Insurance 101 For Dialysis Social Workers
This blog post was made by Beth Witten, MSW, ACSW, LSCSW on July 2, 2020. Revised February 5, 2023 (Reviewers Mary Beth Callahan, ACSW/LCSW-APHSW-C and Lara Tushla, LCSW, NSW-C)
U.S. health plan choices are complex, with many confusing rules. If staff who educate patients about their health insurance options do not know all the rules, they may provide information that does not meet a patient’s needs. When federal agency staff tell patients something that is not true, there may be recourse through “equitable relief.” However, if dialysis or transplant staff tell patients something that isn’t true, the patient could be harmed—in some cases for months or years—and may have little or no recourse. I hope this post will reduce the chance of sharing inaccurate information with patients.
Who can get Medicare
Most U.S. citizens who have kidney failure can get Medicare if they have enough work credits. A spouse or dependent child of a person with enough work credits can get Medicare too. Some patients may only need 6 credits; others will need more based on their age and when they had kidney failure.1 Those over age 62 need 40 credits. The Social Security Administration (SSA) staff can tell patients if they have enough work credits. Legal immigrants with work credits who have lived in the U.S. for 5 continuous years when they apply can get Medicare too.2
Who can get a Medicare Advantage plan
In the past, people on dialysis could only buy a special needs MA plan that accepted people on dialysis. As of January 2021, people on dialysis can buy any MA plan in their area.3
Who cannot get or use Medicare
Patients who are not in the U.S. legally or who came legally to the U.S. less than 5 years before applying cannot get Medicare. Prisoners can apply for and have Medicare while in prison. However, Medicare is suspended while they are incarcerated, will not pay for care, and a prisoner must still pay the premium to keep it. The prison system—not Medicare—pays for a prisoner’s dialysis or transplant care. 4
When Medicare can start
For patients who do standard in-center hemodialysis (HD), Medicare always starts on the first day of a month, after a 3-month qualifying period. When a patient starts training for PD, home HD, or in-center self-care HD before the end of the qualifying period, Medicare can start on the first day of the first month of dialysis. When planning home training, be aware that the 3-month clock starts when the patient gets his/her first regular dialysis treatment—no matter where the dialysis occurs.5
According to CMS, “Medicare coverage can begin the month you’re admitted to a Medicare-certified hospital for a kidney transplant (or for health care services that you need before your transplant) if your transplant takes place in that same month or within the next 2 months.”6 In transplant social workers’ experience, Medicare is rarely backdated.
When Medicare ends
Patients who stop dialysis usually live only a few days or weeks. Those who stop because they recover enough kidney function to no longer need it keep Medicare for 12 months after the month they stopped treatment. Medicare ends 36 months post-transplant unless the patient also has Medicare due to age or disability as well as ESRD.7
Who pays first when a patient has work-based group insurance
Medicare can be the primary or secondary payer for dialysis and transplant. Medicare is the primary payer when a patient:
Has an individual health plan
Is 65+ and has a retiree plan that was paying secondary to Medicare prior to ESRD8
Medicare pays second when a patient:
Is covered by a job-based health plan as a current or former worker, spouse or dependent
Currently job-based health plans—including COBRA—pay first for 30 months under the Medicare secondary payer (MSP) rule. The MSP clock starts when the patient could get Medicare even if s/he doesn’t enroll. It is essential to keep track of when the 30-months will end, to make sure the patient applies for Medicare in time for it to take effect when the group plan switches to secondary. This is even more important if the patient took Part A without Part B because s/he can only enroll in Medicare Part B during the general enrollment period of January through March, and as of 2023, Part B and premiums for it start the month after the patient signs up.
Medicare as the primary payer
Part A covers inpatient care for a limited time after a deductible. There are copays for days after 60. Part A covers 100% transplant surgery for the patient and living donor. NOTE: Physician services provided to inpatients are billed under Part B, not Part A, so they are subject to the Part B deductible and 20% coinsurance unless the patient has another plan that covers any of those costs..
Part B covers outpatient care at 80% after the Part B deductible is met. This includes dialysis, doctors and more. It also covers anti-rejection drugs if the patient had Part A the month of transplant and currently has Part B.
Part B ID is a new benefit for transplant recipients who are losing or lost Medicare for ESRD after 3 years post-transplant. The benefit is for those who are not eligible for Medicare due to age or disability and have no other health plan. To qualify, they must have had Part A the month of their transplant and received the transplant in a Medicare approved transplant program.
