Understand what type of coverage you have

• Employer-sponsored coverage: Most people with private insurance are covered by an employer-sponsored health plan. An employer-sponsored health plan is one that you or a family member enrolls in through work and to which the employer makes a contribution for the coverage. If you have this insurance, you have a right under federal regulations to appeal disagreements about benefits through the plan’s internal appeals process. So, if you are enrolled in an employer-sponsored health plan that is not self-insured, you usually have rights under federal and state laws if you have a dispute with your health plan. In fact, you can call or write the Commissioner or Director of Insurance in your state and complain.
• Self-funded plans: Whether you have additional rights under state law will depend on whether the health plan is insured or self-funded. This is because of a federal law called the Employee Retirement Income Security Act, or ERISA. Employer-sponsored health plans that are self-funded get a pass on state insurance laws. A health plan is “self-funded” if the employer pays doctors and hospitals directly.  It can be a challenge for you to find out if your health plan is insured or self-funded because no one wants to give you the information. You may think your coverage is from a health insurance company, such as Blue Shield, but if you work for a large employer, those insurance companies may be out of the payment picture. Instead, they may simply process the claims as a “third-party administrator” for your employer’s self-funded plan. To find out whether your employer-sponsored plan is self-funded, first ask the person who administers the benefits where you work. If you can’t find out from your employer or the summary plan description, you can contact the U.S. Department of Labor’s regional office nearest to you.
• Individually purchased coverage: If you purchased insurance directly from a health plan (your employer does not provide coverage or contribute to its cost) or a broker, you need to ask your broker or look at the laws of your state to determine if you have the right to appeal a dispute over benefits using the plan’s internal procedures or your state’s external review organization. Most states have laws that provide for internal and external review of disputes over coverage that you purchase as an individual. Plus, many well-established companies, such as Aetna and CIGNA, are subject to appeal or external review.

An Introduction to Medicaid

Medicaid is a state-federal partnership that pays for health and long-term care services for certain low-income individuals, including children, the elderly, and people with disabilities. Each state administers its Medicaid program within the general requirements of federal law and regulations.

States and the federal government share the cost of the program. Beneficiaries must meet various restrictions (income or medical need). But Medicaid program content, application processes, and eligibility vary from state to state. Eligible beneficiaries include:

• Low-income families with children, as described in Section 1931 of the Social Security Act, who meet certain of the eligibility requirements in the state’s AFDC (Aid to Families with Dependent Children) plan in effect on July 16, 1996.
• Supplemental Security Income (SSI) recipients—or in states using more restrictive criteria, aged, blind, and disabled individuals who meet criteria that are more restrictive than those of the SSI program and that were in place in the state’s approved Medicaid plan as of Jan. 1, 1972.
  • SSI and Medicaid automatic eligibility: In 39 states, everyone receiving SSI (and a state supplemental payment in states that supplement SSI benefits) is eligible for full Medicaid coverage (Social Security Act § 1902(a)(10) and 42 CFR § 435.232). In many of these states, SSI beneficiaries automatically receive Medicaid and do not have to complete a separate Medicaid application.
  • Separate Medicaid application: In 11 states (called 209(b) states), SSI eligibility does not guarantee Medicaid eligibility. The following states use more restrictive eligibility criteria for Medicaid: Connecticut, Hawaii, Illinois, Indiana, Minnesota, Missouri, New Hampshire, North Dakota, Ohio, Oklahoma, and Virginia.
• Babies born to Medicaid-eligible pregnant women. Medicaid eligibility must continue throughout the first year of life as long as the infant remains in the mother’s household and she remains Medicaid eligible.
• Children under 6 and pregnant women whose family income is at or below 133 percent of the federal poverty level. (The minimum mandatory income level for pregnant women and infants in certain states may be higher than 133 percent. See the Uninsured page for the federal poverty guidelines.) States are required to extend Medicaid eligibility until age 19. Once eligibility is established, pregnant women remain eligible for Medicaid through the end of the calendar month that includes the 60th day after the end of the pregnancy.
• Recipients of adoption assistance and foster care under Title IV-E of the Social Security Act.
• Certain Medicare beneficiaries (described later).
• Members of special protected groups, who may keep Medicaid for a period of time. Examples are persons who lose SSI payments due to earnings from work or increased Social Security benefits and families who are provided 6 to 12 months of Medicaid coverage following loss of eligibility under Section 1931 due to earnings, or 4 months of Medicaid coverage following loss of eligibility under Section 1931 due to an increase in child or spousal support

