How Medicare works with other insurance
A conditional payment is a payment Medicare makes for services another payer may be responsible for. Medicare makes this conditional payment so you won’t have to use your own money to pay the bill. The payment is “conditional” because it must be repaid to Medicare if you get a settlement, judgment, award, or other payment later. You’re responsible for making sure Medicare gets repaid from the settlement, judgment, award, or other payment.
What Is Medicare Part D? How Does Medicare Work?
Dozens of different drug plans are available to you wherever you live. They include stand-alone drug plans (state-wide plans and some nationally available plans), which you would use if you’re enrolled in the traditional Medicare program; and regional and local Medicare Advantage plans that combine medical and drug coverage in their benefit packages. What will I pay for my drugs? You could pay a different price for the same drug according to the phase of coverage that you’re in at any point during the year. • Deductible: If your plan has a deductible, you pay full price for your drugs until the deductible amount is met and coverage kicks in. “Full price” means the price your plan has negotiated with each drug’s manufacturer. This price may be less that you would pay retail at the pharmacy. • Initial coverage period: Your share of each prescription is either a flat copayment (for example, $20) or a percentage of the drug’s cost (for example, 25 percent). Most plans have three or four levels (known as “tiers”) of copays, rising in price from the least expensive generic drugs through “preferred” brand-name drugs to “nonpreferred” brands and finally to specialty or high-cost drugs. • Coverage gap (“doughnut hole”): In 2016 you pay 45 percent of your plan’s price for brand-name and biologic drugs in the gap and 58 percent for generics. In 2017 you pay 40 percent and 51 percent respectively. Fifty percent of the discount for brand drugs is provided by their manufacturers; the rest of the discount for brand drugs and the whole discount on generics is provided by the federal government. If your plan provides any coverage in the gap, these discounts are applied to your remaining costs. • Catastrophic level of coverage: Your share of each prescription is about no more than 5 percent of the cost of the drug. You would also pay a different price if you receive Extra Help or have additional coverage from elsewhere (such as retiree drug benefits or assistance from a state pharmacy assistance program). Why does the same plan charge different copays for different drugs? Most plans arrange their charges in “tiers.” Typically, Tier 1 is the copay for low-cost generics, Tier 2 for medium-cost “preferred” brand-name drugs, Tier 3 for higher-cost “non-preferred” brand names, and Tier 4 for very expensive or rare drugs. But some plans use more than four tiers and some use only one, charging the same percentage price for all drugs. All plans charge a percentage of the cost (typically 25 or 33 percent) for the most expensive drugs in the highest tier. Why does one plan charge a lot more for the same drug than another plan? Each plan negotiates the price of each drug with its manufacturer. If a plan gets a good discount on one brand-name drug but not on a competing drug used to treat the same condition, the plan charges a lower copay for the former (“preferred”) drug and a higher copay for the latter (non-preferred). Different plans may place the same drug in different tiers of charges varying by as much as $50 or more between tiers. Also, some plans charge a percentage of the cost of a drug, while other plans charge a flat dollar copay, which can cause enormous differences in charges among different plans. That’s why it is important to compare copays (as well as premiums and deductibles) when choosing a plan.
Medicare Basics: Hospital Insurance (Part A) and Medical Insurance (Part B)
Today Medicare Part A and Part B are called Original Medicare. Medicare Part A is also known as hospital insurance, and its beneficiaries can expect inpatient hospital stays in a semi-private room to be covered (a private room is not covered unless it is deemed medically necessary). In addition, rehabilitation and other skilled nursing services are also covered. Home health care is covered but only if it’s medically necessary, and then only on a part-time, intermittent basis; this includes physical, occupational and speech therapies when conducted by a Medicare-approved health agency. Durable medical equipment (DME) such as walkers and wheelchairs are covered, as are other medical supplies. Finally, Part A covers hospice care for terminally ill patients and includes drugs and support services for treating symptoms and relieving pain.