Medicare & the Cost of Cancer Treatment

Hi, I am Matthew Claassen with In this video we will be discussing Medicare and the cost of cancer treatment. This video is for everybody. Everybody that is either on Medicare or soon to be on Medicare. We are going to talk about the advantages and disadvantages of Medicare Advantage plans, Medicare supplements and your Medicare Part D prescription drug plans when it comes to handling the cost of cancer treatment. In addition, we’re going to show you how you can reduce your financial risk in the case of a cancer diagnosis. Cancer can present a risk not just to your health, but to your Financial stability as well. Cancer is the second leading cause of death in the United States. In 2016 alone it’s expected that over 1,700,000 people in this country will be first diagnosed with cancer. Chances are you already know of someone or know someone who has battled cancer. You understand the emotional and physical toll it can take on you. When a doctor first uses that word “cancer” the patient goes through an emotional shock. How serious is it? What kind of treatment? What will I do now? The one thing that they shouldn’t have going through their mind is; how much is this going to cost? Cancer is one of the most expensive conditions to treat. Even with the best insurance a typical patient will spend thousands, if not tens of thousands of dollars battling cancer. Currently a typical cancer drug costs about $10,000 a month some drugs cost $100,000 for treatment. As a matter of fact, recently a new drugs was released to treat to melanoma by Bristol Myers Squibb. It cost $147,000 for a 12-week treatment with a 60% success rate. Plus over $250,000 if it’s needed over a full year. Needless to say, one of the growing trends in cancer treatment is the inability for a patient to afford the treatment they need. The questions that were going to try to answer in this video are with Medicare how much of these costs will Medicare cover? How much are you going to be responsible for? How much should you have set aside in a financial war chest to help battle cancer so that the decisions you make are not based on your budget? As we go through this discussion what I have done is broken down the cost of cancer into to two different categories. There is direct costs and indirect costs. Direct cost is directly paying for a service or a medication. If you have to pay a portion of the medication that would be a direct cost. If you have to pay for chemotherapy that would be a direct cost. Indirect costs are costs that you’re going to incur in order to get better treatment, but are not directly related to treatment or medication. For example let’s say that should have Medicare and you decide to go to either MD Anderson in in Texes or to Sloan Kettering in New York, to the top cancer specialist or facilities in the country To go there, you’re going to have to pay for the flight. You are going to have to pay for the room and board during the time receiveing treatment. Those kinds of costs areIndirect Costs. We’re going to go over both of them and what you should expect depending on the type of Medicare that you’ve chosen. It’s also important to understand which part of Medicare handles which part of the services. Some of your cancer treatment can be covered under Medicare Part B or the Medicare Advantage equivalent. Some will be covered under the Medicare Part D prescription drug portion. This is important because which portion of Medicare covers what treatment is going to define your level of financial obligation and your level of risk. So this is where we’re going to start. Here is the rule of thumb. And understand this is just a rule of thumb. Rules of thumb have exceptions. The rule of thumb is that if you have a treatment that is provided by your doctor; at a facility or doctor’s office, whether it’s an injection or a pill, it’s not self administered it’s administered to you, those are typically covered under your Medicare Part B outpatient services, or the Medicare Advantage equivalent to Medicare Part B. If the doctor writes a prescription and hands you that prescription with instructions to go to a pharmacy to purchase the medication and then self-administer that medication Then that medication is more likely to be covered under your prescription drug Part D program. Chemotherapy and many of the related medications that are not self administered are covered under a Medicare Part B. Those that are already on Original Medicare, perhaps with a supplement, are aware that Medicare Part B pays for 80% of the covered services. That leaves you responsible for 20%, or if you have a Medicare supplement it would be your Medicare Supplementthat would be responsible for your 20%. With with most Medicare supplements you will have very little financial exposure to this portion of the cancer treatment. If you have a Medicare Advantage plan you should check your Summary of Benefits. You are required to receive a summary of benefits before you actually sign your Medicare damage plan for the year. Typically take a look right before it starts talking about prescription drugs and you’re going to see something like this. For most Medicare Advantage Plans, your Part B for cancer treatment your Medicare Advantage Plan is going to cover 80%, you’re going to be responsible for 20% of the costs, Every Medicare Advantage plan is different. Every plan is different. Please check your Summary of Benefits, specifically as it shows here, it will address chemotherapy and tell you what your responsibility will be. If you have an