Differences Among States

Categorically Needy Groups 
States also have the option to provide Medicaid coverage for other “categorically needy groups.” These groups are similar to the mandatory groups. Examples of optional groups that states may cover as categorically needy (and for which they will receive federal matching funds) under the Medicaid program are:

• Infants younger than 1 and pregnant women not covered under the mandatory rules whose family income is below 185 percent of the federal poverty level (the percentage to be set by each state).
• Some low-income children
• Some aged, blind, or disabled adults who have incomes above those requiring mandatory coverage, but below the federal poverty level
• Children under 21 who meet income and resources requirements for AFDC, but who otherwise are not eligible for AFDC
• Institutionalized individuals with income and resources below specified limits
• Persons who would be eligible if institutionalized but who are receiving care under home- and community-based services waivers
• Recipients of state supplementary payments

Medicaid Coverage 
There are certain federally mandated services specified in law, along with a list of optional services for which a federal match is available. States dictate which additional services they will provide, and these vary from state to state.

• Mandated services (must be covered): Mandated services are inpatient and outpatient hospital services; prenatal care; vaccines for children; physician services; nursing services for persons over 21; family planning; home health care for certain individuals; and early and periodic screening, diagnostic, and treatment (EPSDT) services for children under 21.
• Durable medical equipment (DME): All medically necessary and nonexperimental DME must be provided; there can be no exclusive list of DME. Although a state may have list of preapproved DME, such a list is only for administrative convenience to eliminate a cumbersome application process for each DME request.
• Optional services: Currently there are about 34 approved services at the state level for which federal funding is available. States can provide as many or as few as they would like. Also, they can provide services to their categorically needy population that they do not provide to other groups. The most common services include diagnostic services, clinic services, rehabilitation and physical therapy services, optometrist services and eyeglasses, intermediate-care services for the mentally retarded (ICFs/MR), and home- and community-based care to certain persons with chronic impairments.
• Optional mental health services: These services include inpatient psychiatric services for patients 21 and younger; services provided by licensed nonphysician practitioners (e.g., psychologists and social workers); case management; diagnostic, screening, and preventive services; rehabilitative services; and clinic services furnished under the direction of a physician.

Patient Costs 
States may impose cost sharing (deductibles, coinsurance, and co-payments), provided the amount is nominal and that it is not applied to certain populations and services. For example, no cost sharing may be applied to pregnant women and children under 18. In addition, co-payments cannot be applied to emergency medical services or family planning services, regardless of a recipient’s category.

• Premiums are prohibited, with some exceptions
• “Nominal” cost sharing is allowed, with some exceptions
• No overall cap is specified

At or below 150 percent of the federal poverty level (see the Uninsured page for federal poverty guidelines/levels), current regulations on cost sharing for adults receiving Medicaid apply. States can impose the following:

• Premiums: $15 to $19 per family per month
• Deductibles: $2 per family per month
• Co-insurance: 5 percent of noninstitutional costs
• Co-payments: range from 50 cents to $3 per service
• Institutional care: 50 percent of the first day’s costs

Medicaid and Cancer 
Medicaid is subject to your state cancer coverage laws and the laws governing clinical trials. Well, what this means is that, if your state covers "off-label" use of cancer drugs and/or clinical trials, you are covered as a Medicaid cancer patient. Generally, the Medicaid program is less problematic in terms of coverage than many other insurance plans. However, some private physicians will not provide chemotherapy in their offices to patients with Medicaid as primary or secondary insurance because of the low payment allowances. In most areas, they are under no obligation to treat Medicaid patients at all.

