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Medicare Basics

What is Medicare?

Medicare is a federal health insurance program. In order to qualify, you must be a U.S. citizen or lawfully present in the United States. You must also:

  • Be age 65 or older, or
  • Be under age 65 with certain disabilities, or
  • Have permanent kidney failure requiring dialysis.

Medicare has four parts:

Part A hospital coverage

Most people do not pay a monthly premium for Part A. If you or your spouse worked for 10 years and paid Medicare taxes, you will not have to pay a premium.

Part A helps cover:

  • Inpatient hospital care.
  • Skilled nursing facility care.
  • Home health care.
  • Hospice care.

Your costs under Part A include:

  • Inpatient hospital deductible.
  • Inpatient hospital copays.
  • Skilled nursing copays.
  • Monthly premium, if applicable.

Part B medical coverage

Part B requires you to pay a monthly premium along with a yearly deductible before coverage begins. You are also responsible for paying part of the costs that Part B does not cover.

Part B helps cover:

  • Doctor and other health care provider services.
  • Outpatient surgery.
  • Lab and x-ray services.
  • Ambulance services.
  • Preventive services.
  • Durable medical equipment like prosthetics, wheelchairs, and hospital beds.

What costs are you responsible for under Part B?

  • Your Medicare Part B monthly premium, if applicable
  • Yearly deductible (paid before Medicare begins paying)
  • Coinsurance (percentage of the cost that Medicare does not pay)

Services that are NOT covered by Medicare include:

  • Routine hearing, dental, and vision exams.
  • Hearing aids or glasses (except for glasses after cataract surgery).
  • Emergency assistance while traveling outside the U.S.
  • Fitness club membership.
  • Long-term care (such as a nursing home).
  • Prescription drug coverage.

Part C Medicare Advantage plans

Part C is referred to as Medicare Advantage plans. Medicare Advantage plans are Medicare-approved private health plans. Medicare Advantage plans work differently from Supplement plans. They allow you to get all of your Part A Hospital, Part B Medical, and, sometimes, Part D Prescription Drug coverage combined into one plan. They can also provide you with some additional benefits and services that Original Medicare does not cover.

To join a Medicare Advantage plan, you must:

  • Be a U.S. citizen or lawfully present in the United States.
  • Be enrolled in Medicare Parts A and B.
  • Live for six months or more each year in the plan’s service area.
  • Not have permanent kidney failure (some exceptions may apply).

Medicare Advantage plans help cover:

  • All services that Parts A and B cover, except hospice care (which is covered by Medicare).
  • Additional benefits and services that Medicare does not cover, such as:
    • Routine hearing, dental, and vision exams.
    • Hearing aids or glasses (except for glasses following cataract surgery).
    • Emergency medical assistance while traveling outside the U.S.
    • Fitness club membership.

Your costs when enrolled in a Medicare Advantage plan:

  • Part A (if applicable) and Part B monthly premiums, if applicable
  • Medicare Advantage plan monthly premium, if applicable
  • Any out-of-pocket costs such as copays, deductibles, and coinsurance (these costs vary according to the plan you choose)

Medicare Advantage plans can have lower out-of-pocket costs than Original Medicare.

Two types of Medicare Advantage plans

  • Health Maintenance Organization (HMO)
    • HMO plans use a network of participating hospitals and doctors for your care.
    • You must receive services from participating hospitals and doctors, except for emergency care, out-of-area urgent care, and out-of-area kidney dialysis.
    • Make sure your current doctors are included in the plan’s provider network before joining a plan.

  • Preferred Provider Organization (PPO)
    • PPO plans offer coverage for services received both in and out of the plan’s provider network.
    • You may pay a higher coinsurance, copayment, or deductible for care received outside of the plan’s participating provider network.

Part D prescription drug coverage

Part D coverage is offered through Medicare-approved private insurance companies. You can receive Part D coverage through a prescription drug plan (PDP) or by including it in a Medicare Advantage prescription drug plan (MAPD).

Part D helps cover brand-name and generic medications. Prescription coverage varies by plan; each plan has a formulary that lists the drugs that are covered by that plan.

Your costs when enrolled in a Part D plan:

  • Your Part D plan monthly premium, if applicable
  • Any out-of-pocket costs such as copays, coinsurance, and deductibles included with the prescription drug plan that you choose
  • A late enrollment penalty (this only applies if you have a period of 63 days without Part D coverage)

Stages of prescription drug coverage

Initial Coverage Stage
You pay: The deductibles, copays, and coinsurance for your prescription drug plan, as applicable.

Costs that apply in this stage: Your out-of-pocket costs plus the costs paid by your prescription drug plan. Once these costs reach $3,750, you move to the Coverage Gap Stage.

Costs that apply to the Catastrophic Coverage Stage: Only your out-of-pocket costs.

