Medicare 101: Tips for Signing Up With Diabetes
The basics of this health insurance for seniors and how to stay on track
Everyone’s path through Medicare is different, and the road you take depends on your health care priorities. Under Medicare, you have different options to consider for how you want to receive your benefits. If you’re keen to keep seeing a beloved endocrinologist, you’ll focus on retaining access to your current providers. If you have a laundry list of prescription medications, keeping their cost down may be a top priority. So, you’ll have some work to do weighing your Medicare options. Yet the effort will pay off when you’ve secured coverage that meets your needs. Already have Medicare? Experts say that because costs and benefits can change, it’s a good idea to check each year whether your choices still work best for you.
Medicare is a federal government program that provides health coverage for Americans 65 and older as well as for younger people with certain disabilities or end-stage renal disease. Medicare provides coverage and benefits through four “parts”: A, B, C, and D.
Part A, sometimes known as hospital insurance, covers inpatient care in hospitals, skilled-nursing-facility care, hospice care, and home health care.
Part B, sometimes known as medical insurance, covers doctor visits, outpatient care, durable medical equipment (such as insulin pumps, blood glucose meters, and test strips), and some preventive services. Together, parts A and B are often known as Original Medicare. People enrolled in Original Medicare can broaden their coverage with “Medigap insurance,” also called “Medicare supplement insurance.” This is insurance approved by Medicare that can be bought on the private market.
Part C is Medicare Advantage, in which enrollees receive their Part A and Part B benefits through a Medicare-approved private plan offered by an insurance company. Enrollees can shop from a variety of plans with differing “menus” and cost-sharing for services. Part C takes the place of parts A and B for those who choose it. Most, but not all, Medicare Advantage plans include prescription drug coverage.
Part D is prescription drug coverage, which is also managed through private insurance companies.
Now you know your ABCDs. But before you sign up for benefits for the first time, it’s important to find out whether you are eligible for additional coverage (at less cost to you) outside Medicare. For example, not everyone who is 65 or older is retired. If you’re employed, or your spouse is, have a talk with your employer’s human resources or benefits department to see how your private insurance plan fits with Medicare, says Nicole Duritz, vice president for health education and outreach at AARP, an advocacy group for older persons. “Medicare is different for everybody, but there’s a pathway for everybody,” she says. Even if you are retired, your former employer may offer retiree health insurance that would complement Medicare benefits. Active-duty military personnel, veterans, and their spouses are also eligible for government health benefits. For low-income individuals, Medicaid may provide additional coverage.
People who receive Social Security benefits will automatically get a Medicare card in the mail three months before their 65th birthday. The card will show that you have parts A and B—if you don’t need Part B because you have other health coverage that meets all of your needs, follow the instructions that come with the card to remove that coverage. Most people don’t pay a premium for Part A, so there’s really no downside to keeping it.
If you don’t get Social Security payments (perhaps you’re working or have elected to maximize your benefits by waiting longer to collect them), you can sign up for Medicare by contacting Social Security online, by phone, or at a local office. You have a seven-month period for initial enrollment: the three months before the month of your 65th birthday, the month of your birthday, and the three months following that month. Coverage will start on the first day of your birthday month (if your birthday is on the first of the month, your coverage will start on the first of the previous month). After that, people have the opportunity to enroll in or change Medicare plans in the fall of each year, usually beginning in October.
Original Medicare A & B
If you enroll in Original Medicare (parts A and B), the federal government becomes your insurance company, and you have the broadest choice of health care providers. Original Medicare “enables a person to choose any doctor who participates in the Medicare program,” says Juliette Cubanski, PhD, associate director of the program on Medicare policy at the Kaiser Family Foundation. That’s most doctors, she says, so your provider options are extensive.
Part A comes automatically, but you have to opt in for Part B and pay a monthly premium. In 2013, the monthly premium for Part B was $104.90 for most people. People with higher incomes may need to pay more. In addition, Medicare requires you to pay for part of the cost of medical services, including deductibles, co-payments, and coinsurance (these are known as out-of-pocket costs). For Part B, after you’ve paid your deductible, Medicare pays its part, generally leaving you to pay 20 percent of a service’s cost (coinsurance). Part of your share may be covered by a Medigap policy (below). The annual Part B deductible for 2013 is $147. There are additional deductibles and cost-sharing requirements for Part A. Note: There is no annual limit on your out-of-pocket expenses in Original Medicare.
Part B covers some preventive services, such as diabetes screenings and diabetes self-management education services. Thanks to the Affordable Care Act, the health insurance reform law, a variety of preventive services are now offered at no cost to Medicare recipients, including medical nutrition therapy for people with diabetes, obesity screening and counseling, and annual “wellness” visits.