Part B-ID covers anti-rejection drugs ONLY.
Part B-ID has a premium and pays 80 for those drugs after the patient meets the annual Part B deductible.10
Each year Original Medicare sets an “allowed” amount under the ESRD prospective payment system (PPS) for a “bundle of services” for in-center or home dialysis, certain dialysis-related drugs and lab tests. Dialysis clinics often bill other payers much more than Medicare allows, but they must agree to “accept assignment” of Medicare benefits. This means they will accept 100% of what Medicare allows as full payment. So, the most a patient with Original Medicare and no other plan will owe for dialysis is 20% after the annual Part B deductible is met. Medigap, secondary insurance, and Medicaid plans can help pay these costs. If a patient doesn’t have a plan to help with Original Medicare s/he will need to pay the Part B deductible and 20% coinsurance for dialysis and anti-rejection drugs.11 Some states limit access to Medigap plans to people under 65. In other states those under 65 may only get Medigap Plan A—which does not cover the Part A or B deductibles.
Medicare as a secondary payer
Until 1981, Medicare always paid first for dialysis. In 1981, Medicare started paying secondary to group plans. At that time, the Medicare secondary payer (MSP) period was 12 months. But the MSP period was extended to 18 months in 1993, then to 30 months in 1997.12 Dialysis companies regularly lobby for the MSP period to be extended farther, arguing that private plans are better for patients than Medicare.13 However, a large dialysis organization reported in 2019 that 10.5% of its patients had private plans—which made up 33% of its revenue—and says it loses $21 per treatment on Medicare-only patients.14
Medicare may not actually pay anything when it is a secondary payer. But when a provider accepts Medicare assignment and a primary payer pays at least 100% of Medicare’s allowed charge, the provider must write off any billed amount over that: it cannot balance-bill. The savings to a patient from that write-off can be more than the Part B premium.
Ask your patients to keep a log of dates, SSA personnel, and what they say when they speak to someone. The Social Security Administration (SSA) advises staff to tell those with job-based health plans to enroll in Part A and B together or wait to enroll in both when the 30-month MSP period ends.15 A patient who is not given this advice can request “equitable relief” to try to get Part B sooner.16 Or, patients who are not getting cash benefits and whose Part A paid no claims to pay back may be able to ask SSA to withdraw their Medicare Part A application and enroll them in Parts A and B at the same time.17
Pros and cons of Medicare Advantage plans
MA plans may cover things Original Medicare doesn’t cover, such as some vision, dental, and even some rides. However, patients need to understand trade-offs.
They could get large surprise bills unless they always get in-network services. For example, out-of-network doctors may work at in-network hospitals. In-network dialysis clinics may not offer all dialysis options. Transplant hospitals may be limited. A law that took effect in 2022 ensures that people are entitled to receive out-of-pocket estimates prior to a visit or procedures. However, that does not protect them from the actual bill, as many people may not have a choice but to have the care anyway. 18
Patients can owe and pay more if dialysis, labs, and drugs are not bundled in an MA plan like they must be in Original Medicare.
Each year, CMS sets a cap on how much MA plans can charge for Part A and B services from network providers and non-network providers when plans cover non-network providers’ services. In 2023, that “maximum out of pocket” cap was set at $8,300 for in-network providers and $12,450 for in-network and out of network providers if the plan allowed members to get services from non-network providers. Some MA plans set a lower cap. This cap does not include any MA plan premiums or Part D drugs. Medigap plans don’t work with MA plans and some state programs that help pay for drugs will not help those with MA plans.
Medicare Savings Programs
When patients with low-income and assets have Medicare, they may be able to get help paying for the Medicare premiums and/or out-of-pocket costs with a Medicare savings program.
The Qualified Medicare Beneficiary (QMB) program pays Part A and B premiums and out-of-pocket costs.
The Specified Low-Income Medicare Beneficiary (SLMB) and Qualified Individual (QI) programs both pay Part B premiums only.
Patients in one of these programs get “extra help” to pay Part D premiums and drug costs (see Part D below). Patients apply through their Medicaid agency.19 They can also apply for “extra help” (low income subsidy) by calling Social Security toll-free at 800-772-1213 or by applying online at https:www.ssa.gov/benefits/medicare/prescriptionhelp.html.
