The federal Medicare program was established in 1965 to provide health care coverage to people who were 65 years of age or older. The coverage applied no matter their health or medical history. Seven years later, Medicare expanded to cover individuals with a long-term disability.
Recent legislation issued changes to Medicare for coverage years 2019 and 2020. One such legislation is the Bipartisan Budget Act of 2018 (BBA), which sought to close existing gaps in coverage for Medicare. in February 2018, the BBA made changes to the Part D Coverage Gap Discount Program established by the Affordable Care Act (ACA). The BBA’s revision aims to help fill the “donut hole” in 2019, which is a year earlier than the ACA was expected to fill the coverage gap in 2020.
Additionally, the Centers for Medicare and Medicaid (CMS) expanded the list of supplemental benefits that can be offered Medicare Advantage. Medicare Advantage is an alternative to Original Medicare, providing coverage for Part A and Part B as well as additional, supplemental benefits such as dental, vision and prescription drug coverage. The new guidelines provide the opportunity for insurance companies that offer Medicare Advantage plans to cover additional benefits.
The changes to Medicare for 2019 and 2020 affect many different areas of coverage for Medicare beneficiaries.
Overview of Medicare
Medicare is the federal health insurance program offering coverage for individuals who are 65 years of age or older, people with disabilities or people with end-stage renal disease. Medicare has four main parts:
- Part A: Hospital insurance for inpatient hospital stays, hospice care, home health or a skilled nursing facility.
- Part B: Medical insurance for outlined doctors’ services, covered medical supplies, outpatient care and preventative services.
- Part C: This type of Medicare brings together Part A and Part B. It also generally includes Part D but not always.
- Part D: Prescription drug coverage that beneficiaries can add from an original Medicare plan, Medicare cost plan, private-fee-for-service plans or medical savings account plans.
Approved insurance companies offer and administer Medicare Advantage (Part C) and Prescription Drug (Part D) plans. Insurance agents can help individuals with understanding their needs and helping them choose the plan that best fits their needs.
Reinterpretation of Medicare Advantage Supplemental Coverage
On April 27, 2018, the Centers for Medicare and Medicaid Services issued a letter to Medicare Advantage organizations that outlined reinterpretation of Medicare Advantage. The letter explained how the scope for Medicare Advantage had been only for primary health-related benefits. However, that definition would expand for coverage year 2019 to include additional services if the insurance company is interested in doing so.
To begin offering these additional services and coverages, the insurance company must outline the information within their Evidence of Coverage (EOC) so that plan participants have a clear understanding of what is covered and what is not.
Filling the “Donut Hole”
The “
donut hole” referred to a gap in coverage for Medicare Part D prescription drug coverage. Beneficiaries with this plan had to pay for all prescription drug costs after reaching a certain spending level. This left some beneficiaries with hefty drug costs as they had to foot the bill for their medicine at 100 percent once reaching their maximums.
Under the Bipartisan Budget Act (BBA), brand-name drug manufacturers will be required to pay 70 percent of the drugs for those covered by Medicare. Previously, they were required to pay 50 percent. With higher coverage on behalf of the manufacturers, it will now be harder for beneficiaries to fall into this donut hole gap.
When beneficiaries are within the donut hole, they’ll pay 37 percent of the plan’s cost for generic drugs and 25 percent for brand name medications.
Rehabilitative Therapy Changes
Under the new regulations, there is no longer a payment cap for outpatient therapies, such as physical, occupational or speech therapy. This change was made effective Jan. 1, 2018. An additional part of this change includes adjustments to the review process for deciding whether such services are medically necessary, which provides expanded access to these services for those who need it.
Telehealth Changes
The BBA put greater emphasis on telehealth to improve and expand the services offered. Under the new guidelines, a Medicare beneficiary may originate telehealth treatment from their home or other living space. Previously, there had been some limitations as to where a patient could initiate these services.
Coverage for Speech-Generating Devices
Medicare coverage is now guaranteed for speech-generating devices. This now makes speech-generating devices fall under the routinely purchased durable medical equipment category to ensure patients that need them have proper access to these devices.
Increased Premiums for High-Income Beneficiaries
To cover these added benefits and costs of Medicare, the premiums for higher-income beneficiaries increased from 80 percent to 85 percent. Higher-income beneficiaries are individuals with a modified adjusted gross income of more than $500,000 or for couples with income of $750,000 or more. This applies to both Medicare Part B and Part D.
Eligible Coverage Under the Expansion of Medicare Advantage
According to a
letter CMS distributed in 2018 titled “Reinterpretation of ‘Primarily Health Related’ for Supplemental Benefits” there are nine new areas that Medicare Advantage plans can cover. Here’s what the letter said about expanding these coverages:
“Beginning in CY 2019, CMS is expanding the definition of ‘primarily health related’ to consider an item or service as primarily health related if it is used to diagnose, compensate for physical impairments, acts to ameliorate the functional/psychological impact of injuries or health conditions, or reduces avoidable emergency and healthcare utilization.”
The following areas are now an option for Medicare Advantage plans:
- Adult Day Care Services
- Home-Based Palliative Care
- In-Home Support Services
- Support for Caregivers of Enrollees
- Medically-Approved Non-Opioid Pain Management
- Stand-alone Memory Fitness Benefit
- Home & Bathroom Safety Devices & Modifications
- Transportation
- Over-the-Counter (OTC) Benefits
This change was effective for 2019, but according to
AARP, most insurers did not add coverage for these supplemental coverages in the first available plan year.
The limited adoption in 2019 does not come as a huge surprise though, due to the timing of the announcement that communicated the approval of these new benefits. Insurers only had a few months to update plans from the time of the announcement until enrollment for 2019 began.
Due to the fact that all plans must undergo review and updates in accordance with the new guidelines, it is expected that many insurers will also update their Medicare Advantage coverage at the same time. So look for these added eligible coverage options within plan year 2020.
As we approach open-enrollment, it is important to understand these changes to better assist your customers. WebCE can help with a variety of Medicare-related courses updated with this new information. To learn more, visit
www.webce.com or call 877.488.9308 to speak to our knowledgeable support services team.
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