Costs in the Coverage Gap

Most Medicare Prescription Drug Plans have a coverage gap (also called the “donut hole”). This means there’s a temporary limit on what the drug plan will cover for drugs.

Not everyone will enter the coverage gap. The coverage gap begins after you and your drug plan have spent a certain amount for covered drugs. In 2015, once you and your plan have spent $2,960 on covered drugs (the combined amount plus your deductible), you’re in the coverage gap. In 2016, once you and your plan have spent $3,310 on covered drugs, you’re in the coverage gap. This amount may change each year. Also, people with Medicare who get Extra Help paying Part D costs won’t enter the coverage gap.

Once you reach the coverage gap in 2015, you’ll pay 45% of the plan’s cost for covered brand-name prescription drugs. You get these savings if you buy your prescriptions at a pharmacy or order them through the mail. The discount will come off of the price that your plans has set with the pharmacy for that specific drug.

Although you’ll only pay 45% of the price for the brand-name drug in 2015, 95% of the price—what you pay plus the 50% manufacturer discount payment—will count as out-of-pocket costs which will help you get out of the coverage gap. What the drug plan pays toward the drug cost (5% of the price) and what the drug plan pays toward the dispensing fee (55% of the fee) aren’t counted toward your out-of-pocket spending.

Example: Mrs. Anderson reaches the coverage gap in her Medicare drug plan. She goes to her pharmacy to fill a prescription for a covered brand-name drug. The price for the drug is $60, and there’s a $2 dispensing fee that gets added to the cost. Mrs. Anderson will pay 45% of the plan’s cost for the drug ($60 x .45 = $27) plus 45% of the cost of the dispensing fee ($2 x .45 = $0.90), or a total of $27.90, for her prescription. $57.90 will be counted as out-of-pocket spending and will help Mrs. Anderson get out of the coverage gap because both the amount that Mrs. Anderson pays ($27.90) plus the manufacturer discount payment ($30.00) count as out-of-pocket spending. The remaining $4.10, which is 5% of the drug cost and 55% of the dispensing fee paid by the drug plan, isn’t counted toward Mrs. Anderson’s out-of-pocket spending.

In 2015, Medicare will pay 35% of the price for generic drugs during the coverage gap. You’ll pay the remaining 65% of the price. What you pay for generic drugs during the coverage gap will decrease each year until it reaches 25% in 2020. The coverage for generic drugs works differently from the discount for brand-name drugs. For generic drugs, only the amount you pay will count toward getting you out of the coverage gap.

Example: Mr. Evans reaches the coverage gap in his Medicare drug plan. He goes to his pharmacy to fill a prescription for a covered generic drug. The price for the drug is $20, and there’s a $2 dispensing fee that gets added to the cost. Mr. Evans will pay 65% of the plan’s cost for the drug and dispensing fee ($22 x .65 = $14.30). The $14.30 amount he pays will be counted as out-of-pocket spending to help him get out of the coverage gap.
If you have a Medicare drug plan that already includes coverage in the gap, you may get a discount after your plan’s coverage has been applied to the price of the drug. The discount for brand-name drugs will apply to the remaining amount that you owe.
Items that count towards the coverage gap: Your yearly deductible, coinsurance, and copayments, the discount you get on brand-name drugs in the coverage gap and what you pay in the coverage gap
Items that don’t count towards the coverage gap: The drug plan premium, pharmacy dispensing fee and what you pay for drugs that aren’t covered.


The Five-Star Rating System and Medicare Plan Enrollment

Part D drug plans and Medicare Advantage plans vary greatly in terms of costs and coverage.  Each January, plans change their coverage and costs for the new calendar year.  Every fall, you should go over your plan’s coverage and compare it with other plans in your area to make sure you have the coverage that is best for you. Examine a plan’s coverage, costs, drug coverage and the pharmacies in its network to see if it best meets your needs.  After considering those factors, you can use the plan’s star rating from Medicare to help you select a plan that’s right for you.

What are the Medicare Star Ratings?
Medicare uses a Star Rating System to measure how well Medicare Advantage and prescription drug (Part D) plans perform. Medicare scores how well plans did in several categories, including quality of care and customer service. Ratings range from 1 to 5 stars, with five being the highest and one being the lowest score. Medicare assigns plans one overall star rating to summarize the plan’s performance as a whole. Plans also get separate star ratings in each individual category reviewed. The overall star rating score provides a way to compare performance among several plans. To learn more about differences among plans, look at plans’ ratings in each category.

