% of Cost Sharing?” columns.

Preview of Medicare Part C and Part D for 2014

The actuaries at the Centers for Medicare & Medicaid Services (CMS) must have been burning their midnight oil, because they have already laid the foundation for Medicare Advantage (managed care) plans and Part D prescription drug plans for 2014. The good news for beneficiaries is that it looks like they have taken action to control increases in premiums for Medicare Advantage plans, and beneficiaries in Part D will see a lower deductibles and co-payments for drugs.


Part of the reason for this is in 2014 Part C and Part D plans will have to adhere to the Affordable Care Act provision to maintain a medical loss ratio of 85%, that is, they must spend 85% of revenue on clinical services, prescription drugs, quality improvements, etc.

And Part D will also improve for those beneficiaries who fall into the donut hole, as not only will manufacturers have to discount brand name drugs by 52.5%, as they do in 2013, but the program will discount generic drugs by 28%, up from the 21% in effect this year.

As 2014 is a long way off, there is no use to going into great detail about this at this point in time, and we will know more particulars as the year progresses and plans submit their specific offerings to CMS. But one interesting trend is that there will be more emphasis on quality of care. For one, Medicare will be refining its Part D Medication Therapy Management (MTM) program and tying it into the Million Hearts initiative to improve access and adherence to anti-hypertensive medications. It will also encourage beneficiaries to tie their medication reviews into their annual wellness visits to their physicians. And, interestingly, the Part D program has been in place for a long enough time that it is producing data on how Medicare beneficiaries are medicated. For example, it now has data on the use of anti-psychotic medications in the long-term care setting, and will begin using this to deal with the longstanding quality of care issue of the overuse of these drugs in this setting.

So stay tuned, and as we approach the annual enrollment period in the Fall (it always starts October 15), I’ll blog more about what beneficiaries should be looking for and what action they should take to ensure they are in the best plans for their circumstances in 2014.

Medicare Part D - Point of Service Denial Notice

Beginning April 1, the Centers for Medicare & Medicaid Services (CMS) will begin enforcing a requirement in Part D that a beneficiary who goes to one of their plan’s network pharmacies and whose prescription is denied at the point-of_service (POS), which usually means at the pharmacy window, will get a written notice about the denial. This notice is titled “MEDICARE PRESCRIPTION DRUG COVERAGE AND YOUR RIGHTS” and is Form No. CMS-10147.

The notice tells you only that your drug is not covered, and gives you some instructions on how to proceed. Basically, you’ll need to call your prescription drug plan and ask why the drug in question was not covered. You Plan then has to give you a coverage determination (a formal denial and the reason for the denial). If you or your doctor still thinks you should get the drug, you can make an exception request. The instructions in the notice will give you some details on this, and it’s also spelled out beginning on page 206 of Managing Your Medicare. Too, your doctor’s office probably has some experience with these (you almost certainly will have to get them involved), and you can also call your State Health Insurance Assistance Program (SHIP). Their number is on the back of your Medicare & You booklet; they are often quite skilled at dealing with drug denials.

You should note that you will not always get this notice. For example, if you were prescribed an over-the counter (OTC) drug (these are not covered by Part D), or if it isn’t yet time to refill your prescription, you will not get this formal notice.

Temporary Increase in Mail Order Diabetic Supply Prices for Certain Medicare Beneficiaries

In researching the big change which will affect many, many Medicare beneficiaries who use any kind of durable medical equipment and/or supply effective with July 1, 2013, and any beneficiary who uses mail order diabetic supplies from then forward, I learned that beginning January 1, 2013 that some beneficiaries may see an increase in the price of their mail order diabetic supplies.

This is because Medicare currently has a ”competitive bidding program” for certain items of durable medical equipment and supplies in effect in several areas of the country. (See my posting of October 1, 2010 for full details.) Mail order diabetic supplies were included in this program, but only until the end of December 2012. They will not be included beginning January 1, and this will be true until the expansion of this program goes into effect on July 1, 2013. (As of that date, no matter where you live, beneficiaries in Original Medicare will have to get their mail order diabetic supplies from certain suppliers.) But in the meantime beneficiaries who were covered by the program will likely see an increase in their diabetic supply costs, at least until July 1. The best advice is for you is to shop around to see if you can find a cheaper supplier in the interim.

You should also recall that Medicare has restrictions to protect you from unsolicited telephone calls from suppliers. If you believe a supplier is unduly pressuring you or has pressured you to switch suppliers, call 1-800-MEDICARE (1-800-633-4227).

