Medicare For Dummies

Medicare Articles

How to Opt Out of Medicare Part B

Medicare Part B covers two kinds of health services: medically necessary care and preventive care. You need to think twice about saying no to Medicare Part B coverage, even though it costs a monthly premium to use it. (If that amount would be a hardship, you may be able to have the premiums paid by your state.) It’s an important decision you need to make during the enrollment process — especially if you’re signed up automatically — and you should be very clear on how to deal with it given your situation. There are situations when opting out of Part B is okay — in other words, not likely to cause you any regrets (or cost you money!) in the future. And there are situations when opting out is costly or causes other problems. Bizarrely, the rules are different for people who have Medicare because they’re 65 or older and those who have it at earlier ages because of a disability. So look separately at these two groups to know when people in each can confidently turn down Part B.

Know when to turn down Part B if you’re 65 or older

In general, when you’re 65 or older, you should decline Part B only if you have group health insurance from an employer for whom you or your spouse is still actively working and that insurance is primary to Medicare. (That is, it pays before Medicare does.)

In this situation, you can delay Part B enrollment without penalty until the employment stops or the insurance ends. So if you’re not yet drawing Social Security retirement benefits, just skip signing up for Part B. Or if you’re enrolled automatically because you’re receiving those benefits, you can decline Part B by following the instructions that Social Security sends you in the letter that accompanies your Medicare card and meeting the specified deadline. Opting out ensures that you don’t have to pay Part B premiums or, if you’re receiving retirement benefits, have them deducted each month from your Social Security retirement check. But of course, if you prefer to pay for both employer insurance and Medicare coverage — and that’s entirely your choice — go ahead and enroll (or stay enrolled) in Part B.

One group of people is especially prone to turn down Part B without giving it adequate thought: people age 65 and older who are in same-sex marriages or domestic arrangements with people of the same or the opposite sex and who are covered under health insurance from their partner’s employer. If you’re in either of these situations, you need to find out exactly how current law applies to you.

When to turn down Part B if you’re under 65

In general, if you have Medicare based on disability, you should decline Part B only if

• You have health insurance from an employer for whom you or your spouse actively works, and the employer has 100 or more employees.

• You’re covered as a family member on somebody else’s group health plan at work, and the employer has 100 or more employees.

What does family member mean? It means that the employer providing this insurance regards you as eligible for health coverage based on your domestic relationship with an employee — even if you aren’t formally married to that person and even if they are the same sex as you.

When turning down Part B at any age is risky

Regardless of whether you have Medicare based on disability or age, you should definitely enroll in Part B (or not refuse it) if you have health insurance that will automatically become secondary to Medicare (it will pay after Medicare does) when your Medicare benefits begin. This includes the following:

• Health insurance that you buy yourself on the open insurance market and that isn’t provided by an employer

• Health insurance from an employer with fewer than 20 employees (if you’re 65 or older)

• Health insurance from an employer with fewer than 100 employees (if you have Medicare because of disability)

• Retiree benefits from a former employer (your own or your spouse’s)

• Health benefits from the military’s TRICARE For Life retiree program

When Medicare is primary coverage, it pays the bills

You should enroll in Part B coverage in the preceding situations for a very good reason quite apart from the possibilities of late penalties down the road if you don’t. When Medicare is considered primary coverage, it pays your medical bills first. So if you’re not enrolled in Part B, you run the real risk of having your insurance plan deny any claims that Medicare could’ve paid — from basic ones like doctors’ visits and lab tests to major ones like surgery. In other words, you may face having to pay the entire bill. Worse, if your own insurer takes a while to realize that you haven’t enrolled in Part B, your plan may even ask you to pay back all the money it has spent on your medical services since you became eligible for Medicare. This kind of thing doesn’t always happen. For example, if you’re a federal retiree and receiving health insurance from a plan in the Federal Employee Health Benefits Program, you aren’t required to enroll in Part B.

When deciding whether to accept or decline Part B, finding out whether Medicare would be primary or secondary to any other insurance that you have is critically important.