Medicare reviews plan performances each year and releases new star ratings each fall. This means plan ratings change from one year to the next. Medicare sets the categories and reviews each plan the same way. You should look at coverage and plan costs, such as if the Part D plan covers all the drugs you take and has a premium you can afford before you consider the star rating.

Medicare health plans are rated on how well they perform in five different categories: Staying Healthy: Screenings, Tests, and Vaccines, Managing Chronic (Long-Term) Conditions, Plan Responsiveness and Care, Member Complaints, Problems Getting Services, and Choosing to Leave the Plan, Health Plan Customer Service

Medicare drug plans are rated on how well they perform in four different categories:
Drug Plan Customer Service, Member Complaints, Problems Getting Services, and Choosing to Leave the Plan, Member Experience with Drug Plan, Drug Pricing and Patient Safety


Redlands Market Night – New Health Insurance Kiosk

Redlands Market Night - Litchfield InsuranceAfter more than 18 years of service at this weekly, premier Inland Empire venue, we’ve expanded and added a 2nd booth. Located directly in front of our offices in the CitiBank Building in beautiful downtown Redlands.

Because of all the confusion over Health Care Reform aka ObamaCare we’ve had several dozen individuals over the last two weeks approach us for assistance when the new health insurance marketplace opens on Oct. 1st. You may ask me, ” George, do you think it’s gonna work?”. I’m glad you asked.

No one knows for sure how the new federal health care law is going to pan out. All I know is our commitment to help our Valued clients get the coverage and protection they need and desire has never been greater, Whether it’s in regard to Medicare or individual health and life insurance, we’re here for the long haul.

2013-07-17_1121We are also excited about this new Dental Plan we’re offering now, with low copays, that also includes Vision and RX benefits. ( Medicare Open Enrollment is still Oct. 15- Dec. 7th ).

On a personal note, some of you met our wonderful granddaughter Payton at our open house this year. Well, she starts school this month. Wow!…do they grow up fast!!…Enjoy these “Dog Days of Summer”…You are much appreciated.


All the Best,



How to Appeal a Medicare Decision – Redlands CA, Yucaipa CA


I hope all is well with you. Below in the article is some useful information for you or someone you know that is on Medicare.

Have you ever had these questions come up?

How do I Appeal a Medicare Decision?

When can I appeal a payment or coverage decision?

What happens if I decide to file an appeal?

What’s the first step of filing an appeal?

If so this article has the answers for you.  And if you haven’t this could be valuable information for the future.

Have a wonderful day!

George Litchfield
Medicare Plan Specialist

Call me today at 888-891-5557



Medicare - Redlands CA - George LitchfieldAn appeal is the action you can take if you disagree with a coverage or payment decision by Medicare or your Medicare plan. That decision can be made by Medicare or by the private Medicare-approved health plan that administers your Medicare Advantage (MA/MAPD) plan, prescription drug plan (PDP) or special needs plan (SNP).

When can I appeal a payment or coverage decision?

You can file an appeal if Medicare or your plan denies one of the following:

  • Your request for a health care service, supply, item or prescription that you think you should be able to get.
  • Your request for payment for health care service, supply, item or a prescription drug you already got.
  • Your request to change the amount you must pay for a health care service, supply, item, or prescription drug.

You can also appeal if Medicare or your plan stops providing or paying for all or part of an item or service you think you still need.

What happens if I decide to file an appeal?

If you decide to appeal, first ask your doctor, health care provider or supplier for any information that may help your case. See your plan materials, or contact your plan for details about your appeal rights. Medicare and all companies that provide Medicare plans are required to help you file an appeal.

The appeals process for all types of Medicare plans has five levels. At each level, a decision about your appeal is made and communicated to you in a letter. If you disagree with the decision made at any level of the process, you can generally go to the next level. At each level, you’ll be given instructions in the decision letter on how to move to the next level of appeal.

What’s the first step of filing an appeal?

