Simple Facts About Medicare

What is Medicare? Medicare is a federal system of health insurance for people over 65 years of age and for certain younger people with disabilities.

There are two types of Medicare: A more detailed overview of the different parts of Medicare is outlined 1. Original Medicare (usually referred in the next few pages. You’ll need to to as Part A and Part B), and determine your personal situation and 2. Medicare Advantage (also called the type of plan that will work best for Part C). you. This overview will provide some basic information that can help you Each covers the same basic services, make the right decision. but they work differently. You’ll need to choose the method that best meets your needs. Medicare eligibility It’s important to make sure you are Original Medicare (parts A and B) eligible for Medicare before you is operated by the government and begin shopping for a plan. Below are government subcontractors. When two criteria to help determine your you visit a doctor or hospital to receive eligibility. You are eligible if: care, Medicare pays these providers directly for covered services. This is • You are 65 years old, or are under often called, “fee for service.” 65 and qualify on the basis of disability or another special Medicare Advantage (Part C) is situation, and operated by private companies approved by Medicare, such as • You are a U.S. citizen or a legal Health Net. Medicare pays a fixed fee resident who has lived in the to the plan for your care. The plan then United States for at least five handles its own payments to doctors consecutive years. and hospitals.

Material ID # Y0035_2013_0092 (H0351, H0562, H5439, H5520, H6815) CMS Accepted 08072012 The Social Security Administration enroll you in Medicare Part A and handles the majority of the paperwork Part B. for joining Medicare. You will likely If you have questions about receive a letter from the Social Security Medicare eligibility, you can visit Administration about Medicare as www.medicare.gov, or call your local you approach age 65. If you’re drawing Social Security Administration office Social Security benefits when you turn for more information. 65, Social Security will automatically

TheDifferent Parts of Medicare

If you have Medicare Part A but have not contributed to Social Security for at least 10 years, you’ll questions about Medicare Part A insurance helps have to pay a monthly premium that Medicare pay for “medically necessary” care can vary from year to year. eligibility, that involves an inpatient stay in the hospital. Part A also helps pay for a If you must pay a premium for Part A, you can visit stay in a skilled nursing facility (SNF) it can be higher if you don’t enroll in www.medicare.gov, as a follow-up to a hospital stay, Part A when you become eligible for or call your local hospice care for the terminally ill, Medicare. Part A also has deductibles, Social Security and some skilled home health care. copays and coinsurance that you will Administration Additionally, Part A also helps pay for pay when you receive certain types some blood transfusions. of care. office for more information. What costs do I pay with Part A? When can I join Part A? With Part A, you must cover all You can join Part A as soon as you personal costs in the hospital, like become eligible for Medicare. You’ll charges for a television or telephone need to sign up in your “initial calls, or the cost of “custodial care,” enrollment period.” You can also join such as eating, bathing or dressing. at a later date, but only at certain times of the year, unless you qualify for an How much does it cost? exception. There is no premium for Part A if you If you are receiving Social Security have made payroll contributions to benefits when you become eligible, Social Security for at least 10 years. you’ll automatically be enrolled in However, if you qualify for Medicare parts A and B. If you’re not receiving You may pay a penalty if you don’t Social Security benefits, you can sign up for Part B when you are first sign up for Part A at your local eligible. Your cost for Part B may go Social Security office. Once you’ve up 10 percent for each full 12-month enrolled, your Part A coverage renews period that you could have had Part B automatically from year to year. but didn’t sign up for it. You’ll pay that penalty for as long as you’re enrolled in Medicare Part B Part B. Medicare Part B helps pay for a variety When can I join Part B? of “medically necessary” care for an If you are receiving Social Security illness or medical condition even when benefits when you turn 65, or there is no inpatient hospital stay. This otherwise become eligible for includes services like doctor’s office Medicare, you will automatically be visits, care in hospitals and clinics enrolled in parts A and B. If you don’t when you are not admitted for an want to join Part B, you can refuse inpatient stay, laboratory tests, some Part B coverage by going to your local diagnostic screenings, annual physical Social Security office. exams, preventive screenings and some skilled nursing care at home. If you’re not receiving Social Security After you pay your deductible, Part B benefits, you can sign up for Part B at generally pays 80 percent and you pay your local Social Security office when 20 percent of the cost of services. you turn 65 or otherwise become eligible for Medicare. What costs do I pay with Part B? Part B primarily helps you pay the Medicare Part C costs of medically necessary care Medicare Part C plans, typically when you’re sick. Only in very limited referred to as “Medicare Advantage” situations does it cover any care for plans, combine coverage for doctor your eyes, teeth or hearing. Except in a visits and for hospital stays, few very limited situations, Part B does not cover medical care you receive These plans are run by private outside the United States. companies, such as Health Net, and let you choose plans that include How much does it cost? prescription drug coverage (often at no The premium amount you pay for Part additional premium), as well as plans B depends on your annual income without prescription drug coverage. and can be automatically deducted Medicare Advantage plans are from your Social Security benefits. required to cover the same services Part B also has deductibles, copays and as Medicare parts A and B, and often coinsurance that you will pay when include medical coverage above and you receive certain types of care. beyond that of parts A and B. In some cases, Medicare Advantage plans In contrast, Medicare Advantage plans, include coverage for vision, dental and as offered by Health Net, can protect hearing, as well as added tools that you from high cost-sharing with a can help you proactively manage your feature that caps your out-of-pocket health and wellness. Plans that include spending for cost-sharing like copays drug coverage may have restrictions and deductibles in any given year. related to that coverage. For more details about the Medicare Advantage plans offered by Health Net How much does it cost? and their costs, feel free to contact Premiums, deductibles Health Net at the phone number on and copays for Medicare the back of your enrollment kit. Advantage plans can vary widely from year to When can I join a Medicare year. If you join a Medicare Advantage Advantage plan? plan, such as Health Net, you will You can join a Medicare Advantage continue to pay your Part B premium plan as soon as you become eligible and your Part A premium, if you have for Medicare, during your initial one. While some Medicare Advantage enrollment period. You can join at plans do not have premiums, a later date, but some plans restrict depending on the plan you choose, your enrollment to your Annual you may have to pay an additional Election Period unless you qualify premium for Medicare Advantage. for an exception. Once you enroll, Part C also has deductibles, copays you have the chance to change your and coinsurance you will pay when coverage each year during the Annual you receive certain types of care, Election Period. If you don’t want to depending on the type of plan you make any changes, you continue to choose. pay the premium every month, and, provided the plan is still available in Medicare Advantage plans differ your service area, your plan will renew further from Part A and Part B automatically from year to year. regarding limits on your cost-sharing. With Part A and Part B plans, there are no limits on your out-of-pocket spending for cost-sharing. And, in some situations, like extremely long hospital stays, your coverage under Part A ends entirely and you become responsible for paying all of your own costs. Types of Medicare Advantage Plans

