Chapter 11: Medicare Supplement Plans & Social Security Disability

What is Medicaid?

A program established by the federal government but is administered through state agencies. Program is designed specifically for the indigent, and once eligibility has been established, the program will cover most hospital, doctor, and nursing home care.

What is the disability income that is available for low-income individuals?

Citizens who are at or below the poverty level or have limited assets may be eligible for benefits through Supplemental Security Income (SSI). Program is designed to help the aged, blind, and disabled to acquire the basic needs such as food and clothing.

Medicare Supplement Plans K and L are lower-premium plans with higher out-of-pocket costs. Some of the core benefits are different in these 2 plans as well:

Approved hospital costs for the copayments for days 61-90 in any Medicare benefit program (same as Plans A-J); Approved hospital costs for the copayments for lifetime reserve days 91-150 (same as Plans A-J); Approved hospital costs for an additional 365 days after all Medicare benefits are used (same as Plans A-J); 50% charges for the 1st 3 pints of blood in Plan K, 75% of charges for the 1st 3 pints of blood in Plan L; 50% of Part B coinsurance amount in Plan K, 75% of Part B coinsurance in Plan L; 50% of hospice cost-sharing and respite care expenses for Part A in Plan K, 75% of hospice cost-sharing and respite care expenses for Part A in Plan L.

For disability benefits under Social Security, the amount of required credits varies by age:

Before 24: can qualify with only 6 credits earned in 3 years prior; 24-31: can qualify if have credit for having worked half the time between 21 and start of disability; after 31: # of work credits varies, but at least 20 of those credits must have been earned in 10 years prior to disability.

A person must have Part A and B to purchase a Medicare Supplement policy. A monthly premium must be paid for the policy in addition to the premium for Part B. Does Medicare cover the premium for Medigap policies?

No.

Are economic conditions and level of income considerations when determining eligibility for Social Security disability benefits?

No. In fact, 2/3 of all applicants filing for Social Security Disability are denied.

What does Medigap generally cover?

Pay some or all of Medicare's deductibles and copayments.

What is SSD?

Social Security Disability. Foolish to rely solely on SSD to sustain during long period of disability. Administered through Social Security offices, it is not a Social Security program and is not paid for by Social Security taxes.

What is the proper name for the SSD and how is it paid for?

Supplemental Security Income (SSI). Paid for by general tax revenues.

In the Medicare Supplement benefit plans A-N, which plans must the core benefits found in Plan A be offered?

The core benefits found in Plan A must be offered in all the plans, and the other plans have a variety of additional benefits. Plan A must be offered by any insurer marketing Medigap plans, while the other plans are optional.

What was the purpose of OBRA?

To eliminate questionable marketing practices and to provide consumers with a degree of protection and to standardize the protection afforded.

What are some other sources of disability income?

Veterans Administration, Black Lung Disability Trust, civil services employees, union members, low-income individuals, debt insurance, or other insurance.

What is the Ticket to Work Program?

Vocational rehabilitation program that allows disabled persons to work with employment networks recognized by the SSA. Network can offer testing and consultation to help a person decide a new career path and find appropriate training. If person is in ticket program, medical review will not be requested as worker is actively seeking means to return to work.

As an incentive for rehabilitation, what has the SSA established for disabled workers?

Worker may perform duties of any occupation in any 9 months within a 5-year period without risking receipt of disability benefits. Person who refuses to enter rehabilitation program may lose benefits.

What are other eligibility benefits for Social Security disability benefits?

Worker must be under 65. At 65 they are eligible for Social Security - the 2 plans are not concurrent so a person may not receive both. If a person is on disability, benefits cease at retirement age and Social Security begins. However, benefit amount remains the same; Disability must last for at least 12 months or end in death, not a short-term benefit plan. Depends on disability being long term, permanent, or fatal; 5 month elimination period followed by a submission of application must be satisfied.

Are spouses or dependent children eligible for Social Security Disability?

Yes, worker must be currently entitled to a disability benefit rather than a retirement benefit. Spouse must have been married to work for at least one year prior to application for benefits and the natural parent of at least one of the worker's biological children.

What are the qualifications for disability benefits under Social Security?

Disabled person must have earned a certain amount of credits. A max of 4 work credits can be earned each year. Generally, an individual needs 40 credits, 20 of which have been earned in the last 10 years before the disability.

What Plans are no longer available for new purchase? (Existing purchases are not effected)

E, H, I, and J

What is the 5-step process the Social Security Administration (SSA) uses to determine eligibility for Disability benefits?

1. Is the person working? 2. How severe is the medical condition? 3. The medical condition must be on the List of Impairments (if on List, it will be approved, if not, it will go to step 4) 4. Type of work previously performed (does medical condition prevent them from performing previous occupation? If not, denied. If yes, step 5) 5. Can the person do any type of work.