Although we won’t go through all five steps of an appeal process, we can describe the first step. How you file an appeal depends on the type of Medicare coverage you have. But no matter what type of Medicare plan you have, at any step of the appeals process, you can—and may want to—ask your doctor, health care provider or supplier for any information that may help your case, or other help.

Original Medicare

If you’re on Original Medicare, then every three months you’re mailed a Medicare Summary Notice, or “MSN.” An MSN shows all services or supplies that health care providers and suppliers billed to Medicare for your care during the three-month period. It shows what Medicare paid, and what you may owe the provider. You can also view your MSNs electronically on

Your first step is to find the MSN that shows the service or supply you’re appealing. You then have two options to file the appeal:

1. Fill out a Redetermination Request Form (PDF). Send it to the Medicare contractor at the address listed in the “Appeals Information” section of your MSN. Or, you can…

2. Follow the instructions on the back of your MSN, and send the request for an appeal without the Redetermination Request Form. You provide the same types of information as what’s asked for on the form, and send it to the Medicare contractor listed.

Generally, you get a decision from your Medicare contractor within 60 days after they get your request. The decision is called a “Medicare Redetermination Notice,” and it can come as a separate notice or as part of your MSN.

Medicare Advantage Plan (Part C)

You have the right to ask the company that administers your Medicare Advantage plan to pay for, or cover, health care services or items you believe should be covered. This request for services or supplies is called an “organization determination.” You can either ask for a determination yourself, or have your doctor or someone representing you ask for one.

Organization determinations typically take 14 days. If you or your doctor thinks your health could be harmed by waiting that long, you can ask for an “expedited” or fast determination. Then your health plan has 72 hours to give you a decision.

Your plan can approve your request, or partially or fully deny it. Your plan will send you a written notice explaining why, and give you information on how to file an appeal. This process may vary depending on your plan, so follow the instructions provided. However, regardless of your plan, you are allowed to ask for a copy of your file containing medical and other case information.

Medicare Prescription Drug Plan (Part D)

Appealing a decision for a Part D plan typically means working with your plan to get coverage for a prescription drug that you feel you need. As with a Medicare Advantage plan, this usually involves either you or your doctor (or representative) working directly with the company that administers your Part D plan.

Prescription drug coverage relates primarily to your plan’s formulary, or drug list. For more information, see the previous Medicare Made Clear blog post Medicare won’t cover a prescription I need—what now?.

Medicare Special Needs Plan (SNP)

Your Medicare SNP needs to tell you in writing how to file an appeal. After you file an appeal, the plan reviews its original decision. If your plan doesn’t decide in your favor, the appeal is reviewed by an independent organization that works for Medicare, not for the plan.

–This information was provided by Medicare Made Clear

Georgelitchfield – If you or someone in your family is 65 or older and is in need of a Medicare Supplemental Plan or already has a plan, but wants to make sure that it is the right plan please give us a call (888)891-5557 or go to our website  and we will give you a quote and help you keep money in your pocket.


New Medicare Guides Provide Latest Information

babyboomersIt’s a new year, and that often means a few changes in Medicare. Changes may include new covered services, adjustments to out-of-pocket costs and more.

Medicare Made Clear offers two educational guides that may help you get up to speed on Medicare for 2013. Both are available to download free.

This is a comprehensive introduction to Medicare. It begins with a simple explanation of ten key facts for understanding the program. It goes on to talk about enrollment and the two ways you can get Medicare—through Original Medicare run by the federal government or through a private Medicare Advantage plan.

Once you’re through the basics, the Show Me Guide explains the parts of Medicare, what each covers and your cost-sharing responsibilities. Examples, colorful graphics and clear answers to common questions help make the information come to life. There’s even a decision road map to help you think through your Medicare needs and find a plan that works for you. The guide ends with a list of resources and a Medicare glossary.

This guide may help give you a solid foundation for understanding Medicare and your choices. It’s a great reference to keep in your Medicare file.

Some people like to get right to the point. They don’t need to know the details right away. They would rather get an overview and have the choice to go deeper. If you are one of these people, then the Getting Started With Medicare guide may be for you.

This guide covers the basics about Parts A, B, C and D as well as supplement insurance—one page for each. It provides a list of questions that may help you understand your coverage needs and make a confident choice. Then it gives you a worksheet to help you find and compare the plans you are interested in side by side.

