Medicare information from Gary Russell

From Gary Russell, 3/30/07

Molly, I think it is easier to think of what each plan covers and then apply that coverage to the person's situation.

Under #3, Medicare has a $131 deductible and then pays 80% with the enrollee responsible for 20%. If the Medicare enrollee has no other coverage then the enrollee is going to be responsible for $131 and 20% of all charges with no stop gap. If the person has secondary coverage with STRS Ohio, then first he/she would have to meet the STRS Ohio deductible ($1,500 Basic plan, $500 Plus plan). This deductible is going to be met by paying the $131 Medicare deductible and the 20% Medicare coinsurance until the $500 or $1,500 is met. Then of the remaining amount left over from Medicare, the STRS Ohio enrollee is going to pay 20% until the enrollee's payments reach the out-of-pocket maximum for the particular plan.

For example, assume a $10,000 Medicare Part B covered procedure. Medicare will not cover the first $131 and count it toward the deductible which will leave a balance of $9,869 of which he/she will be responsible for 20% coinsurance or $1,973.80 (20% x $9,869). So after Medicare processes the claim, the individual is responsible for a total of $2,104.80 ($131 + $1,973.80). The STRS Ohio plan would now process this amount. If enrolled in the Plus plan, the first $500 is used to satisfy the deductible leaving a balance of $1,604.80 ($2,104.80 - $500) of which the enrollee will be responsible for 20% or $320.96 (20% x $1,604.80). Therefore, with Medicare and the STRS Ohio Plus plan the member's net responsibility from the $10,000 of allowable charges is $820.96.

Other items:
1. If STRS Ohio no longer offered health care coverage those with Medicare Parts A&B could look at other options in the market for supplemental coverage. These are very common. If the member had Part B only, then he/she could purchase Part A. I believe the cost is around $400 per month, or look at other options in the market for hospital coverage. I should point out that Medicare is currently predicting insolvency before STRS Ohio.

2. I've taken these numbers from the Medicare & You booklet available on the Medicare website. For a hospital stay for someone who only has Medicare, he/she would be responsible for $992 for days 1-60, then $248 per day for days 61-90, $496 per day for days 91-150 and then the all cost for each day over 150.

3. You are correct, if someone has only Medicare then for medical items covered under Part B the individual will first pay the deductible and then 20% of all charges.

Gary

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From Gary Russell, March 29, 2007

Molly, I'll reply to the best of my knowledge and understanding; however, detailed questions about Medicare coverage should really be directed to Medicare staff.

1. You are correct; I don't know of any out-of-pocket maximums or stop gaps in the Medicare plan.

2. Most members are eligible for free Part A through their own previous work or through their spouse. If the retiree is not eligible for free Part A coverage, then STRS Ohio provides comprehensive hospital coverage. STRS Ohio does not provide an exact duplicate of Part A coverage. This hospital coverage is provided at no additional cost to the retiree. A retiree with Medicare Part B only pays the same STRS Ohio premium as a retiree with Medicare Parts A & B.

3. The 2007 Medicare Part B premium is $93.50 (assuming no adjustment for high income). For a 30-year retiree, STRS Ohio reimburses $52.83 leaving a net cost to the retiree of $40.67. For Meidcare only Part B-covered services, there is a $131 deductible and the 20% coinsurance for most services. Mental health services are 50% for outpatient. No maximum out-of-pocket that I know of.

Responses to second set of questions;

1. Retirees who have Part B only are retirees who are not eligible to enroll in Part A for free. These are people who don't have the necessary credit in Social Security nor a spouse who has the necessary credits to qualify for free Part A.

2. Retirees are eligible for free Part A through their own work or through a spouses covered employment. Retirees do not get Part A coverage through STRS Ohio. If a retiree is not eligible for free Part A, STRS Ohio provides free comprehensive hospital coverage.

3. The retiree pays the same premium whether he/she has Parts A&B or Part B only. The premiums in your question are the difference between the Basic and the Plus plan.

4. Upon Medicare eligibility, Medicare is the primary plan and STRS Ohio plan is secondary. The doctor's office should bill you after the claim has cleared Medicare and your STRS Ohio coverage. You will also get an EOB from Medicare and your STRS Ohio coverage that will show what charges are remaining.

5. I'm not sure I understand this question; however, everyone pays a premium for Medicare Part B. People with enough Medicare-covered employment get Part A for free.

6. Again, I'm not sure I understand the question. Please see the answers above regarding Medicare coverage.

7. I believe this is in reference to retirees with Part A&B and those with Part B only. The Medicare only Part A hospital plan has a $992 charge for days 1 through 60, while the STRS Ohio plan does not. Both STRS retirees with Parts A&B and those with Part B only have the same hospital coverage so after the STRS Ohio plan pays after the Medicare plan both groups end up with the same coverage assuming the retiree with Part B only uses a network provider.

I hope this clears up any confusion.

Gary