An Introduction to Medicare

Who qualifies for Medicare?
Medicare is generally available to folks over 65 (unless you were born after 1937— then you may need to be over 65 or take a reduction in benefits); plus, it's there for the disabled and those with end-stage renal disease. Cancer patients who are under 65 often do not know that they can be insured by Medicare when they are disabled and receiving Social Security for 24 months, and lose other forms of insurance.

If you think you might be eligible for Medicare, check with your local Social Security office, or call the Social Security Administration at 1-800-772-1213.

There are four parts to Medicare: Parts A and B (also called “Original Medicare”), Part C (now known as Medicare Advantage), and Part D (Prescription Drug Benefit). To understand Medicare, you need to understand each of these different parts of the program and your cost-sharing requirements in each part. Parts A, B, and C are outlined below. Part D is discussed on its own page, Medicare Prescription Drug Coverage. More specific information about your out-of-pocket costs for each part is described on the page titled Medicare Patient Costs.

Medicare Basics

The Negative: What Medicare Does Not Cover 
Before we look at the coverage by Medicare, let’s look at what is excluded from coverage.

Preventive Care - Not covered with limited exceptions. Let’s face it — when Medicare started, preventive care was considered beside the point. In the 1960s, Medicare was limited to catastrophic illness and hospitalizations. Now we know better. So, in line with current information, Medicare now covers many “early detection” services for cancer, such as mammography, prostate screening, colon cancer screening, and cervical cancer screening. They now even have a “Welcome to Medicare” physical so you can get screened for all kinds of stuff before you get really sick and cost the federal government a fortune.

However, you must have that physical in the first 6 months of your Medicare coverage. But be aware that Medicare does not cover all screening tests, and they do not pay for other annual physicals.

Over-the-Counter Drugs - Not covered. However, for prescription drugs, if you have signed up for a prescription drug plan, you have coverage. Until Jan. 1, 2006, Medicare did not cover most prescription drugs and products, such as insulin and self-administered injectibles. This lack of coverage was particularly bad for cancer patients because increasing numbers of wonderful cancer drugs are now in oral form.

Cosmetic or patient convenience items and services - Not covered. Forget about charging that face lift to Medicare. It also means that if you want to stay in the hospital an additional night because you are far from home, Medicare will not pay for it.

Long-term care - Not covered. If the nursing home does not provide what Medicare defines as a “skilled” level of care, it does not qualify for Medicare coverage. For less financially fortunate folks, Medicaid covers your long-term care.

Routine dental and optometry services - Not covered. The key here is “routine.” For patients with mouth disease caused by chemotherapy or radiation, some dental services can be covered.

Items and/or services considered not medically necessary - Not covered. This is a very common issue for cancer patients because you can often benefit from a cancer drug that is used in a way that was not approved by the U.S. Food and Drug Administration. Or, you might get a test that is not covered by the Medicare program because you have had the test more frequently than Medicare thinks is necessary. Before you have one of these services, your physician’s office might give you a document to sign called an Advance Beneficiary Notice (ABN). This means that if Medicare does not pay, you can be billed for the service or item. If you cannot afford to pay for this service, and it is a drug, the drug company might pick up the bill. Alternatively, the drug companies may have policies to replace the drug for your physician after Medicare declines to pay. In either case, the drug company will make sure you get the drug.

What Medicare Does Cover and Who Pays the Bill

There are four parts to the Medicare program:

• Part A
• Part B
• Part C
• Part D

Medicare Part A -This part of Medicare is known as hospital insurance. But don’t be fooled. It covers lots of things: hospital stays, skilled nursing facility stays, home health care, hospice, inpatient psychiatric stays, and blood transfusions. If you get a Social Security check, you are automatically in Part A. To enroll for Part A, you need to apply roughly 10 months before your 65th birthday. But don’t panic — you can apply late.

Who administers Part A - Private insurance companies contract with the Centers for Medicare and Medicaid Services (CMS) to pay hospitals and other providers under Part A. These contractors (who can be companies, such as Mutual of Omaha, Blue Cross, or Cigna) are called fiscal intermediaries, or FIs. Down the road (by 2010), these will combine with Part B administrators and will be called MACs (Medicare Administrative Contractors).