Copyright © 2014 AARP. All rights reserved.

Medicare Articles

What Medicare Doesn’t Cover

Although Medicare covers a multitude of medical services, it also has some yawning gaps. Some may surprise you, so the following sections address the broad areas that Medicare doesn’t normally cover, together with some tips for alternative ways of filling in the gaps. Being aware of them from the start is better than being disappointed if Medicare denies coverage after the fact.

Routine hearing, vision, dental, and foot care

The older you get, the more you’re likely to need professional attention for your ears, eyes, teeth, and feet. But Medicare doesn’t cover routine services to take care of these parts. Routine is the key word here. Medicare pays to treat problems it considers medically necessary (including cataract surgery, jaw restoration after injury, and treatment for diseases of the ear) but not the kind of care you may need on a regular basis, such as the following:

• Ear exams, hearing aids, or having hearing aids fitted
• Vision tests, eyeglasses, or contact lenses
• Oral exams, teeth cleaning, extractions, or dentures
• Toenail clipping or the removal of corns and calluses

However, routine services for ears, eyes, and teeth may be covered if you’re enrolled in a Medicare Advantage plan that provides them as extra benefits. Some plans offer them as separate benefit packages for an additional premium. Not all plans offer coverage for this routine care, but those that do are identified in the plan finder program on Medicare’s website with small logos: D for dental, V for vision, and H for hearing.

Of course, as always in Medicare, some exceptions exist. You can get coverage for foot care in certain circumstances — for example, if you have foot problems caused by conditions such as diabetes, cancer, multiple sclerosis, chronic kidney disease, malnutrition, or inflammation of the veins related to blood clots — especially if the act of toenail clipping would be hazardous to your health unless done by a professional. But the bottom line is that to get Medicare coverage for foot care, you need your doctor or podiatrist to provide evidence that said care is medically necessary.

Home safety items

Medicare spends billions of dollars a year on treating the results of falls, and older Americans are five times more likely to end up in the hospital for falls than for any other injuries. So, you’d think that Medicare would try to save at least some of those billions by covering safety items that help prevent people from falling. But no, it doesn’t. To be sure, Medicare covers a few items it deems medically reasonable if prescribed by a doctor — for example, seat lifts that help incapacitated people sit down or get up from a chair, or trapeze bars that help people sit up or alter positions when confined to bed. But Medicare doesn’t pay for equipment it considers items of convenience rather than of medical necessity. A long list of non-covered items includes stair lifts or elevators, bathtub lifts or seats, grab bars, room heaters, air conditioners, humidifiers, posture chairs, massage devices, physical fitness equipment, and medical emergency alert systems.

But you may be able to get help in other ways:

• If you’re a veteran with disabilities, be aware that the Department of Veterans Affairs has little-known programs that provide cash grants to help eligible vets make safety improvements in their homes. Call the VA at 877-827-3702, email [email protected].
• If your income is limited, contact the nonprofit organization Rebuilding Together, which provides volunteers to make housing repairs and install safety equipment free of charge. Call 800-473-4229 for local information.
• If you file itemized tax returns, you may be able to deduct the costs of home improvements for medical reasons.

Nursing home care

Many people are surprised, and often alarmed, to discover that Medicare doesn’t cover long-term care in nursing homes. I’m not talking here about short-term stays in a skilled nursing facility (most of which are nursing homes) after leaving the hospital; Medicare does cover those stays in specific circumstances. But what if you become too sick or incapacitated to live at home and need the constant long-term care that a nursing home provides? Medicare will continue to cover your medical needs, but it won’t pay for what it calls custodial care, which refers to help with the activities of daily life such as using the bathroom, dressing, and so on. Nor will Medicare pay for your room and meals in a nursing home. These same rules apply to assisted living facilities. Most people living in nursing homes pay for their custodial care out-of-pocket — with the help of long-term-care insurance, if they’ve purchased it — until their resources run dry. At that point, they usually become eligible for Medicaid, the state-run health-care system for people with very limited incomes and resources, which does pay the custodial care bills of people who qualify. (Because of the similarity in names, many people confuse Medicare and Medicaid, especially when it comes to thinking about long-term care.) Eligibility rules for Medicaid vary from state to state. (And the name of the program is different in some states — for example, MediCal in California, MassHealth in Massachusetts, and TennCare in Tennessee.) To find out how the rules apply to you or a family member, you may need to consult an informed counselor or a qualified elder care attorney.