Medicare Advantage includes several You can see doctors outside kinds of coordinated care plans. the network without They’re called coordinated care plans having to pay the entire because they are built on the idea of cost yourself. However, a network of doctors and hospitals if you do visit a doctor working together to provide care. or hospital outside the network, you’ll usually Health Net offers several of these pay a larger share of the options including HMO, PPO and cost of your care. Special Needs Plans. Coordinated care plans offer one-stop shopping for all of A Special Needs Plan is a care your health care needs. They combine management plan, a special type of hospital care and doctor’s visits and coordinated care plan designed for other outpatient care in a single plan. people with special needs. Special Many plans offer prescription drug Needs Plans may serve people in any coverage as well. of these groups: In an HMO-type plan, you must use • People who are institutionalized in doctors and hospitals that are part of a nursing home or other long-term- the plan’s preferred network. If you care facility because they are unable go outside the network for care, other to care for themselves than for emergency care, urgent care • People who are eligible for both or out-of-area renal dialysis, you must Medicare and the Medicaid pay for your own care. These plans assistance program may require you to choose a primary • People with certain chronic care physician. This doctor coordinates diseases, such as diabetes or heart your specialist care and provides the disease required referral when a specialist visit is needed. Like an HMO or PPO plan, a Special Needs Plan uses a network of doctors In a PPO-type plan, you have more and hospitals working together to freedom to choose your doctor. These provide care. plans typically don’t require you to select a primary care physician or have a referral to see a specialist. Low income subsidy How do I apply for a low-income (Extra Help) subsidy (Extra Help)? It is easy to apply for Extra Help. Just If you have limited income complete Social Security’s “Application and resources, you may for Extra Help with Medicare qualify for a low-income Prescription Drug Plan Costs” subsidy from Medicare to (SSA-1020). Here’s how: pay for prescription drug costs. If you are eligible, you will get help paying • You can apply online at for your monthly premium, yearly www.socialsecurity.gov/extrahelp. deductible, prescription coinsurance • Call Social Security at and copays and will not fall into the 1-800-772-1213 (TTY/TDD coverage gap. 1-800-325-0778) to apply over the You may be automatically eligible for phone or to request an application. this low-income subsidy. To qualify, • Apply at your local Social Security you must be a(an): office. • Full benefit dual eligible (see After you apply, Social Security will Common Terms and Definitions on review your application and send you the next page). a letter to let you know if you qualify • SSI recipient with Medicare or for Extra Help. Once you qualify, you Medicare Savings Programs can choose a Medicare prescription participant. drug plan. If you do not select a plan, the Centers for Medicare & Medicaid You may be required to apply through Services (CMS) will select one for you. the Social Security Administration The sooner you join a plan, the sooner (SSA), particularly if your income you’ll begin receiving benefits. is below 150 percent of the Federal Poverty Level. More information about low-income subsidies and the Federal Poverty Level can be found at www.cms.gov. What is a Medigap plan? When can I join a A Medigap plan, sometimes called a Medicare Supplement “Medicare Supplement plan,” helps plan? pay the costs that parts A and B don’t You can apply to buy a cover. Medicare Supplement policies Medicare Supplement aren’t a government benefit, like policy at any time parts A and B. They are insurance after you turn 65 policies sold by private companies, and join Medicare like Health Net, and are completely Part B. Medicare optional to purchase. There are several guarantees you standard plans you can choose from the right to buy that range in cost and coverage. a Medicare Supplement What costs do I pay with a Medicare policy where you live Supplement plan? during the six months after you turn In general, Medicare Supplement 65 and enroll in Medicare Part B. policies only help you with your During this time, the insurer can’t cost-sharing for parts A and B, like consider your medical history or deductibles, copays and coinsurance. current health in setting the premium. They don’t cover long-term care, However, when you buy the plan, the routine vision, dental, hearing care, insurer may be able to make you wait hearing aids, eye glasses or private for six months before coverage begins nursing. for a pre-existing condition.