Medigap plans (also called Medicare Supplements)
Medigap plans work only with Original Medicare. Those who turn 65 can buy a Medigap plan during the first 6 months they have Part B without a waiting period and regardless of their health history. A Medigap plan helps to pay Medicare’s out-of-pocket costs.20 More than half of states require companies that sell Medigap plans to those 65 and older to sell at least one plan to those with Medicare and ESRD who are under 65.21
Medicare Part D
Insurance companies sell Medicare Part D plans.22 Patients with Medicare A and/or B who do not have drug coverage that is as good as Part D, e.g., those with a job-based health plan, should apply for a Part D plan right away—or may face a premium penalty of 1% per month added to the national base Part D premium. The penalty continues indefinitely. Job-based plans that include drug coverage must notify Medicare patients each year before Part D open enrollment if their drug coverage is as good as Part D and if signing up for Part D will affect other health coverage in that plan. Those with low-income and assets can apply to get extra help through SSA to pay premiums and drug costs.23 Some drugs are included in Original Medicare’s payment for dialysis and must be provided by dialysis clinics.24
People who work for companies with 20+ employees may be eligible for COBRA if they have certain changes in their status, such as termination from the job (unless it was for gross misconduct) or a reduction in hours.25 A spouse or dependent child may be eligible for COBRA if the worker dies, there is a legal separation or divorce, or an employee gets Medicare. Some states offer continuation of coverage for those working in smaller companies. COBRA pays primary for 30 months of Medicare eligibility, just like other job-based health plans.
COBRA coverage for the eligible worker continues for 18 months and can be extended for another 11 months if a worker is disabled. A spouse or dependent child can keep COBRA for 36 months. COBRA premiums are costly because the employer pays nothing. An administrative fee can also be added to the premium, and if the worker wants the extra 11 months of COBRA coverage (total 29 months), the premium during those 11 months is 50% higher.
Medicaid (Medi-Cal in California)
Some state Medicaid programs are fee-for-service, while others are managed care, requiring patients to use certain providers. Medicaid covers dialysis, covered drugs, non-emergency medical transportation, and more. Financial guidelines vary from state-to-state.26 Many states let the “medically needy” who have high healthcare costs use those bills to meet a spend down. Once spend down is met, Medicaid will pay bills for covered services that were not used to meet the spend down.27 Some states let working people pay a premium for Medicaid.28
As of November 2022, all but 11 states had expanded Medicaid to cover residents who are U.S. citizens. In most expansion states, income can be up to 138% of federal poverty. Some states allow higher income.29 What the state covers under expanded Medicaid may be different from under regular Medicaid and some states require people who get expanded Medicaid to work.
Qualified Health Plans (QHPs) under the Affordable Care Act (ACA)
Patients may start dialysis with an ACA plan.30 The plan they have will be labeled with a “metal” level. In general, plans with the lowest premiums have the highest out-of-pocket costs and vice versa.
Bronze – 60% of costs
Silver – 70% of costs
Gold – 80% of costs
Platinum – 90% of costs
Patients who meet financial guidelines can get subsidies to help pay out-of-pocket costs—if they choose a Silver plan. Those whose income is 400% of federal poverty or less can get a premium tax credit to reduce the monthly premium or a refund when taxes are filed. The premium tax credit works for any plan.31
Patients who qualify for Medicare when they have a QHP, can choose to keep their QHP or enroll in Medicare. If a patient’s QHP is through a job, (called “SHOP”), it pays 1st before Medicare for 30 months like any other job-based plan. Medicare does not coordinate benefits with an individual QHPs. Once a patient enrolls in Medicare, any help they were getting before for out-of-pocket costs and premiums will end. If a patient with a QHP chooses not to enroll in Medicare, s/he will pay a higher premium for Part B later.32