Part B includes coverage of durable medical equipment, such as blood glucose meters, test strips, lancets, and, in some cases, therapeutic shoes. After covering your deductible, you’ll pay 20 percent of the Medicare-approved amount for these items.
Insulin pumps, pump supplies, and the insulin used in the pumps are also covered by Part B. Coverage of vial insulin not used in a pump, syringes, insulin pens, oral diabetes drugs, and other prescription medications can be obtained through Medicare Part D. Continuous glucose monitors are not covered by Medicare (“CGMs Lack Medicare Coverage,” below).
Part D: Prescription Drug Coverage
Getting insurance to help cover prescription medication expenses is a good idea, says Duritz, not only for people with diabetes but for everyone. Even if you don’t need medications when you enroll in Medicare, consider signing up for Part D. There is a penalty for not signing up for Part D when you are first eligible (“Avoiding Penalties,” see below). Most Medicare Advantage plans include Part D drug coverage.
Medicare has a Plan Finder tool on its website (medicare.gov/find-a-plan), which can help you find drug coverage to accompany Original Medicare (Plan Finder also lists Medigap and Medicare Advantage plans). You plug in basic information about where you live and what medications you take, and the program generates a list of Part D plans in your area and how much you’d be likely to pay for your prescriptions on each plan in a given year. “For Part D options, most people have at least 20 plans to choose from,” says Cubanski, who stresses that it’s important to look at all elements of the plans’ costs, not just the premiums. Each plan structures its costs in different ways, with varying premiums, deductibles, co-payments, and coinsurance, and its own list of covered drugs, called a formulary.
Most Medicare drug plans have a coverage gap (also called a “donut hole”), but that gap is slowly closing thanks to the Affordable Care Act and will be closed by 2020. Instead of the full cost, you are responsible for paying part of prescription drug costs while inside the donut hole. In 2013, you reach the donut hole after you and your drug plan together have paid $2,970 for covered medications. Then you are responsible for paying 47.5 percent of prescription drugs and 79 percent of generics until your total out-of-pocket costs for drugs reach $4,750 and you leave the donut hole. At that point, “catastrophic” coverage kicks in, and you pay only 5 percent of drug costs for the rest of the year.
Need help selecting a Part D plan? You can call Medicare or contact your state health insurance assistance program (SHIP). SHIP counselors are “trained and are familiar with various networks,” says Duritz. “They look into all the plans and what changes are taking place so they can give good counsel to people.” Counselors also can provide information about Original Medicare, supplemental insurance, and Medicare Advantage plans. Call 1-800-MEDICARE (1-800-633-4227) to find the telephone number of the SHIP office closest to you.
Medigap: Supplemental Insurance
Medicare parts A, B, and D help pay for a lot of medical services but not everything. For example, they don’t cover eyeglasses or dental exams. Plus, your costs on Medicare are somewhat uncertain, because you can’t predict what health issues you may have. Imagine getting a bill for part of the cost of an unexpected heart surgery: That could come to thousands of dollars. Medigap plans supplement Original Medicare, filling the gaps in coverage. They increase what you pay in premiums but eliminate or lower your deductible, coinsurance, or co-payments.
You are guaranteed a Medigap policy, if you want one, during the first six months you are enrolled in Medicare. “After six months you can be denied,” says Duritz, often because of health issues. Keep in mind that if you sign up for a Medicare Advantage plan and later want to switch to Original Medicare (perhaps to have access to more doctors), you could find yourself without access to a Medigap plan. Unlike Part D and Medicare Advantage, the Medigap plans are standardized; the government has dictated what they provide. You can look over the plans on Medicare’s Plan Finder; each standard Medigap plan has a letter name, such as Plan A. All Medigap Plan As, for example, provide the same benefits, no matter which company offers them. One tip: Some insurance companies may charge more than others for the exact same Medigap plan.
Part C: Medicare Advantage
About a quarter of Medicare recipients get coverage through a Medicare Advantage plan, managed by a private insurer. A Medicare Advantage plan takes the place of parts A, B, and, in most cases, D. If you have Medicare Advantage, you generally can’t get a Medigap plan. Carrying both types of insurance isn’t allowed. The government “didn’t want people over-insuring themselves and wasting their money,” says Duritz.
Whatever is covered under Original Medicare (parts A and B) must also be covered by Medicare Advantage. Plus, most Medicare Advantage plans include a Medicare drug coverage plan. Medicare Advantage plans may offer additional benefits, such as dental coverage, but you may pay extra for them. Out-of-pocket costs, such as premiums, deductibles, coinsurance, and co-payments, vary between Original Medicare and Medicare Advantage plans, as well as among Medicare Advantage plans.