For contact information of people who can help, check out the official document “Your Guide to Choosing a Nursing Home or Other Long-Term Services and Supports.” You can also visit Medicare's nursing home comparison information.

Medical services abroad

Medicare doesn’t pay for medical services outside of the United States and its territories except in these extremely rare circumstances:

• You’re traveling between Alaska and another state and have a medical emergency that means you must be treated in Canada.
• A medical emergency occurs while you’re in the United States or its territories, but the nearest hospital is in a foreign country — for example, across the border in Canada or Mexico.
• You live within the United States or its territories and need hospital care (regardless of whether it’s an emergency), but your nearest hospital is in a foreign country.

Some Medigap supplemental insurance policies (those labeled C, D, F, G, M, or N) cover emergency or urgently needed treatment abroad. In this situation, you pay a $250 deductible and 20 percent of the cost of the medical services you use up to a lifetime maximum of $50,000. Some Medicare Advantage plans also cover emergencies abroad, and so do some employer benefits and TRICARE military benefits. But otherwise, you need to buy travel insurance that includes medical emergencies when planning journeys abroad.

What if you live abroad? Medical treatment in other countries is almost always less expensive than in the United States, so paying out-of-pocket may not bankrupt you. And in some circumstances, you may be taken care of by the national health program of the country you’re living in. But buying health insurance on the open market may be difficult or very expensive. One option is to join a nonprofit organization called the Association of Americans Resident Overseas, which has long lobbied Congress to make Medicare available abroad. AARO offers its members access to a variety of private health insurance plans that can be used in many countries.

Services that may be nice but aren’t necessary

You probably aren’t surprised to know that you can’t get a face-lift or a tummy tuck at taxpayers’ expense. Surgery solely for cosmetic purposes is one of the absolute no-no’s of Medicare coverage. (Medicare does cover bariatric surgery to reduce the size of the stomach in very obese people, but this procedure is to lessen their risk of serious health disorders and not to improve their looks.) Acupuncture and other alternative medical practices are barred under traditional Medicare. Physical fitness classes and gym memberships are also excluded. But some of these services (notably gym memberships) are covered as extras in some Medicare Advantage plans. Even something as relatively mainstream as chiropractic care may be excluded from Medicare coverage in many circumstances. Chiropractors help lessen the pain of spine and joint problems, most often by the manipulation of bones. Medicare covers manipulative treatment from a licensed chiropractic physician when you’re injured or in pain because of a problem with the spine, provided that the treatment is clearly improving your condition. But Medicare doesn’t pay for the manipulation of other joints (such as shoulders and knees) or for other types of chiropractic care such as massage or traction. And it doesn’t pay for maintenance care to keep you stable if you aren’t demonstrably improving. Finally, in the hospital, Medicare doesn’t cover a private room (unless sharing one would be medically inadvisable), private nursing, or conveniences like a telephone or television if these items are billed separately.

Medicare Articles

What Medicare Part D Covers

Part D, Medicare's program for covering prescription drugs, is a complicated benefit that resembles no other type of drug coverage ever devised. That's why understanding how it works before plunging in is really important. Following is information on the peculiarities of Part D coverage — how it can fluctuate during the year, how different plans have their own lists of drugs they cover, and which drugs are excluded from Part D and which must be covered.

