Frederick McNulty, Finestra: Hey everyone. Welcome back to the channel. My name's Frederick McNulty, Director of Content at Finestra. In this series, we're taking a look at the most common questions about health care in the United States. And we're talking to experts who can answer these questions.
Amethyst Storey: Hi, I'm Amethyst Storey. I'm a certified professional biller through the AAPC. I have 19 years of experience in health care and 16 years of experience in medical billing.
FM: Whether you're reading the newspaper or trying to determine what comes next for you in terms of healthcare, Medicare and Medicaid come up quite a bit, but a lot of people don't know the difference. Don't know what they do, and don't know what plan would be right for them. So today we're gonna dive into what is Medicare and what is Medicaid.
Medicare - it's all over the news. People talk about it. What exactly is Medicare?
AS: Medicare is health insurance for adults that are 65 years of age and older. It's also for some adults with disabilities. And for those people that have end stage renal disease, which is kidney disease, that can't be corrected. Also Medicare ID numbers used to be your social security number with a letter on the end. In recent years, they've since changed that for your personal security so that your identity doesn't get stolen. It's now a bunch of random numbers and letters so that your identity can't be stolen.
FM: Could you tell me a little bit about why Medicare was created in the first place?
AS: Medicare was created in 1965 by the Social Security Administration to serve the elderly population who they found to be very underserved and financially couldn't afford the other kind of health insurances that were out there. It's since been recreated to include certain adults with disabilities, as well as people with end stage kidney disease.
FM: So that covers really what Medicare is. I think a lot of times when people discuss these topics, it gets grouped together with Medicaid; Medicare and Medicaid. What is Medicaid?
AS: Medicaid is a federal and state funded program to help people that are under a certain income limit are a citizen of the state that they live in and meet other eligibility requirements. Oftentimes Medicaid is discussed with Medicare because Medicaid can be a secondary insurance to Medicare - if you qualify - which means it would cover the 20% co-insurance and the deductible that generally comes with Medicare. There is a thing called a Qualified Medicare Beneficiary or, or QMB. This means that your premiums for Medicare, your deductible, and also your co-insurances would be covered. And the providers that you see are not able to charge you for anything related to that.
FM: So why was Medicaid created in the first place?
AS: Medicaid was created for people that couldn't afford their Medicare premiums or couldn't afford commercial insurance coverage. They don't make enough to get traditional health insurance, so it was put in place so that those people under the poverty level could have health insurance as well and get the care that they need.
FM: It's my sense that a lot of people confuse Medicare and Medicaid. And I know that in speaking I've sometimes said one, when I meant the other in short, what is the difference between Medicare and Medicaid?
AS: Medicare is a health insurance plan that you automatically qualify for once you hit the age of 65; it's actually three months previous to you turning 65, or when you have a qualified disability or end stage renal disease. There are premiums involved with it. You do have a small deductible and you do have a 20% co-Insurance. Medicaid - you qualify for if you are at or below the federal poverty level, and you don't have any kind of patient cost share because you meet those qualifications to get the assistance.
FM: My understanding with Medicare is that there are several different parts depending on a patient's needs. Is that true? And what are the parts?
AS: That is true. Medicare has four parts. The first of which is Part A, which covers your inpatient hospital services, your skilled nursing facility and rehabilitation services, and hospice should the need arise. There are no premiums or co-insurances for this service.
Part B is what covers your outpatient hospital services, your doctor's visits, your preventative care - anything that is not an inpatient service is covered by Part B. With this, you have monthly premiums, you have a yearly deductible. You have a 20% co-insurance unless you have a Medicare supplement plan, which we will get into later.
Part C replaces, traditional Medicare. It's actually your Medicare advantage plans. The point of these plans is that they have all-inclusive services that include dental vision hearing, and other things that your traditional Medicare does not cover. They're also administered by commercial insurance carriers, but they follow Medicare guidelines. Their premiums are a little bit different than Medicare's premiums; they may be more or less expensive depending on the plan that you pick.
And then there's Part D which is your prescription coverage. Part D is also administered by commercial insurance carriers and it follows Medicare guidelines as well.
FM: You mentioned Medicare advantage plans. I think this is where some people's eyes begin to glaze over, because it does get to be a lot: you have the different Medicare parts and then you have the Medicare Advantage plans. Could you speak a little bit more about really what the advantage is of those plans?