2013 Income and Resource Levels for the Medicare Savings Programs

Medicare Savings Programs, sometimes abbreviated as “MSP,” are discussed in full beginning on page 16 of Managing Your Medicare. Remember that you apply for the Medicare Savings Programs with your state’s Medicaid program, and that states’ exceptions and disregards for the income limits given below, not to speak of their differing interpretations and waivers as to what does or doesn’t count as income, means that if you are anywhere near the limits shown below, you should always apply. (The income limits are somewhat higher than these in both Alaska and Hawaii.)

The resource limits are also shown (these are the same for all states), but again, states have differing interpretations as what counts or doesn’t count as a resource, and some states impose NO resource limit. Note that the resource limits shown below do NOT include the burial allowance of $1,500 (individual) or $3,000 (couple), but are often shown with these added in.

For the Qualified Medicare Beneficiary (QMB) program (which pays your Part B monthly premium, your Part A and Part B deductibles and your Part B coinsurances), your income must be at or below 100 percent of the federal poverty level, which is now:

For an individual, $11,490 annually, or $958 monthly.
For a couple, $15,510 annually, or $1,293 monthly.
For each additional person in a family, add $4,020 annually, or $335 monthly.

The resource limits are $7,080 for an individual and $10,620 for a couple.


For the Specified Low-Income Medicare Beneficiary (SLMB) program (which pays your Part B monthly premium), your income must be at or below 120 percent of the federal poverty level, which is now:

For an individual, $13,788 annually, or $1,149 monthly.
For a couple, $18,612 annually, or $1,551 monthly.
For each additional person in a family, add $4,824 annually, or $402 monthly.

The resource limits are $7,080 for an individual and $10,620 for a couple.


For the Qualifying Individual (QI) program (which pays your Part B monthly premium), your income must be at or below 135 percent of the federal poverty level, which is now:

For an individual, $15,512 annually, or $1,293 monthly.
For a couple, $20,939 annually, or $1,745 monthly.
For each additional person in a family, add $5,427 annually, or $452 monthly.

The resource limits are $7,080 for an individual and $10,620 for a couple.


For the Qualified Disabled & Working Individuals (QDWI) program (which pays your Part A monthly premium), your income must be at or below 200 percent of the federal poverty level, which is now:

For an individual, $22,980 annually, or $1,915 monthly.
For a couple, $31,020 annually, or $2,585 monthly.
For each additional person in a family, add $8,040 annually, or $670 monthly.

The resource limits are $4,000 for an individual and $6,000 for a couple.

Part D EXTRA HELP for 2013

Requirements to Become Eligible for Extra Help

This reviews the two main requirements for the Part D low income subsidy (LIS), that is, “Extra Help,” for the next calendar year, 2013, and also indicates what the basic structure of the Part D benefit looks like for those who qualify for it during 2013. The two main requirements are, of course, low income and few resources. And the new resource and income limits for 2013 have just been announced.

In 2013 you can qualify for Extra Help if your income is at or below $17,235 AND your resources are at or below $13,300 for an individual; or if your income is at or below $23,265 AND your resources are at or below $26,580 for a couple. Remember that neither your home nor your car or vehicle count as resources. And it has been said a thousand times before, but bears repeating, if your income or resources are ANYWHERE near these limits, apply, because there are many, complex rules as to what counts as income and what counts as resources, and as to how these are calculated if additional people live in your household. (And note that all the income levels are higher in the states of Hawaii and Alaska than we show here.)

All this is fully explained in Chapter 7 (which begins on page 99) of Managing Your Medicare.

And to summarize before we get into the details, if you do qualify for Extra Help, it will pay all or part of your Part D monthly premium, all or part of your annual deductible, and will eliminate or reduce your co-payments on drugs. (Full payment of the premium is restricted to plan premiums which are at or below the “benchmark” premium for your state. The benchmark premiums for each state for 2013 are shown the end of this text.) The specifics are as follows:

Basic Structure of the Extra Help Benefit in 2013

Those who qualify for Extra Help at these levels will pay no premium, and will not be subject to the deductible, and the cost of their drugs will be as follows:

If you have Medicaid AND:

You live in a nursing home or are in a community-based waiver program:

You pay nothing.