Getting Started With Medicare is a hands-on tool. It walks you through the steps you can take to help find the plan that’s right for you.

–This information was provided by Medicare Made Clear– If you or someone in your family is 65 or older and is in need of a Medicare Supplemental Plan or already has a plan, but wants to make sure that it is the right plan please give us a call (888)891-5557 or go to our website and we will give you a quote and help you keep money in your pocket.

Choosing a Medicare Plan: How Juanita Decided

Medicare offers a lot of choices. Does Original Medicare Parts A and B provide the coverage you need? What options are available to help with expenses like deductibles and prescription drug coverage? It might be helpful to make a list of your most important coverage needs before you research or enroll in a plan. Then you can compare those needs with what’s available in your area. In this post, you’ll meet Juanita1and learn why a combination of plans met her specific needs.

About Juanita

Juanita will be 65 in three months. This means her Medicare Initial Enrollment Period has just started. When she turns 65, she plans to retire. This will give her the freedom to spend a lot of time out-of-state visiting her children and grandchildren in California. Juanita is in good health, although she takes one drug to keep her bones strong and another to keep her cholesterol levels in check. Juanita has a comfortable pension, but she wants to leave a financial legacy to her family.

Juanita’s Medicare Wish List

  • Flexibility to visit doctors and hospitals when she’s out of state visiting her family
  • Help paying for her prescription drugs
  • Significant help paying for extra out-of-pocket costs if they’re large

Juanita’s Choices – A Combination of Plans

Juanita actually chose three different Medicare plans to meet her specific needs: Original Medicare (Part A and Part B), a standalone Part D prescription drug plan. Rounding out her choices was a Medicare supplement insurance plan.

Original Medicare, consisting of Part A and Part B, provides the medical and hospital coverage Juanita wanted. Part A is generally thought of as “hospital insurance.” It pays for hospital stays and follow-up care in a skilled nursing facility, as well as some home health care services and hospice care. Part B helps pay Juanita’s doctor bills, including doctor office visits, most preventive care and many lab tests and screenings. A standalone  Medicare Part D prescription drug plan helps Juanita pay for prescription drugs. Her  Medicare supplement insurance (Medigap) plan will help pay out-of-pocket expenses the other plans won’t cover.

Why was this combination of plans a good choice for Juanita?

  • Original Medicare gave her access to doctors and hospitals throughout the United States
  • A standalone Part D prescription drug plan offered discounted prices on the drugs she takes
  • A Medicare supplement insurance plan provided help with her Medicare Part A and B deductibles and coinsurance

Cost Sharing

The premiums Juanita will pay include a monthly Part B premium, a monthly Medicare Part D prescription drug plan premium and a monthly Medicare supplement insurance premium.

Her Medicare supplement insurance plan will help pay for most of the out-of-pocket expenses not covered by Original Medicare Parts A and B. Juanita pays for her drug plan cost sharing and any costs not covered by her Medicare supplement insurance plan. Remember: this is just an example. For plans outside of Original Medicare Parts A and B, costs can vary from plan to plan. Contact the plan you’re interested in to see what your costs might be.

Make an Informed Decision

Juanita did her homework and got what she needed with a combination of Medicare plan options. It’s a good idea to understand all the parts to Medicare and research specific plan types and combinations. That way, when it’s time to make your plan selection, you can make an informed, confident choice.

1 Fictional character created to show a specific set of Medicare needs and coverage options.

–This information was provided by Medicare Made Clear – Turning 65 ? Looking for reliable Medicare Insurance? or Looking to get better rates. The Litchfield Insurance Agency assists the Beaver Medical Group in Redlands. Whether it be Medicare, Health, Life. Call us today at (888) 891-5557 and we will find the right plan for you.

Serving Redlands, Banning, Yucaipa and the Inland Empire.

Five Tips: Managing your Loved One’s Medicare Benefits

Are you caring for a Medicare-eligible loved one? Or do you expect to care for a loved one in the coming years? Even if your loved one does not yet need a caregiver, it’s a good idea to start planning before the care is necessary. Here are five ideas that may help you fulfill this challenging, rewarding role.

1. Medicare requires written permission in order to share personal information with a caregiver. Discuss filling out the permission form with your loved one. It’s called Medicare Authorization to Disclose Personal Health Information and you can download the form here.