To compare the cost of plans, “look at your costs from the previous year,” says Duritz. Add up what the costs of your doctor’s appointments would be under the different plans, based on how many visits you made in the past year. Note that you’ll need to separate primary care and specialist visits as the co-pays may differ on the plans you’re comparing. Plan Finder will do much of the work on prescription costs for you, but only you know how often you go to your doctors and other health care professionals.
Which health care providers you can see is a big difference between Original Medicare and Medicare Advantage plans. Original Medicare enables you to choose any doctor who participates in the Medicare program. Medicare Advantage plans are set up to pay for services from a limited network of approved providers. That’s an important consideration for people who travel extensively or have a winter home, says Duritz, as the network is usually tied to a geographic location. “Ask your doctors if they participate in Medicare and if they participate in Medicare’s private plans,” she recommends. “For patients concerned about continuity of care, having that conversation with their doctor is an important step to take.”
CGMs Lack Medicare Coverage
Medicare does not routinely cover continuous glucose monitors (CGMs), no matter what type of plan you choose (Original Medicare, Medicare Advantage, or Medigap). CGMs are devices that take glucose measurements every few minutes. Studies show they can improve blood glucose control in some people with diabetes. The monitors can be particularly effective in preventing dangerous blood glucose lows (hypoglycemia) by sounding an alarm when glucose drops to a certain level. The devices are expensive, though, costing thousands of dollars, and require additional supplies that add to the expense.
Many private insurance companies cover CGMs, so switching to Medicare can be a harsh reality. “We thought that because the CGM was such an important part of his life, it would certainly be covered,” says Sue Berger, referring to her husband, Marc, who has hypoglycemia unawareness and has needed emergency shots of glucagon to correct severe lows in the past. He was using a CGM before enrolling in Medicare but now doesn’t because of the lack of coverage. Once he was denied a CGM by Medicare, the Bergers initiated an appeals process, which is the last resort for people hoping to get CGM coverage through Medicare.
The Medicare appeals process has five levels; it’s possible to win CGM coverage at any stage. Sue Berger says the rejection letter her husband received at the first level of appeal included instructions for filing an appeal at the next level. The third level involved getting Marc’s endocrinologist on the phone with an appeals judge to make his case. At press time the Bergers were waiting to hear whether they’d need to proceed to the fourth level of appeal. In the meantime, Sue says she is terrified: “Every day he doesn’t have [a CGM] could be a day that he could die.”
It’s important to sign up for Medicare, drug coverage, and supplemental insurance during the designated enrollment period; otherwise, you may be subject to penalties. The initial enrollment period is seven months long: the three months before the month of your 65th birthday, the month of your birthday, and the three months following your birthday month.
The longer you wait, the higher the penalties for not enrolling will be. For example, your monthly premium for Part B may go up 10 percent for each year you didn’t sign up for it after becoming eligible for coverage. The penalties will add to your premiums for as long as you hold the plan. There are exceptions for people who have employment-based coverage—for example, if you or your spouse is still working when you turn 65 and you don’t need Part B. You’ll have eight months, starting the month after your coverage ends, to sign up for Medicare coverage before penalties begin to accumulate. COBRA coverage and retiree health benefits are not considered employee-based coverage, so receiving health insurance through one of these means doesn’t extend the time you have to sign up for Medicare.
Still Have Questions?
Call 1-800-MEDICARE (1-800-633-4227) or visit medicare.gov
New Rules for Diabetes Supplies
Medicare’s National Mail-Order Program for diabetes testing supplies includes test strips, lancets, lancet devices, and control solution. The program applies only to people on Original Medicare, not Medicare Advantage. People who want to receive these supplies by mail must use a Medicare national mail-order contract supplier. Or, if you buy your supplies in person at a local store that “accepts Medicare assignment,” you can keep doing so. Your cost for supplies from either source will be the same. Plus, you should be able to keep your existing brand of meter. To find a mail-order supplier, go to medicare.gov/supplier.
Medicare selected suppliers based on what they offered to charge for diabetes supplies. These costs are lower than what Medicare used to pay, resulting in lower costs for you. The program is “an effort to let the free market work its magic,” says Juliette Cubanski, PhD, of the Kaiser Family Foundation. People can choose among mail-order companies that Medicare has selected. The suppliers are not allowed to influence you or give you an incentive to switch to a different brand of meter or testing supplies.
The American Diabetes Association is gathering information from people who receive Medicare Part B benefits and regularly use blood glucose testing supplies about their experience with the Medicare National Mail-Order Program. If this applies to you, please visit diabetes.org/medicaresurvey.