HMO, there’ll typically and no out of Network Insurance coverage. usually, not always but usually when you have an HMO you will be responsible for 100% of any out- oNetwork sevices…. and typically 20% for in-Network Services. If you have a Medicare Advantage plan that is a PPO or regional PPO then it will have different levels of services of four both in-network and out-of-network. In-network you are typically not be responsible for 20% Out-of-network it will depend completely on your plan. The good news is that your Chemo- therapy along with everything else that’s covered under your Medicare Part B equivalent is subject to your maximum annual out-of- pocket limit. We call this yourMOOPfor Maximum Annual Out-of-Pocket. That MOOP can be different for every plan, for many of the PPOS it’s typically $6,700 a calendar year for in-network and $10,000 in calendar year for out-of-network. HMOS can be the same or less. It’s also going to be depend on the plan year. As I’m recording this video its 2016. Those maximum out-of-pockets that are typical can change each and every year. This is good news because it limits your financial exposure It doesn’t matter what your Medicare Part B portion charges are. You will be limited in any calendar year basis to that maximum out-of- pocket expense. If it’s $6,700, then you’ll be limited to $6,700 out of pocket for that calendar year. Keep in mind, however, it is based on a calendar year it does reset on January 1 each year and it excludes or Medicare Part D prescription drug portion. In other words, the portion of your plan that referrs to prescription drugs does not have a maximum out of pocket limit. The other thing to consider it is Murphy’s law. people do get sick in October, November, December….. You can very easily reach a maximum out of pocket limit in the last quarter of one year have a reset on January 1 and start all over again next year, and very quickly incur your maximum out of pocket limit. It is not uncommon at all, it happens a lot. So please be prepared to pay twice your maximum out of pocket limit. If you have the Original Medicare then your maximum out of pocket limit is going to depend on your supplement. It can be not as simple as a co-pay or as low as zero, depending on your supplement. For those with Original Medicare and a Medicare Supplement your financial risk for the Medicare Part B charges is rather minimal. So let’s review recovered so far; Chemotherapy and other cancer treatments that are not self administered are typically covered under Medicare Part B. If you have a Medicare Advantage plan, then your first finanical risk is chemotherapy and these other not self directed services because you will be responsible for 20% of the cost up to your maximum annual out of pocket expense. If you decide to go to a specialty cancer treatment then these services may be out of network. Then you’ll have your out of network maximum out of pocket expense in addition to the travel expenditures and lodging from going to let a specialty clinic. If you have a Medicare Advantage plan than you can expect between $14,000 and $20,000 in direct expenses for Medicare Part B Services. If you decide to go specialty cancer treatment service that’s in another state then you may have some indirect costs as well. If you have the original Medicare and Medicare supplement and then your Medicare Part B coverage is gonna be limited to your Medicare supplement. It could include some co-pays or it could be zero. Your Medicare Part B exposure will be limited by your Medicare supplement and it will not be the biggest issue in handling of the cancer treatment. But keep in mind; in both cases that none of this includes your prescription drug Part D charges, which we are going to go over next. I would like you to know if you’re a Florida resident and you have a Medicare Advantage plan or you’re considering a Medicare Advantage plan, there all are at least two Medicare Advantage plans that will cover some of the out of state clinic so that you can actually go to something like an M.D. Anderson for specialty service and have in-network costs In other states regional PPOs may also cover that. Contact me and let me know when we’ll take a look for you. This brings us to Medicare Part D for prescription drugs and what you can expect for that to pay of your cancer medications. Medicare Part D is that portion of Medicare that handles your prescription medications. Prescription medications are those where your doctor sas written a script. You are expected to go to a pharmacy to purchase your medication and self administer your medication. If you have original Medicare and Medicare supplement you’re going to have a standalone prescription drug plan. It wil be separate from everything else that you have. If you have a Medicare Advantage plan the chances are your prescription drug plan is bundled into that. You didn’t have the opportunity shop for your own drug plan. You got the one that was bundled with the Medicare Advantage plan that you decided to join. In either case, your Medicare prescription drug plan Part D charges are in addition to the maximum annual out-of-pocket that you may have with a Medicare Advantage plan. They’re completely seperate from any of your other charges. To be clear; there is no maximum annual out-of-pocket expense for any of your prescription drugs. The way it works is that your prescription drug your Part D drugs will have the coinsurance, not a co-pay where it’s just $5 or $10, but a coinsurance we’re gonna pay a percentage of that drug’s total cost. It will be different