How much does it cost? As a general rule, the more generous the coverage, the higher the premium The premiums can also vary from health plan to health plan. Some Medicare Supplement plans have lower premiums and higher deductibles, while others have high premiums and low deductibles. It is important to decide what coverage works best for you and your budget. Finding Coverage that Works for You

Deciding on a Medicare plan is one • Doctor and hospital choice –Do of the most important decisions you your doctors and other health care will make, and the one to make first is providers accept the coverage, or are they part of the network? whether you want Original Medicare Are the doctors you want to see (Part A and Part B) or Medicare accepting new patients? Do you Advantage (Part C). Remember, they have to choose your hospital cover the same basic services – but, as and health care providers from described in the previous pages, a network? Do you need to get they work differently. Your choice referrals? depends on what you need, so keep these important factors in mind when • Prescription drugs – What will your prescription drugs cost under making your decision. each plan? Are your drugs covered • Coverage – Think about your under the plan’s formulary? Are health care needs over the past few there any coverage rules that apply years. When looking at your plan to your prescriptions? options, ensure the services you • Quality of care – The quality of need are covered. care and services given by plans • Your other coverage – Do you and other health care providers can have, or are you eligible for, other vary. Does the plan offer additional types of coverage (like employer services to help you proactively or union)? If so, read the materials manage your health? from your insurer or plan, or call • Convenience – Can you reach your them to find out how the coverage health plan at all hours of the day? works with, or is affected by, Which pharmacies can you use? Medicare. Can you get your prescriptions by • Cost – How much are your current mail? Does the plan offer 24-hour premiums, deductibles and other assistance from certified nurses or costs? How do the costs of a new other health professionals? plan fit into your budget? Consider • Travel – Will the plan cover you in all costs, not just premiums. another state or outside the U.S.? Common Terms and Definitions