2 Social Security Administration Program Operations Manual System. Residence and Citizenship/Alien Status Requirements. https://secure.ssa.gov/apps10/poms.nsf/lnx/0600801061
3 Contract Year 2021 Medicare Advantage and Part D Final Rule (CMS-4190-F1) Fact Sheet. https://www.cms.gov/newsroom/fact-sheets/contract-year-2021-medicare-advantage-and-part-d-final-rule-cms-4190-f1-fact-sheet
4 Social Security Administration Program Operations Manual System. Illustrations. https://secure.ssa.gov/apps10/poms.nsf/lnx/0600620070#c
5 Social Security Administration Program Operations Manual System. Date of Entitlement – Dialysis. https://secure.ssa.gov/apps10/poms.nsf/lnx/0600801216
6 Centers for Medicare & Medicaid Services. Medicare Coverage of Kidney Dialysis & Kidney Transplant Services. https://www.medicare.gov/Pubs/pdf/10128-Medicare-Coverage-ESRD.pdf
7 Social Security Administration Program Operations Manual System. Termination of R-HI. https://secure.ssa.gov/apps10/poms.nsf/lnx/0600820030
8 Retiree Insurance. https://www.medicare.gov/supplements-other-insurance/retiree-insurance
9 When does Medicare coverage start. https://www.medicare.gov/basics/get-started-with-medicare/sign-up/when-does-medicare-coverage-start
10 Organ Transplants. https://www.medicare.gov/coverage/organ-transplants
11 How to compare Medigap policies. https://www.medicare.gov/supplements-other-insurance/how-to-compare-medigap-policies
13 Witten B. Pro: Dialysis Patients Dodged a Bullet When Medicare Secondary Payer was NOT Extended. https://homedialysis.org/news-and-research/blog/282-pro-dialysis-patients-dodged-a-bullet-when-medicare-secondary-payer-was-not-extended
15 Ibid. Social Security Administration Program Operations Manual System. Medicare as Secondary Payer for ESRD Benefits.
16 Social Security Administration Program Operations Manual System. Conditions for Providing Equitable Relief. https://secure.ssa.gov/apps10/poms.nsf/lnx/0600805170
17 Social Security Administration Program Operations Manual System. Withdrawal of Application. https://secure.ssa.gov/apps10/poms.nsf/lnx/0600801197
19 Medicare. Medicare Savings Programs. https://www.medicare.gov/your-medicare-costs/get-help-paying-costs/medicare-savings-programs
20 Medicare. What’s Medicare Supplement Insurance (Medigap). https://www.medicare.gov/supplements-other-insurance/whats-medicare-supplement-insurance-medigap
21 Medicare. When Can I Buy Medigap? https://www.medicare.gov/supplements-other-insurance/when-can-i-buy-medigap See I'm under 65 and am eligible for Medicare because of a disability or End-Stage Renal Disease (ESRD).
23 Social Security. Extra Help with Medicare Prescription Drug Plan Costs. https://www.ssa.gov/benefits/medicare/prescriptionhelp/
24 Centers for Medicare & Medicaid Services. ESRD PPS Consolidated Billing. https://www.cms.gov/Medicare/Medicare-Fee-for-Service-Payment/ESRDpayment/Consolidated_Billing
25 United States Department of Labor. An Employee’s Guide to Health Benefits Under COBRA. https://www.dol.gov/sites/dolgov/files/ebsa/about-ebsa/our-activities/resource-center/publications/an-employees-guide-to-health-benefits-under-cobra.pdf
26 State Overviews. https://www.medicaid.gov/state-overviews/index.html
27 Centers for Medicare & Medicaid Services. Medicaid Eligibility. https://www.medicaid.gov/medicaid/eligibility/index.html
28 National Council on Aging. Medicaid Buy-in for Workers with Disabilities. https://www.benefitscheckup.org/fact-sheets/factsheet_medicaid_oh_buyin_disable_worker/#/ HHS Administration for Community Living and the DOL Office of Disability and Employment Policy. Medicaid Buy-in Q&A. https://www.dol.gov/sites/dolgov/files/odep/topics/medicaidbuyinqaf.pdf
29 Kaiser Family Foundation. Status of State Action on Medicaid Expansion Decision. https://www.kff.org/health-reform/state-indicator/state-activity-around-expanding-medicaid-under-the-affordable-care-act/
30 Qualified Health Plan. https://www.healthcare.gov/glossary/qualified-health-plan/
31 How to pick a health insurance plan. The ‘metal’ categories: Bronze, Silver, Gold and Platinum. https://www.healthcare.gov/choose-a-plan/plans-categories
32 Frequently Asked Questions about Medicare and the Marketplace. (Updated April 28, 2016) https://www.cms.gov/Medicare/Eligibility-and-Enrollment/Medicare-and-the-Marketplace/Downloads/Medicare-Marketplace_Master_FAQ_4-28-16_v2.pdf