The Centers for Medicare & Medicaid Services (CMS) is responsible for managing the Medicare program in the U.S. currently. It is a division of the Department of Health and Human Services (HHS). The budget estimates of HHS programs are approximately $1,120 billion in required funding with another $95 billion in “discretionary” spending.
Millions of Americans rely on healthcare that is funded through Medicare and Medicaid, which is one reason why healthcare is the single largest part of the Federal Budget. As a result, new legislative measures and changes to the program occur continuously in efforts to reduce costs. In Arizona, roughly 1.2 million people are beneficiaries of Medicare.
What is Medicare?
Medicare is a federal program that was established in 1965. It is a health insurance program for those ages 65 and over. It is also used by some people under the age of 65 that have certain diseases and disabilities. The program is divided into Parts A, B, C, and D.
Part A is intended for inpatient care in hospitals, skilled nursing care, hospice, and home health care.
Medicare Part B provides coverage for services from doctors, wellness care and other outpatient care. It is also used to pay for some medical equipment such as mobility devices and beds. Parts A and B are commonly referred to as Original Medicare. Medicare Part D is operated by private insurers according to Medicare-specific guidelines for prescription drug products.
Those with Original Medicare may add various supplemental plans. Medicare Part C consists of alternative “bundled” plans commonly called Medicare Advantage. They generally have Part A, B, and D coverage included. They may also include additional benefits such as dental and hearing.
Prescription Drugs in Arizona Medicare
Arizona residents that qualify for Medicare are generally eligible for Medicare Advantage and Medicare Prescription Plans. Medicare Part D coverage began in 2006 and is available from licensed insurers. Those using prescription plans should review them annually to see if they are still the best option for their needs.
Those with employer-provided prescription plans may be eligible to continue with those that are considered “creditable.” When comparing prescription drug plans, a good starting point involves reviewing the plan’s covered drugs. This is referred to as the formulary. You will also want to consider the co-payment amount that must be paid “out-of-pocket” for prescriptions.
Arizona Department of Economic Security (DES) and Medicare
The Arizona DES has two programs that are designed to assist the state’s Medicare beneficiaries. These plans are the State Health Insurance Program (SHIP) and the Senior Medicare Patrol (SMP). There are five classifications of plans in Arizona as follows:
- Health Maintenance Organizations (HMOs): A group of medical providers including doctors and hospitals establishes set rates for Medicare patients. Patients generally must receive care from the providers participating in the HMO.
- Preferred Provider Organizations (PPOs): A form of managed care where services are provided by doctors and hospitals participating in a specific network. Patients who receive care from providers outside of this network will likely have additional costs.
- Private Fee for Service (PFFS): A private insurance plan that accepts Medicare patients. The insurance plan dictates the prices paid for the medical services offered.
- Medicare Saving Accounts (MSAs): A savings account is established exclusively to pay for medical expenses. Medicare allocates a certain amount to the account annually. These accounts may have high-deductible plans with a $2,000 minimum.
- Special Needs Plans (SNPs): A form of HMO designed for those who qualify for both Medicare and Medicaid. They also have chronic medical conditions or those need long-term medical assistance.
Arizona Senior Medicare Patrol (SMP)
This is a group of professionals and volunteers that seek to assist Medicare patients by uncovering fraud and errors. Most states have these organizations. Some of their efforts include counseling and education. The agencies often identify illegal marketing practices and detect fraud such as ordering and billing Medicare for unnecessary tests or procedures.
Original Medicare typically includes Part A and Part B only. Some individuals, including those with employer-provided insurance plans, may elect not to participate in Part B.
Original Medicare does not typically cover dental, vision or hearing-related services. The program tends to have higher “out-of-pocket” expenses such as copayments and deductibles.
Usually this “Part C” includes A, B, and D. It provides coverage for a wider range of services compared to Original Medicare and tends to have lower “out-of-pocket” costs. The plans involve contracts between private companies with Medicare.
What are Medigap Policies?
“Medigap” policies are considered to be Medicare supplement plans. They are offered by private companies. Some of the gaps that these plans cover include deductibles and copayments. These differ from Advantage plans because they are separate and require that you still maintain an Original Medicare plan.
Medigap policies do not cover long-term care coverage, dental, hearing or vision. Since 2006, they also became unable to offer prescription drug coverage. Spouses must purchase Medigap policies separately.
Independent Insurance Agency in Arizona
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