Your income is at or below $11,490 (individual) or $15,510 (couple):

You pay $1.15 for a generic or preferred brand, and $3.50 for a non-preferred brand.*


Your income is above $11,490 (individual) or $15,510 (couple):

You pay $2.65 for a generic or preferred brand, and $6.60 for a non-preferred brand.*


If you don't have Medicaid but your state helps you pay your Medicare premiums (that is, you are in the “Medicare Savings Program”) OR you get supplemental security income (SSI):

You pay $2.65 for a generic or preferred brand, and $6.60 for a non-preferred brand.*


If you are not in the categories above, but you qualify for Extra Help because your income and resources levels are as shown below, the cost of your drugs will be as follows, and you will be subject to an annual deductible and monthly premium payments as follows:


If your income is below $15,512 (individual) or $20,939 (couple) and your resources are at or below $8,580 (individual) or $13,620 (couple):

You pay $2.65 for a generic or preferred brand, and $6.60 for a non-preferred brand.* You pay neither a premium nor a deductible.


If your income is below $15,521 (individual) or $20,939 (couple) and your resources are at or below $13,300 (individual) or $26,580 (couple):

You pay 15% of the cost of your drugs, plus you are subject to a $66 annual deductible.** You pay no premium.


If your income is at or below $16,086 (individual) or $21,714 (couple) and your resources are at or below $13,300 (individual) or $26,580 (couple):

You pay 15% of the cost of your drugs, plus you are subject to a $66 annual deductible, and you must pay 25% of your premium.**


If your income is below $16,661 (individual) or $22,490 (couple) and your resources are at or below $13,300 (individual) or $26,580 (couple):

You pay 15% of the cost of your drugs, plus you are subject to a $66 annual deductible, and you must pay 50% of your premium.**


If your income is below $17,235 (individual) or $23,265 (couple) and your resources are at or below $13,300 (individual) or $26,580 (couple):

You pay 15% of the cost of your drugs, plus you are subject to a $66 annual deductible, and you must pay 75% of your premium.**

*If your “drug expenses” ever exceed $4,750 in 2013, you will pay nothing for any prescription. (These are “Full Subsidy” beneficiaries.)

**If your “drug expenses” in the year ever exceed $4,750 in 2013, you will pay not more than $2.65 for a generic or preferred brand, and $6.60 for a non-preferred brand. (These are “Partial Subsidy” beneficiaries.)

Note on resource limits: Technically, the resource limits are $7,080 for an individual and for $10,620 a couple for “Full Subsidy” beneficiaries, and $11,800 for an individual and $23,580 for a couple for “Partial Subsidy” beneficiaries. However, in practice, when determining resources for Extra Help, the Social Security Administration allows a burial expense allowance of $1,500 for an individual or $3,000 for a couple, so these resource limits are almost always shown as $8,580 for an individual and $13,620 for a couple for “Full Subsidy” beneficiaries, and $13,300 for an individual and $26,580 for a couple for “Partial Subsidy” beneficiaries, and these adjusted limits are the ones shown above.

Benchmark Premiums for 2013

This is the most that Extra Help will pay for a premium in each state. If you choose a Part D drug plan with a monthly premium higher than this, you will have to pay all of the difference between these amounts and the premium. (Note that, depending on a plan’s formulary and pricing structure, this might possibly be cheaper for an Extra Help beneficiary than choosing a plan whose premium is below the benchmark.)

Alabama $33.70; Alaska $34.70; Arizona $29.40; Arkansas $34.10; California $29.90; Colorado $31.90; Connecticut $31.30; Delaware $35.00; District of Columbia $35.00; Florida $24.80; Georgia $34.20; Hawaii $33.30; Idaho $42.10; Illinois $30.90; Indiana $37.20; Iowa $34.60; Kansas $36.00; Kentucky $37.20; Louisiana $37.30; Maine $33.50; Maryland $35.00; Massachusetts $31.30; Michigan $34.20; Minnesota $34.60; Mississippi $34.60; Missouri $34.60; Montana $34.60; Nebraska $34.60; Nevada $20.30; New Hampshire $33.50; New Jersey $37.00; New Mexico $22.50; New York $43.20; North Carolina $32.00; North Dakota $34.60; Ohio $29.90; Oklahoma $32.80; Oregon $37.50; Pennsylvania $36.60; Rhode Island $31.30; South Carolina $38.70; South Dakota $34.60; Tennessee $33.70; Texas $31.80; Utah $42.10; Vermont $31.30; Virginia $30.10; Washington $37.50; West Virginia $36.60; Wisconsin $38.20; Wyoming $34.60.