In order to standardize the coverage provided under Medigap policies, the NAIC developed standard Medicare Supplement benefit plans that are identified with which letters?

A - N.

What are lifetime reserve days?

Also known as reserve days, are for when you are in the hospital for more than 90 days. Medicare will pay for 60 additional reserve days that you can only use once in your lifetime. They are not renewable once you use them.

Social Security benefits are available for retirement; survivors and disability benefits for eligible workers and beneficiaries. To become eligible, a worker must:

Be at least 62, fully insured, or become totally disabled and submit a claim.

What does Plan B cover?

Core benefits + Medicare Part A deductible

What does Plan G cover?

Core benefits, Medicare Part A deductible, skilled nursing facility coinsurance, 80% of Medicare Part B excess charges, the foreign travel benefit, and the at-home recovery benefit. Must pay for services of activities of daily living (ADL) that Medicare doesn't cover.

What does Plan D cover?

Core benefits, Medicare Part A deductible, skilled nursing facility coinsurance, Medicare Part B deductible and the foreign travel benefit, and the at-home recovery benefit.

What does Plan C cover?

Core benefits, Medicare Part A deductible, skilled nursing facility coinsurance, Medicare Part B deductible and the foreign travel benefit.

What does Plan F cover?

Core benefits, Medicare Part A deductible, skilled nursing facility coinsurance, Medicare Part B deductible, 100% of Medicare Part B excess charges, and the foreign travel benefit.

Medicare Supplement Plan A provides only the core/basic benefits. The core benefits, also known as basic benefits, cover the following deductibles and coinsurance of Medicare:

Days 1-60: deductibles & coinsurance; days 61-90: insured's share of hospital costs under Medicare Part A; After day 90: "lifetime reserve day" up to 60 days over your lifetime; all costs for each day after the lifetime reserve days; the 1st 3 pints of blood (deductible for Parts A & B); Part B coinsurance amount of 20%.

For many eligibility groups, income is calculated in relation to a percentage of the...?

Federal Poverty Level (FPL)

What eye sight is considered legally blind? Is benefit amount for blindness higher or lower than regular benefits?

If better eye cannot be corrected to better than 20/200 or the visual field is 20 degrees or less. Blindness benefits are higher.

What is the Spousal Impoverishment Rule?

If one spouse is forced into a nursing home but the other spouse is still taking care of themselves, this rule permits the stay-at-home spouse to retain a portion of the assets. Otherwise it would impoverish the well spouse in order to look after the institutionalized spouse. The rule also makes it so some assets may be transferred to the well spouse. Any assets left to the institutionalized spouse are then applied to the nursing home bill, with the balance paid by Medicaid.

What does Plan K cover?

Includes 50% of the Medicare Part A deductible and 50% of skilled nursing facility coinsurance.

What does Plan L cover?

Includes 75% of the Medicare Part A deductible and 75% of skilled nursing facility coinsurance.

What are the qualifications for Medicaid?

Individuals must meet income and other eligibility req's. Once a person is determined to qualify with low income and low assets, the person must met other qualifiers, some of which are blindness, disability, pregnancy, age (over 65), or caring for children receiving welfare benefits.

What are other nonfinancial eligibility criteria that are used in determining Medicare eligibility?

Individuals need to satisfy federal and state req's regarding residency, immigration status, and documentation of US citizenship.

When a patient is on Medicaid, what does Medicaid pay for regarding Medicare?

Medicare costs for the patient, including Medicare deductibles, Part B premium, Medicare copayments, and Part A premiums if applicable.

Where are Medigap plans administered from?

Not administered through the Social Security program like Medicare, they are sold and serviced by private insurers and HMOs.

What is substantial gainful activity and how does it impact Social Security disability benefits?

Not whether you can perform work accustomed to, but any gainful activity relating to producing an income. If a person is able to work in any capacity, they are not considered totally disabled.

What do Plans M and N cover?

Provide benefits similar to Plan D, but the co-pays and deductibles might be different.

What are Medicare Supplement plans called and what are they?

Referred to as Medigap - policies issued by private insurance companies that are designed to fill in some of the gaps in Medicare. Designed to fill in gap in coverage attributable to Medicare's deductibles, copayment req's, and benefit periods.

Once a person becomes eligible for Medicare Supplement Plans, and during the open enrollment period, coverage is offered on a guaranteed-issue basis. In these situations, an insurance company must do the following:

Sell the patient a Medicare supplement policy; cover all pre-existing conditions incurred more than 6 months from effective date of coverage; not charge more for a supplement policy because of past or present health problems.

What is OBRA?

The Omnibus Budget Reconciliation Act of 1990 in which Congress passed a law that authorized the NAIC to develop a standardized model for Medicare supplement policies. Model requires Medigap plans to meet certain req's as to participant eligibility and the benefits provided.