Drug coverage that can vary throughout the year

It sounds crazy, but you may find yourself paying different amounts for the same medicines at different times of the year. That's because Part D drug coverage is generally divided into four phases over the course of a calendar year. Whether you encounter only one phase or two, three, or all four depends mainly on the cost of the prescription drugs you take during the year — unless you qualify for Extra Help. Here's the breakdown:

• Phase 1, the annual deductible: If your Part D drug plan has a deductible, you must pay full price for your drugs until the cost reaches a limit set by law ($435 in 2020) and drug coverage actually begins. Many plans don't charge deductibles or charge less than the limit. But if your plan has a deductible, this period begins on January 1 or whenever you start using your Medicare drug coverage.
• Phase 2, the initial coverage period: This stage begins when you've met any plan deductible. Otherwise, it begins on January 1 or whenever you start using Medicare drug coverage. You then pay the co-payments required by your plan for each prescription, and the plan pays the rest. This period ends when the total cost of your drugs — what you've paid plus what your plan has paid — reaches a certain dollar limit set in law ($4,020 in 2020).
• Phase 3, the coverage gap: This gap — often called the doughnut hole — begins when you hit the limit of initial coverage and ends if and when the amount you've spent out-of-pocket on drugs from the beginning of the year hits another dollar limit set in law ($6,350 in 2020).

Until 2011, you would've had to pay 100 percent of the cost of your drugs in the gap. Now you pay a lot less because under the Affordable Care Act, the gap is gradually shrinking. In 2020, your plan will cover at least 5 percent of the cost of covered brand-name drugs, plus you’ll get a discount of 70 percent on brand-name drugs from the manufacturer, so the amount you will pay is 25 percent of the cost. Also, as of 2020, Medicare will cover 75 percent of the price for generic drugs for those in the coverage gap, so in 2020, you will pay only 25 percent for both generic and brand-name drugs. These discounts come partly from the drug manufacturers and partly from the government.

What’s more, the 50 percent that the drug manufacturers contribute to the discounts on brand-name drugs counts toward the dollar out-of-pocket limit that gets you out of the gap; that is, you get credit for having paid full price even though you’re receiving the discount. But for any discounts funded by the government, such as those for all generic drugs and anything above 50 percent for brands, only what you pay counts toward getting out of the gap.

• Phase 4, catastrophic coverage: If your drug costs are high enough to take you through the gap, coverage kicks in again. At this point, your share of the costs drops sharply. You pay no more than 5 percent of the price of each prescription. Catastrophic coverage ends on December 31. The next day, January 1, you return to Phase 1 (or Phase 2 if your plan has no deductible), and the whole cycle starts over again.

This figure is a quick way of looking at the same cycle of coverage. The following figure shows this information in a different way. Here, you can see examples of brand-name drugs costing (for the sake of simplicity) $100, $200, or $300 per one-month prescription — and what you'd pay for them in each phase of coverage. These examples assume co-pays during the initial coverage period of $45 for each prescription, although co-pays vary widely among Part D plans.

All about formularies

Formulary is jargon that becomes familiar when you're in Part D because it directly affects what you pay. A formulary is simply the list of drugs that each Part D plan decides to cover. (No national formulary exists.) Here's why it's important that your drugs are included on your plan's formulary:

• You usually have to pay the whole tab for drugs that aren't covered. Your plan pays its share of the cost during the initial and catastrophic coverage phases (Phases 2 and 4). But for any drug the plan doesn't cover, you pay full price in all phases of coverage unless you win an exception from the plan. The difference in your out-of-pocket expenses between a covered and uncovered drug can be hundreds of dollars a month.
• You don't get doughnut hole credit for uncovered drugs. If you fall into the doughnut hole (Phase 3), the cost of any drugs not covered by your plan doesn't count toward the out-of-pocket limit that gets you out of the gap and triggers low-cost catastrophic coverage.
• You're more likely to properly fill and take your medicines. You need the meds you're prescribed for the sake of your health. If you get coverage for them and don't have to pay full price, you're much more likely to fill all your prescriptions and not skip doses.

