Health Insurance Options For Medicare Eligible Beneficiaries

2009 Updates

The Pyramid Life Insurance Company contracts with CMS, the federal agency that oversees the Medicare program to offer Medicare Advantage Private Fee-For-Service Plans. Pennsylvania Life Insurance Company contracts with CMS to offer Medicare Part D prescription drug plans. Neither Pyramid Life nor Pennsylvania Life, or their representatives are endorsed by Medicare or any government agency.H5421

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Presented By

Senior SolutionsThe information contained in this presentation was obtained from Medicare publications and is

accurate and current to the best of our knowledge. For additional details and the most current information, contact 800-MEDICARE or view www.Medicare.Gov on the Web.

Licensed insurance agents representing Pennsylvania Life Insurance Company and The Pyramid Life Insurance Company will be available with enrollment forms,

applications and information.

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What is Medicare?

• Federal health insurance for:- People 65 years of age and older- Qualified disabled people under 65 (about 9%

of total beneficiaries)- People with End Stage Renal Disease (ESRD)

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Medicare Key Dates

• Early 1990s: Standardization of Medicare Supplement (Medi-Gap) Plans A-J

• Mid 1990s: Entry of Medicare - Choice HMO’s

• 2003: Medicare Modernization Act

• 2006: Prescription Drug Plans

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Part A: Hospital Benefits

• Pays for medical care furnished by Medicare-certified hospitals, skilled nursing facilities, home health agencies and hospices

• Can enroll with no premium for Part A if you

have worked and paid Medicare taxes for 40 or more quarters (10 years)

• In 2009, a patient pays an initial deductible of $1068 at the beginning of each benefit period

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How Does Original Medicare Work?

Part A: Hospital Insurance• Typically NO premium, You pay co-pays

for uncovered benefits

• Hospital deductible $1068 (2009) for first 60 days

• Co-pays for hospital days 61-150, you pay ALL after day 150

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Original Medicare Part A (Continued)

Cost To YouFirst 60 days in hospital $1068

Days 61-90 $267 per day

Days 91-150 ( 60 Lifetime Reserve Days) $534 per day

Days 151 and after All

POTENTIAL CASH LIABILITY $37,380

FOR 150 DAYS IN HOSPITAL

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Original Medicare Part A (Continued)

COST TO YOUAfter 3 days in the hospital AND 30 days after a hospital discharge:First 20 days in skilled nursing $0Days 21-100 $135 per dayDays 101 and after All

POTENTIAL CASH LIABILITY $10,800 FOR 100 DAYS IN SKILLED NURSING

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Original Medicare Part A (Continued)

Summary Cost To YouPotential cash liability

for 150 days in hospital $37,380

Potential cash liability

for 100 days in skilled nursing $10,800TOTAL $48,180

Greater than 150 days in hospitalGreater than 120 days in skilled nursing

YOU PAY ALL EXPENSES

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How Does Medicare Work ?

Part B: Medical Insurance• 2009 standard premium $96.40 (varies by

income)

• Annual deductible $135 (2009)

• Co-insurance for uncovered benefits (20%)

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Original Medicare Part B: Physicians Benefits

• Generally pays 80% of the Medicare allowed amount less a $135 in 2009 annual deductible for:- Doctors’ services- Outpatient hospital services (including ambulance transportation and emergency room visits)- Diagnostic tests, laboratory services- Some preventive care like mammography, pap smears and prostate screening

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Original Medicare Part B: Physicians Benefits (continued)

• Outpatient therapy services (Physical Therapy, Occupational Therapy, and Speech Therapy)

• Durable medical equipment and supplies• Some home health care services for which

Part A does not pay

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Original Medicare Part B (Continued)

After $135 (2009) annual deductible,

Medicare pays 100% of approved

amounts for Medical expenses related to:• Clinical Laboratory Services

• Home Health Care to include skilled care, home health aide services

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Original Medicare Part B (Continued)

The Medicare payment for outpatient hospital treatment will be based on the outpatient procedure payment rate

• You will be responsible for coinsurance (20%)

• The Medicare payment for most outpatient Mental Health Services is 50%

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Original Medicare Part B (Continued)

COST TO YOUMedicare Part B Deductible $135 (2009)Medical Expenses 20% of approved amount, NO

LIMITHome Health Care 20% of approved amount, NO

LIMITOutpatient Hospital Rx 20% of approved amount, NO

LIMITMental Health Outpatient 50% of approved amount, NO

LIMITBlood: Will after First 3 pints of blood, 20% of approved amount for

additional pints, NO LIMIT

Doctor who DOES NOTACCEPT ASSIGNMENT 20% + 15% of approved amount

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Key Concept: Assignment

An agreement between you, your

doctor, and Medicare. You agree to

allow your doctor to request direct

payment from Medicare for covered

services, items, and supplies. Your

doctor agrees to accept assignment

from Medicare and cannot collect

more than Medicare allows.