2. Assess your loved one’s health care needs, current coverage and financial situation, and talk about his or her preferences. Document important information your loved one shares: his or her medications, health care provider’s contact information, and any medical conditions and a calendar for care giving tasks. If you share care giving, where you create a private community and share information with individuals you invite.

3. Make sure you understand your loved one’s Medicare plan(s), and think about any changes that might improve your loved one’s health coverage or care. If, for example, you review health care receipts from last year and see that your loved one could benefit from additional coverage, you may want to look at your loved one’s Medicare plan choices and consider helping them switch plans or add a rider. Or perhaps your loved one qualifies for financial assistance, but hasn’t yet applied to receive it.  Where can you learn more about your love one’s plan(s), options, and learn how to make changes? explains how Medicare works, and explains financial assistance programs. If your loved one has a Medicare Advantage or Medicare Supplement plan, contact the provider to learn the details. can help you learn about plans, coverage, financial help, and what you need to do to make a change. The State Health Insurance Assistance Program (SHIP) offers one-on-one counseling and advocacy for Medicare beneficiaries.

4. Take advantage of additional care giving resources. Eldercare can help connect you to organizations in your loved one’s community, like adult day care, respite care, training programs and support groups. Call Eldercare at 1-800-677-1116, TTY 711, 9 a.m. to 8 p.m. Eastern Standard Time.

5. Take care of yourself, and get the help you need to stay well. “Respite care” – care provided by others to allow caregivers to take a break – can help you get the rest you need while ensuring that your loved one gets quality care. Short term or long term, in home or out of the home, learn more about respite care options respite care options.

Do I need a Medicare Supplement Insurance Plan?

Are you wondering if you need a Medicare Supplement Insurance Plan?  Below explains why you might want to consider getting a supplement plan.


Medicare Supplement Insurance plans, also known as “Medigap,” provide private insurance coverage that help pay some costs that Original Medicare (Parts A and B) does not cover. But what are the benefits and costs?

Medicare Supplement plans are offered by private insurance companies. The costs and availability vary depending on where you live. Be sure to check with the State Health Insurance Assistance Program (SHIP) in your state for the details that apply to you.


Most states have up to ten Medicare Supplement plans labeled “A” through “N.” These plans help pay for:

  • Part A Deductibles
  • Part B Deductibles
  • Coinsurance and providers’ excess charges
  • Cost of blood transfusions
  • Cost of additional hospital days after you’ve used up your Part A benefits
  • Hospital and skilled nursing facility coinsurance
  • Some preventative care benefits
  • Foreign emergency benefits
  • Some drugs you provider must give you


There is a premium—a monthly cost—for each plan.

Additional costs, if any, vary by plan and insurance provider. Some insurance companies require you to pay a deductible before the plan covers your expenses. In other instances, there may be a copay, an amount you pay for each office visit or trip to the emergency room. In some cases you split the cost with the insurance company until you reach a certain limit (called “coinsurance”).

Tip: The coverage for a given plan type will be the same no matter which insurance company you buy the plan from, but the cost for that exact same coverage may differ between insurance companies. So it’s a good idea to find the plan you’re interested in, then research costs from various companies that serve your area before you apply.

Applying for a Plan

Medicare guarantees you the right to buy any Medicare Supplement plan available where you live for the first 6 months after you become eligible for Medicare and enroll in Part B. After this period ends, the insurer is allowed to consider your health when evaluating your application.

Contact the insurance company that offers the plan you’re interested in for instructions on how to apply. Many companies offer the option to apply online, by phone, or by filling out and sending in forms.

–This information is provided by Medicare Made Clear – Are you a senior age 65+ looking for Medicare Supplemental Insurance? Call 909-790-7748. We will explain your options and find the right plan for you.


Have a Healthy New Year. Plan preventative care and health screenings now.

The new year is a great time to think about your health. Are you due for a screening, like a mammogram or colonoscopy? Is there something you want to do this year to get healthier, like stop smoking or improve your diet? Are you feeling healthy, and just want to make sure you stay that way? Medicare covers a number of preventative and wellness services—whether you belong to Original Medicare or a Medicare Advantage plan—that can help you have a healthy new year.