Annual Election Period (AEP) – Centers for Medicare & Medicaid The period from October 15 through Services (CMS) – The federal December 7 of each year. During the government agency that runs the AEP, you may enroll in prescription Medicare program and works with drug plans and Medicare Advantage the states to manage their Medicaid plans. programs. Appeal – A special kind of complaint Coinsurance – The percentage a plan you submit if you disagree with a charges for services you may have to decision to deny a request for services, pay after you pay any plan deductibles. or payment for services you have In a plan, the coinsurance payment is a already received. You may also make percentage of the cost of the service. a complaint if you disagree with a Copayment (copay) – In some decision to stop services you are Medicare health and prescription drug receiving. There is a specific process plans, the amount you pay for each our Medicare Advantage and Medicare medical service, like a doctor’s visit or prescription drug plans must use when prescription. A copay is usually a set you ask for an appeal. amount. Benefit period – In Part A, this period Cost-sharing – A term for the way of time begins when you enter a Medicare shares your health care costs hospital for an overnight stay and ends with you. The most common types of when you have been out of the hospital cost-sharing are deductibles, copays for 60 consecutive days. and coinsurance. Catastrophic coverage – In Medicare Coverage gap – A name for the phase Part D, this phase of a drug plan allows in a Medicare Part D plan in which you to pay only a small coinsurance you pay most of the plan’s discounted or small copay for a covered drug, and cost for your covered medication. your plan pays the rest of the cost for the remainder of the year. Deductible – The amount you must pay for services before the plan begins to pay. These amounts can change every year. Dual eligible – A person who is including amounts you’ve paid and eligible for both Medicare and what your plan has paid on your Medicaid. behalf. Grievance – A complaint about the Initial enrollment period – way your Medicare health plan is A seven-month period when you first providing access to care. A grievance become eligible to enroll in Medicare is not the way to deal with a complaint and a Medicare prescription drug plan. about a treatment decision or a service It begins three months before your that is not covered (see Appeal). 65th birthday and ends no later than three months after the month of your Health Maintenance Organization birthday. (HMO) plan – In Part C, a type of Medicare Advantage plan in which Inpatient care – Care you receive in a you must use doctors and hospitals in hospital when you are admitted for an the plan’s network for your care. If you inpatient stay. go outside the network, other than for Maximum out-of-pocket limit – A emergency care, for urgent care, or limit that Medicare Advantage plans for out-of-area renal dialysis, you are set on the amount of money you responsible for paying for your will have to spend out of your own own care. pocket in a plan year. In Medicare Home health care – In parts A and B, Part D, you must reach this maximum skilled nursing care and therapy, such before catastrophic coverage begins as speech therapy or physical therapy, for the remainder of the year. (See provided to the homebound on a part- Catastrophic coverage.) time or intermittent basis. Medically necessary care – Services Hospice care – Care for those who are or supplies that are needed to diagnose terminally ill. Hospice care typically or treat a medical condition, according focuses on controlling symptoms and to the accepted standards of medical managing pain. In Part A, hospice care practice. also includes support services for both Network – In parts C and D, the patients and caregivers. Part A covers group of health care providers, such as both hospice care received at home hospitals, doctors and pharmacies, that and care received in a hospice outside agree to provide care to the members the home. of a Medicare Advantage coordinated Initial Coverage Limit (ICL) – The care plan or prescription drug plan. maximum limit of drug coverage Out-of-pocket maximum – A limit under the initial coverage period. that Medicare Advantage plans set on Initial coverage – The stage before the amount of money you will have to your total drug expenses have reached spend out of your own pocket in a plan the plan’s designated dollar amount, year. For Medicare Part A and Part B services, plan premiums do not count Premium – A fixed amount you toward the out-of-pocket maximum. have to pay to participate in a plan (See Maximum out-of-pocket limit.) or program; in private insurance, the price you pay for a policy, usually as a Outpatient care – Care you receive monthly payment. as a hospital patient if you are not admitted for an inpatient stay, or care Preventive care – Care that is meant you receive in a free-standing surgery to keep you healthy, or to find illness center as an outpatient. early when treatment is most effective. Part A – The part of Medicare that Prior authorization – Approval in provides help with the cost of hospital advance to get services or certain stays, skilled nursing services following drugs that may or may not be on the a hospital stay, and some other kinds plan’s formulary. Covered drugs that of skilled care. need prior authorization are marked in the formulary. Part B – The part of Medicare that provides help with the cost of doctor Provider – A person or organization that visits and other medical services that provides medical services and products, don’t involve overnight hospital stays. such as a doctor, hospital, pharmacy, laboratory or outpatient clinic. Part C – The part of Medicare that allows private insurance companies Referral – A written approval from to offer plans that combine help with your primary care physician (doctor) hospital costs with help for doctors’ for you to see a specialist or get certain visits and other medical services. services. In many Medicare managed Part C plans are usually referred to as care plans, you need to get a referral “Medicare Advantage” plans. before you can get care from anyone except your primary care physician. Part D – The part of Medicare that offers help with the cost of prescription Service area – The area where a health drugs. plan accepts members. For plans that require you to use their doctors and Preferred Provider Organization hospitals, it is also the area where (PPO) – In Part C, a type of Medicare services are provided. Advantage plan in which you can use either doctors and hospitals in the Special Needs Plan (SNP) – A type of plan’s network, or go to doctors and Medicare Advantage plan that serves hospitals outside the network. people with special health care needs.

Health Net is a Medicare Advantage organization with a Medicare contract. Health Net of Arizona, Inc., Health Net of California, Inc., Health Net Health Plan of Oregon, Inc., and Health Net Life Insurance Company are subsidiaries of Health Net, Inc. Health Net is a registered service mark of Health Net, Inc. All rights reserved. CA89767 (4/12)