Greg Nickell: Answers for Molly Janczyk

From Greg Nickell, May 26, 2009
Dear Ms. Janczyk:
Your questions are not just yes or no answers for someone who starts with STRS Ohio primary coverage at the beginning of the year and then sometime during the year enrolls in Medicare which makes the STRS Ohio coverage secondary.
As Ms. Knoesel correctly responded to you previously, “Medicare will require you to pay its deductible.” When an individual enrolls in Medicare, Medicare does not recognize deductible or coinsurance amounts a person has previously paid during the year through a health care program such as STRS Ohio’s Plus or Basic Plans. Medicare becomes the primary plan and plans like STRS Ohio’s become secondary plans.
As the primary plan, 2009 Medicare has separate deductibles of $1068 for Part A and $135 for Part B that must be met before Medicare will make any payments. Once the Medicare Part A deductible is satisfied, Medicare generally pays 100% for corresponding Part A claims. Similarly, once the Medicare Part B deductible is satisfied, Medicare generally pays 80% for subsequent Part B claims. Medicare does not have an annual out-of-pocket (OOP) limit for Part A or Part B. Medicare also does not have any family limits like the family OOP limits in both the STRS Ohio Plus and Basic Plans. Medicare does not take into consideration whether you have already paid or met any deductible or coinsurance amounts or limits under any other coverage.
The answer to your first question below is: Yes, as it pertains to Medicare. Medicare processes claims without regard to any other coverage like STRS Ohio’s Plus and Basic Plans. This means when Medicare processes claims it will always subtract Medicare’s deductibles and coinsurance amounts before making any payments to the provider of service.
The question is what happens next when a person has STRS Ohio secondary coverage?
For services covered by the 2009 STRS Ohio Plus and Basic Plans administered by Aetna or Medical Mutual, any covered allowed amount not paid by Medicare (including deductibles and coinsurance amounts) is considered for payment by the STRS Ohio plan.
When a person has already met their STRS Ohio plan deductible, for services covered under the STRS Ohio plan, the plan would pay 80% of the remaining balance (including any Medicare deductible or coinsurance) not paid by Medicare until the person reaches their annual out-of-pocket limit. At the point where a person satisfies both their STRS Ohio plan’s annual deductible and out-of-pocket limits, the STRS Ohio plan pays 100% of the allowed amount for all covered services.
The answer for 2009 to your second question below is: Yes, so long as you remain in a self-insured plan under the same administrator, the amount credited toward the STRS Ohio plan deductible and out-of-pocket limits prior to becoming enrolled in Medicare remain in place for the STRS Ohio self-insured plans, i.e. the deductible and coinsurance limits do not start over for the STRS Ohio plan because you become enrolled in Medicare. Once a person in the self-insured plans satisfies their STRS Ohio plan deductible and out-of-pocket limits whether it is before or after enrolling in Medicare, STRS Ohio pays the allowed amount for all covered services at 100% including any covered services where there is a Medicare deductible or coinsurance.
The answer to question three below is: It depends. The vast majority remain in the same self-insured STRS Ohio plan with the same administrator they had before they enrolled in Medicare and their deductible and OOP amounts carry forward. So when the person remains in the same self-insured plan with the same administrator, the answer is yes if they have satisfied their STRS Ohio plan’s annual deductible and OOP limits.
However, when a person ages into Medicare, they can choose a different administrator and/or plan including in some cases fully insured plans in the Cleveland, Canton and Toledo areas. If the person lives in one of the three cities listed above and chooses to enroll in one of the fully-insured plans, or they change from Medical Mutual to Aetna or vise versa, their deductible and OOP amounts do not carry over. Also, if the person changes plans from Plus to Basic, they would have additional deductible and OOP to meet under the STRS Ohio self-insured plan.
In Summary, when an individual enrolls in Medicare, Medicare always charges Medicare’s deductibles and coinsurance amounts regardless of STRS Ohio coverage. Any balances not paid by Medicare which are owed by the individual then are considered for payment under the STRS Ohio plan. If the person has not changed administrators, the amount of deductible and coinsurance they paid prior to enrolling in Medicare carries forward. In these cases, if the person has met their annual deductible and OOP limit, any amounts for services covered under the STRS Ohio plan that the person owed under the Medicare plan will be covered in full by the STRS Ohio plan. Of course, all STRS Ohio plan deductibles and OOP accumulators reset each calendar year.
One final note, STRS Ohio is actively engaged in negotiations with potential plan administrators for the STRS Ohio programs starting in 2010. The above scenarios could change depending upon the outcomes of these discussions.
Greg Nickell
Director of Health Care Services
From Molly Janczyk, May 23, 2009
Subject: PLEASE ANSWER: Medicare Coverage: HC STAFF: NEFH: RETIREES: ORTA
Can someone please tell me what happens NOW in the year a benefit recipient and spouse turns 65 mid year??? I cannot get an answer to this question.
Beginning Jan. 2009, there were new deduc and out of pockets. Scenario: A recipient and spouse have both met deductibles for 2009 and the spouse has met his out of pockets by 5/09. The couple both turn 65 by 6/09.
QUESTION:
1. DOES THIS COUPLE THEN HAVE TO MEET NEW DEDUC AND NEW OUT OF POCKETS FOR MEDICARE???
YES OR NO
2. DO THE DEDUC AND OUT OF POCKETS MET PRIOR TO TURNING 65 TO STRS COUNT FOR THE YEAR AND CONSEQUENTLY NO NEW DEDUC AND OUT OF POCKETS NEED TO BE PAID?
YES OR NO
3. IN THIS SCENARIO, THIS SPOUSE OF THIS COUPLE CONTINUES TO RECEIVE COVERAGE AT 100% BECAUSE OF PAYING OUT OF POCKETS AND DEDUC IN 2009 EVEN THOUGH CHANGING STATUS FROM NON MEDICARE TO MEDICARE STATUS????
YES OR NO
I can't believe I cannot receive an answer when so many Medicare recipients have gone thru this process with STRS. So, I am opening the question to all.
Thank you. Molly J.