Wellness visits. One wellness visit is covered every 12 months for Medicare beneficiaries. Print this Preventative Services Checklist; you can track the Medicare-covered tests and screenings you’re eligible for and take a report to your next appointment.

Breast Cancer or Prostate Cancer screenings. All women age 40 and older can get a breast cancer screening mammogram covered once every 12 months. One baseline screening is covered for Medicare-eligible women ages 35 to 39. Men age 50 and older are eligible for one prostate cancer screening every 12 months.

Colon cancer screening. All Medicare beneficiaries are eligible for a screening colonoscopy. All other types of colorectal screenings are available to people with Medicare age 50 and older.

Smoking cessation. Medicare will cover 8 face-to-face smoking cessation visits during a 12 month period. These visits must be provided by a Medicare-recognized practitioner.

Medical nutrition therapy. Medicare covers nutrition therapy services for people diagnosed with diabetes or kidney disease. Therapy covers a nutrition and lifestyle assessment, nutrition counseling, follow-up visits and more.

Flu shots. Medicare covers one flu shot per season in the fall or winter  when given by a Medicare recognized health care provider.

Depression screening. One depression screening is covered per year for Medicare beneficiaries.

These are just a few of the preventative health care services that are covered by Medicare. There is a complete list of preventative services on Medicare’s website.

If you have a Medicare Advantage or Medicare Supplement plan, read your benefit details. Some plans offer additional wellness benefits like gym memberships or discount programs on prescription medications.

Before you receive any health care service, make sure you are seeing a Medicare-recognized health care provider that accepts Medicare assignments. Find and compare doctors, hospitals, plans and suppliers.

What Will You Pay for Medicare Part A and Part B in 2012?

What will be your out-of-pocket costs in 2012 for Medicare Part A and Part B? Read this blog post to find out more.


Medicare provides many benefits, but it isn’t free. You will have out-of-pocket costs, and it’s a good idea to learn what they are to help you avoid unwelcome surprises.

Your Share of Medicare Part A Costs

Medicare Part A covers care received in a hospital or skilled nursing facility. It is premium free for most people. However, you do pay a deductible for each benefit period. In 2012, the deductible is $1,156.00.

After the deductible, Part A pays 100% of covered costs for the first 60 hospital days, and the first 20 skilled nursing facility days, of each benefit period. Multiple hospitalizations may be included in the same benefit period, if they are for the same health problem.

A benefit period begins the day you go into a hospital or skilled nursing facility. The benefit period ends when you haven’t received any inpatient hospital care (or skilled care in a skilled nursing facility) for 60 days in a row.

The table shows your out-of-pocket costs for different services covered under Medicare Part A.

What Will You Pay for Medicare Part A and Part B in 2012?

Your Share of Medicare Part B Costs

Medicare Part B covers doctor visits and outpatient care. You will pay a monthly premium for Part B that is based on your income. In 2012, Part B premiums range from $99.90 to $319.70 a month. The low end rose by $3.50 over the 2011 amount, but most people will see it returned through an increase in their Social Security benefit.

Find your tax filing status and your income in the table to see how much your 2012 premium is.

What Will You Pay for Medicare Part A and Part B in 2012?

In addition to the monthly Part B premium, you will pay an annual deductible of $140 for Part B services in 2012. Some other costs you are responsible for include:

  • 20% of the Medicare-approved amount for doctor services, outpatient therapy and durable medical equipment
  • 20% of the Medicare-approved amount for most doctor services you receive while in the hospital
  • 40% of the Medicare-approved amount for outpatient mental health care
  • Copays or coinsurance amounts for other covered services
  • A coinsurance for most outpatient hospital services

Help Paying for What Medicare Doesn’t

Out-of-pocket costs for a serious illness can mount up quickly. If you have Original Medicare Parts A and B, you can choose to add a Medicare supplement insurance plan (Medigap) to help pay some of these costs. Also, it’s important to know that Original Medicare does not include prescription drug coverage. Many beneficiaries choose to add a prescription drug plan (Part D) to help with the cost of medications.

–This information was provided by Medicare Made Clear

For more answers to your question about the different Medicare upplemental plans call us at (909)790-7748 or 888-891-5557. Visit our website for videos and blogs post with related articles