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Assignment (Continued)

If the doctor/provider does not accept assignment:

• The doctor may charge you more than the Medicare approved amount

• For most services there is a limit the doctor can charge you

• The limiting charge is 15% over Medicare’s approved amount

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Assignment (Continued)

• The limiting charge applies only to certain services and does not apply to supplies and other items

• You may have to pay the entire charge at the time of service, and Medicare will send you a check for its share of the charge when the claim is processed

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Other Options To Supplement Original Medicare

• Medicare Supplement insurance policies (Medigap policies)

• Medicare Advantage plans (formerly Medicare + Choice Plans), which include: – HMO’s and PPO’s– Private Fee-For-Service Plans

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Medicare Supplemental Insurance Policies (Medigap Policies)

Advantages:• Covers the “gaps” in Original Medicare

plan coverage

• Sold by private insurance companies and follow state and federal laws

• May provide benefits that Original Medicare does not cover

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Medicare Supplemental Policies (Continued)

Advantages:Least restrictive of all plansNO provider networks NO prior authorization NO medical management• Guaranteed renewable• Ideal coverage for out of state “snow birds”

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Medicare Supplemental Policies (Continued)

Disadvantage:• Typically are more expensive than

Medicare Advantage Plans

• Must qualify medically in most cases

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Medigap Policies

Key ConceptAttained age versus issue age

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Attained Age

• The premium of your Medicare Supplement policy will generally increase every year you ATTAIN a new age

• In January 2006, Arizona banned Attained Age Medicare Supplements

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Issue Age

• The premium is based on the age you are when you buy the supplement

• Increases are generally based on inflation and must be submitted by the insurance company to the State of Arizona Insurance Department for approval

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Part C: Medicare Advantage Plans

• Medicare Advantage Plan members are still enrolled in the Medicare program

• The only difference is that providers’ payments come from a private insurance company rather than Medicare

• Includes HMO’s, PPO’s, PSO’s, Medicare MSA’s, PFFS

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Medicare Advantage Plans

HMO’s-Health Maintenance OrganizationsAdvantages:

• Inexpensive with lower co-pays

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HMO’s (Continued)

Disadvantages:• Most restrictive of all plans• Some Medicare HMO’s require doctors and

hospitals to belong to their HMO network and the patient may be required to get a referral to see specialists

• If you seek routine care outside the network, you will pay for the services

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HMO’s Disadvantages (Continued)

• The HMO’s can deny a request for service by your physician

• Prior authorization necessary for most services (CT scan, MRI, etc)

• If you move outside the county you have to get a new plan

• NOT designed for out of state “snow birds”

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Part C: Private Fee-For-Service (PFFS) Plan

• Freedom of choice / availability

• PFFS includes the benefits of Parts A and B, plus additional benefits

• Members are still enrolled in the Medicare Program

• Eliminates most member out-of-pocket costs under Medicare A and B

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Medicare Private Fee-For-Service Plans

Advantages:• Inexpensive with low co-pays

• You can go to any doctor who accepts plan

• No referral needed for specialists.

• X-rays, MRI, CATS and other tests

• One Physical, eye exam and hearing exam included.

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Medicare Private Fee-For-Service Plans (Continued)

Disadvantages:• Monthly premium applies in addition to the

Part B premium.

• Some co-pays and deductibles maybe required.

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Summary of 2009Changes in Medicare

• Medicare Advantage Plans

• Prescription Drug Plans (Part D)

• 2007 Medicare Part B Premium

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Important Considerations to Determine Best Plan for You!

• What is best for your neighbor may NOT be best for you

• Do you live in Arizona full time or do you travel a lot?

• What is your health status? Do you go to the doctor a lot?

• Do you have someone who helps you understand changes in Medicare?

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Why is Senior Solutions Important to you?

• Service, Service, Service

• Many times there is someone in the office available to help

• Licensed in numerous states if you move around or travel

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What Do You Do Now?

• Review your personal situation with an insurance professional as it relates to your health insurance

• Review your health insurance with an insurance professional to make sure you are on an optimal plan

• Remember, cheap insurance plans may cost you more in the long run

• You MAY be able to take advantage of new Medicare Advantage Plans, depending on your situation

• Keep an open mind and don’t be afraid to change if it will benefit you

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Medicare Part D: Prescription Drug Plans

• Available to all Medicare beneficiaries• Designed to limit your out-of-pocket

expenses associated with prescription medications

• PrescribaRx and CCRX, our Medicare Part D prescription drug plans will significantly reduce your prescription drug costs

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Part D: PrescribaRx in 2009

• Get 3-months supply of prescription drugs for two co-pays from local pharmacies or through mail order!

• Save on generic and brand name drugs• Enjoy special member benefits including

discounts on health and wellness products• Enjoy easy access to drugs at local network

pharmacies

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PrescribaRx for 2009 Enrollment

• Annual Enrollment Period runs from November 15 – December 31, 2008

• Don’t delay! This year’s Medicare prescription drug period is short.

• If you wait too long to sign up, you may miss out on an entire year of savings!