No Part D plan covers all prescription drugs, and the number covered varies greatly among plans. In 2019, 63 percent of drugs were covered by Medicare Part D plans, according to an analysis by the health research group Avalere Health. So, the goal is to choose a plan that covers all, or at least most, of the specific drugs you take.

The drugs Part D plans must cover

Although Medicare law doesn't require Part D plans to cover every drug, it does insist that each plan covers at least two drugs in each class of medications. A class means all the similar drugs that are used to treat the same medical condition. Many plans cover more than two in each class. But every plan must cover "all or substantially all" drugs in each of the following six classes:

• Anticancer drugs (used to halt or slow the growth of cancers)
• Anticonvulsants (used mainly to prevent epileptic seizures)
• Antidepressants (used to counteract depression and anxiety disorders)
• Antipsychotics (used to treat mental illnesses such as schizophrenia, mania, bipolar disorder, and other delusional conditions)
• HIV/AIDS drugs (used to block or slow HIV infection and treat symptoms and side effects)
• Immunosuppressants (used to prevent rejection of transplanted organs and tissues and treat immune system disorders and some inflammatory diseases)

Medicare requires every Part D plan to cover pretty much all drugs in these categories because of the clinical problems that can occur when patients abruptly stop taking such medications or switch to others.

The drugs Medicare doesn't pay for

By law, Medicare doesn't pay for certain kinds of drugs. Part D plans aren't prohibited from covering them; Medicare just doesn't reimburse their cost. So although a few plans may cover some of these drugs, most plans don't cover any. The types of excluded drugs are

• Medicines sold over the counter (not needing a doctor's prescription)
• Drugs used for anorexia, weight loss, or weight gain
• Drugs used for cosmetic reasons and hair growth
• Drugs used to promote fertility
• Drugs used to treat sexual or erectile dysfunction
• Medicines used to treat cough or cold symptoms
• Prescription vitamins and mineral products

Sometimes Medicare will pay for medications in these categories if they're used for a "medically acceptable" purpose — for example, cough medicines when prescribed by a doctor to alleviate medical conditions such as asthma, drugs for impotency when prescribed to treat different medical conditions that affect veins and arteries, or antismoking drugs if prescribed by a doctor rather than bought over the counter. Until 2013, Medicare also excluded barbiturates (used for anxiety and seizures) and benzodiazepines (used for anxiety and sleeping problems) because these drugs are often abused. But the ban has now been lifted wholly on both types of drugs, allowing Part D plans to cover them for any medically accepted indication.

When drugs are covered by Part A, Part B, or Part D

As confusing as it sounds, some medications may be covered not only under Medicare Part D but also under Part A or Part B. Sometimes an identical drug may be covered by all three but charged under one or another according to different circumstances. That's because certain drugs were covered under A or B before D came into existence, and that practice continued. Here's the general rule of thumb:

• Part A covers drugs administered when you're a patient in the hospital or a skilled nursing facility.
• Part B covers drugs administered in a doctor's office (such as injected chemotherapy drugs), hospital outpatient departments, and, in some circumstances, by a hospice or home health-care professional.
• Part D covers outpatient drugs that you administer to yourself, a caregiver administers to you at your home, or you receive if you live in a nursing home. (These drugs are usually pills but also include self-injected insulin for diabetes, for example.)

These general rules are more complicated in some situations. For example, if your organ transplant was covered by Medicare, the immunosuppressant drugs you need afterward are covered by Part B. But if your transplant surgery wasn't covered by Medicare (perhaps because you had it before joining the program), the drugs are covered under Part D.

Part D doesn't pay for drugs covered by Parts A or B. So if any of your meds are in question, your Part D plan may require information from you and your doctor — usually concerning any related medical treatment, such as surgery — before covering them. For this reason, Part D plans often place a prior authorization restriction on such drugs to determine whether Part A, B, or D should cover them. Your doctor may be able to settle this matter over the phone or may help you file a speedy exception request. Either way, your doctor needs to explain why a prior authorization shouldn't apply in this case.