with ever plan. Some plans it may be 25% to 35%. Other plans may charge 50%. You will pay that coinsurance until you have reached a certain maximum out-of-pocket. There are features like the doughnut hole and complications I don’t want to get into on this. Suffice it to say that with a prescription drug for cancer you’re very quickly going to reach what we callCatastrophic Coverage.In 2016 catastrophic coverage is reached when you’ve had $4,850 in out-of-pocket expenses. Once you’ve reached that level, then Medicare is going to pay for 95% of the drug you’re going to pay for 5% of the cost. There are some exceptions where there are co-pays, but typically in with cancer drugs that’s the way works. According to the Journal of Oncology Practice in May 2014 publication; the average cancer patient, not just the average cancer patient on Medicare, but the average cancer patient in general payed out of pocket between $20,000 and $30,000 for their prescription drugs! According to the Kaiser Family Foundation ( in their studies on Medicare the average Medicare beneficiary with cancer is going to pay between $7,000 and $12,000 out-of-pocket for their prescription drugs. most of that is incurred after you’ve reached that catastrophic coverage. This bar chart produced by the Kaiser Family Foundation show some of the cost that a typical Medicare Part D enrollees pay for specialty drugs. In the last three down at the bottom are cancer drugs. The gray areas shows what is paid before you reach catastrophic coverage and the the dark blue us what you’re paying after you’ve reached catastrophic coverage. You can see the totals in here between $7,000 and $11,000, and that’s just for these particular drugs. So this graph you’re looking at from the Memorial Sloan Kettering cancer center shows that the median and monthly cost for cancer drugs through the years. What is shown are many currently around $10,000 per month with some close to $100,000 Remember after certain level about a pocket expenses, $4850, you reach catastrophic coverage where your costs is limited to 5% of the drug price. But this is a monthly drug price and there’s no limit on what you might pay. Again in 2016 to catastrophic coverage starts once you’ve already had $4,850 out-of-pocket. The bottom line is that even with the best of Medicare Part D prescription drug plans, your cost, when you’re on Medicare, full for cancer drugs is likely to be in the tens of thousands of dollars. This is in addition to any of the cost that you may have incurred under your Medicare Part B. So, what does all this add up to and what we do about? Well first; my hope is that you found the information on the financial risks that you’re facing with cancer useful. I’d hope this is information that you can use. As an independent broker you my goal is to make sure that you have the information you need to help make informed decisions. The last thing that I want is unsettling surprises that you can’t do anything about because it’s too late. At least with this information you have the opportunity to take action to solve this risk before it’s too late. Before you’ve been diagnosed. A study that was presented to 2014 by the Palliative Care and Oncology Symposium 2014 Found that 64% of cancer survivors are reported major financial problems as a result of the expense of fighting cancer. They were either over burdened by debt, had to file for bankruptcy or if even had to return to work to help cover the expenses they incurred fighting cancer. I certainly would hope that is something we can avoid. I don’t want to do that myself. Of course where ever there is financial risk you’re going to find and an insurance product that will help to protect you from that financial risk, typically for pennies on the dollar. For very little premium, there is an insurance you may be able to qualify for that will provide you a lump sum of cash on the diagnosis of cancer This is a policy that pays you. It doesn’t pay your doctor. It pays you. a lump sum of cash and it pays you when you’re diagnosed. So, with the first diagnosis you can receive a check for $10,000, $15,000 $25,000 or more up to the amount that you choose. It’s typically limited to $100,000. You receive that check when you are diagnosed, before you have to go through treatment. So you can use that money to make your decisions on how you’re going to battle cancer. You can use the money to go specialty clinic, you can use the money to cover your Part B expensive or your specialty drugs. This money is your war chest to help you battle cancer. Receiving up lump sum of cash, and you can choose the amount, on the first diagnosis of cancer is really the perfect product for filling in their weaknesses in Medicare andthe enormous costs of the cancer drugs that we have to pay. It’s is really there so that you’re not put into a financial hardship at really the worst moment to your life. You want to be able to make a decision about your Health Care based on your best interests and and not your budget. The cost is very reasonable, the premiums never increase If you’re interested and yu want to take a look and see if you qualify for the plants are what they would cost you, fill in the contact information below. We will be back in touch with you and will give you the prices and the other information that you need to see if you qualify and to see if this is the right product for you and your budget. The objective, as always, is to give you the information that you need so that you can make an informed decision. I am Matthew Claassen with Thank you for watching