Coverage Gap Stage
You pay: A maximum of 44 percent of the cost for generic drugs and 35 percent of the total cost of brand-name drugs (plus a portion of the dispensing fees).

Costs that apply in this stage: Your out-of-pocket costs for generic drugs. Your out-of-pocket costs plus 50 percent of the total cost for brand-name drugs.

Costs that apply to the Catastrophic Coverage Stage: The costs that apply in this stage plus your total out-of-pocket costs from the Initial Coverage Stage. Once these costs reach $5,000, you leave the Coverage Gap Stage. This applies to all prescription drug plans.

Catastrophic Coverage Stage
You pay: A reduced copay or coinsurance on all covered drugs until the end of the year.

Prescription drug coverage example

Stages Example
Initial Coverage Stage In this example, the total cost of a Tier 2 generic drug is $30.

You pay: Your plan’s deductible first (if applicable). Then you pay your plan’s Tier 1 generic drug copay of $10.
Plan pays: the remaining $20 for the same generic drug.

A total of $30 ($10 your cost plus $20 plan’s cost) is accumulated. You have $3,720 ($3,750 - $30) left in the initial coverage stage.
Coverage Gap Stage You pay: A maximum of 44% of the total cost of $30. Your cost would be $13.20.

A total of $13.20 is accumulated in the coverage gap stage. Only your costs are accrued in this stage.
Catastrophic Coverage Stage You pay: The greater of 5% or $3.35 for a generic drug or a drug treated like a generic drug and 5% or $8.35 for all other drugs.

Extra help with prescription drug costs

Centers for Medicare & Medicaid Services
The government offers extra help for Part D prescription drug costs. To see if you qualify, call 1-800-MEDICARE (1-800-633-4227), 24 hours a day, seven days a week. TTY users should call 1-877-486-2048. Or you can visit online at www.medicare.gov.

Medical Assistance (Medicaid)
To see if you qualify for medical assistance from the state (Pennsylvania), call 1-800-692-7462 Monday through Friday from 8:30 a.m. to 4:45 p.m. TTY users should call 1-800-451-5886.

To see if you qualify for medical assistance from the state of Ohio, call 1-800-324-8680 Monday through Friday from 7 a.m. to 8 p.m. and Saturday from 8 a.m. to 5 p.m.

PACE/PACENET
Pennsylvania offers help to older adults for prescription drug coverage. Call 1-800-225-7223 from 8:30 a.m. to 8 p.m., Monday through Friday, and 9 a.m. to 3 p.m. on Saturday. TTY users should call 1-800-222-9004. Or you can visit online at https://pacecares.magellanhealth.com/.

Veterans Administration (VA)
To see if you qualify for Veterans Administration benefits, visit online at www.va.gov or go to your local VA facility.

Links:
www.medicare.gov
https://pacecares.magellanhealth.com/
www.va.gov

This information is not a complete description of benefits. Contact the plan for more information. Limitations, copayments, and restrictions may apply. Benefits, premium, and/or copayments/coinsurance may change on January 1 of each year. The formulary, pharmacy network, and/or provider network may change at any time. You will receive notice when necessary. Out-of-network/non-contracted providers are under no obligation to treat UPMC for Life members, except in emergency situations. For a decision about whether we will cover an out-of-network service, we encourage you or your provider to ask us for a pre-service organization determination before you receive the service. Please call our customer service number or see your Evidence of Coverage for more information, including the cost-sharing that applies to out-of-network services. Other physicians/providers are available in the UPMC for Life network.

The UPMC for Life Medicare Advantage HMO and PPO plans are available to persons entitled to Medicare Part A and enrolled in Part B. You must continue to pay your Medicare Part B premium, reside in the service area, and not have end-stage renal disease (ESRD).

This information is available for free in other languages. Please call our customer service number at 1-877-539-3080 (TTY: 1-800-361-2629). We are available October 1 through February 14, seven days a week from 8 a.m. to 8 p.m. From February 15 through September 30, we are available Monday through Friday from 8 a.m. to 8 p.m. and Saturday from 8 a.m. to 3 p.m.

UPMC for Life has a contract with Medicare to provide HMO and PPO plans. Enrollment in UPMC for Life depends on contract renewal. UPMC for Life is a product of and operated by UPMC Health Plan Inc., UPMC Health Network Inc., and UPMC Health Benefits Inc.

The Silver&Fit program is a product of American Specialty Health Fitness, Inc., (ASH Fitness), a subsidiary of American Specialty Health Incorporated (ASH). All programs and services are not available in all areas. Silver&Fit® is a federally registered trademark of ASH and used with permission herein.

*Our hours of operation change twice a year.

You can call us:

October 1 through February 14:
seven days a week from 8 a.m. to 8 p.m.

February 15 through September 30:
Monday through Friday: 8 a.m. to 8 p.m.
Saturday: 8 a.m. to 3 p.m.

Y0069_18_1122 Approved

Last Updated: 10/01/2017
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