When it is time to enroll in Medicare, it can be a challenge to determine if traditional Medicare or a Medicare Advantage plan will provide “the best” coverage for a particular individual. To review from last week’s article, Traditional Medicare is administered by the federal government, and Medicare Advantage plans are administered by private insurance companies. Let’s explore some of the basic similarities and differences between these two Medicare benefit programs.
Traditional Medicare offers one standard package of benefits that is the same for all enrollees. As discussed last week, there are two parts to the package, known as Part A and Part B. Upon initial enrollment an individual is automatically enrolled in traditional Medicare Part A, and may choose whether or not to accept Part B coverage, which requires a premium. Usually the premium for Part B is deducted automatically from a Social Security recipient’s monthly benefit.
Prescription drug coverage (Part D) must be purchased separately from Parts A and B. An additional option that is available is Medigap coverage, which is supplemental insurance to cover items that Medicare does not pay; such as copays, coinsurance, and deductibles. Individuals who have insurance coverage through an employer or retirement plan may not need to consider Medigap coverage, since their secondary insurance may already pick up these costs. The cost of Part B, Part D, and Medigap premiums; as well as potential deductibles, copays, and coinsurance should all be included when considering the total cost of Traditional Medicare.
An individual must be enrolled in Medicare Parts A and B in order to choose an Advantage Plan (Part C) for their coverage instead of Traditional Medicare. Medicare Advantage plans are required to offer benefits that are at least equal to Traditional Medicare. These plans may offer additional coverage as well, for items such as vision and/or dental care, and may also include prescriptions. Monthly premiums will vary according to the company and the type of plan which is chosen. Medicare Advantage plans are offered by multiple companies, and each company may offer multiple plan options. Companies and plans are specific to geographic areas. To see available plans where you live, visit www.medicare.gov. You will have to answer questions about your zip code, current Medicare coverage, and medications.
An important difference between Traditional Medicare and an Advantage plan involves access to services. With Traditional Medicare, an individual may visit any health care provider that accepts Medicare anywhere in the U.S. for either routine or emergency care. Referrals and pre-authorization for services are NOT required. It is important to note that some physicians and other types of providers are not enrolled in Medicare. Medicare Advantage programs have a more structured approach to routine care, which often involves a specific primary care physician as a gatekeeper for a network of specialists and other providers. Referrals and pre-authorization of services may be required.
Seniors who have chronic disease conditions which periodically require hospitalization and an extended period of care afterward should take note of the following observation. Within our practice of elder law and life care planning, our staff has encountered differences in the way Traditional Medicare and Medicare Advantage plans manage the reimbursement of rehabilitation services provided in nursing homes. Following a hospitalization, seniors who require ongoing care in addition to therapy may be referred to a skilled nursing facility for these services. Traditional Medicare will pay in full for the first 20 days of this type of care, and then a copay is required for the remainder of the stay, which may potentially be up to a total of 100 days, depending on the individual’s diagnosis and response to therapy and nursing services. The nursing facilities determine when Medicare coverage should end according to Medicare guidelines and based on their direct observations.
With Medicare Advantage plans, private insurance companies keep a tighter rein on their expenses. They often only approve a certain number of days of coverage at a time, and then the nursing facility must provide a status update before the insurance company will approve or deny continuation of benefits. Due to this more intense and less personal regulation of care, individuals with Medicare Advantage plans may not receive as many days of coverage as they would have if they had Traditional Medicare.
Medicare C insurance administrators often determine that “improvement” enabled by rehabilitation services has ended. As the Jimmo v Sebelius settlement of 2013 determined, the “improvement” analysis is wrongful. Medicare eligibility for rehabilitation services up to a maximum of 100 days should be made after consideration of other factors. In previous articles we have explained this; and we are available to offer educational services about this controversial and misunderstood subject.
Both types of Medicare programs have an appeal process for unfavorable coverage determinations. The first appeal must be made by telephone within 48 hours of receiving the denial notice; however, Medicare appeals rarely succeed at this initial level. Medicare does not reimburse legal fees related to an appeal. It can take more than a year to get a final ruling from an Administrative Law Judge. A difficult choice must be made between ending rehabilitation services for which Medicare coverage has been denied, and paying privately.
The Center for Medicare Advocacy website (www.medicareadvocacy.org) contains additional information and provides guidelines for how to research and choose between Traditional Medicare and Medicare Advantage plans. The less expensive option offered by a former employer’s retirement program might not be the best choice. Medicare Advantage participants should confirm not only which doctors and hospitals will be available, but also which nursing homes may be used for rehabilitation. Last year, one local Advantage Plan severely limited rehabilitation facilities. There were no participating nursing homes in Cumberland County west of Mechanicsburg, and only one could provide Medicaid–funded, long-term care if needed after rehabilitation.
For those who may feel overwhelmed by the many details involved in Medicare decisions, the APPRISE program, administered by Cumberland County Aging and Community Services and other county Offices of Aging, has trained volunteers who can help individuals understand their options (visit www.ccpa.net or call 717-240-6110).
Dave Nesbit, Attorney and
Karen Kaslow, RN, BSN