How hospitals get paid -  Most hospitals — except selected cancer facilities — and SNFs are paid a dollar figure on a per-discharge basis. Hospital payment is linked to your diagnosis or to procedures you receive (such as radiation therapy or chemotherapy). Because hospitals and SNFs are paid a lump sum each time you are in the hospital as an inpatient, they want to get you out as soon as you can possibly go home. That’s why Medicare covers home health care for some diagnoses and services.

Medicare Part B - Eighty-four percent of outpatient cancer care falls under Part B. Part B pays for some hospital outpatient and mental health services, physician services (including office-administered cancer treatment and drugs), diagnostic tests, laboratory tests, take-home equipment, physical therapy, and some home health care and some oral cancer drugs.

You qualify for Part B if you qualify for Part A. The big difference between Part A and Part B is that you can choose not to sign up for Part B if you are covered by another form of insurance. Plus, if you forget to sign up for Part B before your 65th birthday, you can do so only during limited open-enrollment periods each year, and you may be subject to a permanent penalty. This penalty is 10 percent for each 12-month period you do not sign up. Other important facts about Part B follow.

What is paid by Medicare under Part B - Eighty percent of the payment of what Medicare allows for medically necessary outpatient services (this is not always true — read the next section); 50 percent of outpatient mental health services; 80 percent of therapy services (occupational, physical, and speech); and 100 percent of Medicare-approved home health therapy.

Who administers Part B - Hospital outpatient services are administered by the FIs (Fiscal Intermediaries) described above. Part B physician and laboratory services administered by contracting insurance agencies (like Blue Shield or National Heritage Insurance) are called Part B carriers. These carriers are powerful because they decide whether or not they should pay for your office treatment. Home equipment, such as portable infusion pumps, oxygen, and wheelchairs, as well as some cancer drugs given in a pump, fall under special carriers called the Durable Medical Equipment Regional Carriers (DMERCs). These four regional carriers serve all 50 states, approving payments for home equipment and a few oral or pump-infused drugs.

How Part B pays providers -  Most Part B services, physicians, and hospital outpatient and laboratory fees are paid on a fee schedule set by Medicare. Cancer drugs given in the office are on a separate fee schedule. Home equipment is paid on average regional costing and/or on an invoice basis.

Medicare Part C/Medicare Advantage - Medicare Advantage can include HMOs and PPOs like most managed-care organizations, plus fee-for-service plans and Medical Savings Accounts. These are insurance plans that provide patients with different choices, such as HMOs, PPOs, or additional benefits. These plans are available regionally. To qualify, you must be enrolled in Medicare Part A and B. You can find out about plans on the Medicare website. The enrollment period for Medicare Advantage is from November 15 to December 31 each year.

What MA covers and pays - Medicare Advantage must cover the same list of services Medicare covers under Parts A and B, or the Original Medicare Program. However, like other health plans (but not “regular” Medicare), they can require referrals or authorizations. The good news is that they typically have lower co-pays than Part A and B, and they may offer some cool benefits, such as annual physical exams.

What Medicare Advantage (MA) costs - Medicare beneficiaries must continue to pay their Part B premiums. Beyond that, costs will vary as MA plans need to cover only what Medicare does. They can have a different fee schedule, different co-pays, and different treatment approval criteria. Some MA plans will waive your deductible and/or premiums for prescription drugs, which is allowed as long as they spend the same amount on your drugs as Medicare does.

Who administers MA - CMS contracts with different insurance companies in each region. These insurers administer their own programs. However, they may have names that indicate that they are Medicare Advantage, such as Senior Advantage or SeniorCare or Advantage 65. You can choose a plan at the Medicare website.

How MA pays providers (doctors and hospitals) - Like every other health plan, these must have a CONTRACT with your physician. The physicians who are contracted with and participate in the plan are then paid by the plan on a fee schedule or on a per-patient per-month basis. You need to find out if your cancer physicians participate in your MA plan, and you need to tell your doctors up front that you have a Medicare Advantage plan. If they do not participate, or if they do not get authorization, they can be out a lot of money for your cancer treatment. Always tell your physician or pharmacist that you have an MA plan.