AS: So the advantage of having a Medicare Advantage plan is that it's an all-in-one service, you would get your prescription coverage, your vision, and your dental, which traditional Medicare does not cover, in addition to the other services that it does cover. It's administered by the commercial carriers, but it follows Medicare guidelines. The advantage to this is having everything in one place. And if your provider isn't in network with Medicare, they may be in network with one of these commercial carriers, as you have to credential with each carrier separately.
For example, if you have a Medicare Advantage plan through Blue Cross, your provider would need to be credentialed with Blue Cross, which means in the case that they were credentialed with Blue Cross, but not with Medicare, you would still be considered in network for that particular visit.
FM: You mentioned that these Advantage plans are administered by commercial companies. Does that mean that they're not like a federal program? They're not a government program?
AS: Medicare Advantage plans are a federal government plan. They are paid for by federal funding as well as premiums from the actual patients that carry the insurance. They're also guided by federal Medicare guidelines. So in short, they are a federal plan.
FM: If someone believes that they qualify for Medicare, how would they go about applying for it?
AS: To apply for Medicare Parts A and B you would contact the Social Security Administration and apply directly through them. For Part C - your Medicare Advantage plans – and part D – your prescription coverage - you would need to go directly to the company that you're planning on having your coverage through and sign up directly through them.
FM: If somebody does want to apply, how do they do it? Is it online? Do they have to go in person somewhere? Where do they actually apply?
AS: To apply for Medicare Parts A and B, you want to go to your local Social Security Administration office, or you can do it on the Social Security Administration's website.
To apply for Part C and Part D, which is your Medicare Advantage plans and your prescription coverage respectively, you can go to the Medicare.gov website and look up the different commercial plans that have Medicare Advantage plans, or you can go directly to the commercial carrier of your choice and inquire about how to apply for which particular plan you want. They can then discuss with you the different advantage plans and what they include before you apply.
FM: Now, when someone believes that they're for Medicaid, how would they go about signing up for that?
AS: There are two ways that you can sign up for Medicaid. The first of which is to go to your local social services office, they'll give you a paper application and someone will walk you through exactly how to fill it out and let you know if you qualify. The other way is to go to the healthcare marketplace and apply. When you put in all your financial information and how many dependents you have, it will tell you what insurance plans you qualify for, including Medicaid if you qualify.
FM: The healthcare marketplace - is that a website?
AS: The healthcare marketplace is a website. It is different for every state because Medicaid requirements are different in each state. For example, in Connecticut: Access Health is how we access the marketplace to see about insurance companies and apply for them. It's a different website in other states, but you should be able to Google the healthcare marketplace for the state that you're in to find out where to go.
FM: That makes sense. I know that in New York state we use the Empire State of Health website. So I think every state is just a little bit different in terms of what they call it. Is that right?
AS: That's correct.
FM: We've talked about Medicare. We've talked about Medicaid. We also hear in the news–or maybe when people switch jobs–about COBRA. It has a cool name, but what exactly is COBRA? How does it work?
AS: COBRA comes into play when you have a qualifying event. A qualifying event being that you are terminated from work, there's a drastic reduction in your hours at work, or you get divorced from the covered member. And what COBRA is, is it allows you to keep your current health insurance plan for up to 18 months after you're no longer with a company at cost, which means you're not only paying your portion of the premium, but you're paying the portion of the premium that the employer was previously paying also, which makes it expensive. But if you can't afford anything else in the meantime, you at least are able to keep your health insurance coverage for up to year and a half.
FM: We've talked about Medicare. We've talked about Medicare Parts. We've talked about Medicare Advantage plans. What is Medicare Secondary?
AS: Medicare as a secondary payer comes into play when a person that's 65 years of age or older is still currently employed and has their own group health insurance. The group health insurance would be the primary payer and Medicare would be the secondary payer in that case.
FM: So how does this factor in with Medicare supplementary plans?
AS: Medicare supplement plans are plans that are meant to be billed as secondary. What they do is they cover the deductible and the 20% co-insurance that Medicare doesn't cover so that the patient has less of an out of pocket cost.
For example, I recommend getting an AARP supplement plan. I believe it's Plan J if I'm not mistaken, that will actually cover the full Medicare deductible and the 20% co-insurance on all claims. There are other supplement plans.
I believe most insurance carriers have them. Anthem has one United Healthcare has one, and there are a number of other ones. It's best to do your research, to see which one fits your budget. For the AARP plan that I recommended, the premium might be a little higher, but the amount that you have to pay on the opposite side of that will be less.