Insurance Overview

This section provides background information about commercial health insurance plans (organized by commercial insurance companies or “private payers”) and health insurance programs like Medicare and Medicaid (organized by “public payers”).

Private Payers

Private health insurance plans are organized by commercial health insurance companies (private payers) that finance health care either for a particular company's employees or for individuals who purchase a private policy.

Today, the majority of individuals who are covered by a private payer are enrolled in some type of managed care plan. However, some individuals purchase private fee-for-service coverage on their own.

Private Managed Care Plans

Private managed care organizations (MCOs) receive premium payments from employers to offer defined benefits packages to their employees. MCOs range from tightly managed, staff model health maintenance organizations (HMOs) to less restrictive preferred provider organizations (PPOs). The managed care plans may offer packages that vary in price according to the “richness” of the benefits package (i.e., how many services are covered) and the relative freedom patients have to choose their providers. Virtually all of the large health insurance companies offer a variety of HMO and PPO products. These large health insurance companies include Aetna, UnitedHealthcare, CIGNA and Kaiser.

Private Fee-for-Service (FFS) Plans

Private fee-for-service health insurance plans (also called “indemnity insurers”) provide FFS coverage for their members. The premiums for FFS coverage tend to be expensive and thus many employers have shifted their employees away from FFS coverage. However, some employers who can afford the higher premiums may offer their employees FFS insurance plans to give them unrestricted access to the health care system. These private FFS plans are relatively rare.

Self-Insured Employers

Some very large employers act as their own health insurer for their employees or use third-party administrators (TPAs) to handle this function for them. Examples of very large self-insured employers that provide health care coverage for their employees either directly or through some form of TPA are companies like Ford Motor Company, Coca-Cola, General Motors and Xerox.

Public Payers

The Centers for Medicare & Medicaid Services (CMS) is the federal agency that oversees Medicare and Medicaid. Visit the CMS website at www.cms.hhs.gov for national policy information or go to Medicare/Medicaid Search to find out more about Medicare or Medicaid coverage policies in your state.

Medicare

Medicare is a health insurance program sponsored by the federal government that provides coverage for the following:

• People aged 65 and older
• People with certain disabilities under the age of 65
• People with end-stage renal disease (ESRD)

Medicare is composed of four parts:

• Part A (original Medicare hospital plan)
• Part B (original Medicare medical plan)
• Part C (Medicare Advantage Plans)
• Part D (Medicare prescription drug coverage)

For a simple introduction to Medicare, see Medicare at a Glance on the Medicare website. You will also find the complete, official government handbook, Medicare & You, on the same website.

What is Medicare Part A?

Medicare Part A is part of the original Medicare program. It helps to cover inpatient care. Inpatient care means services provided to a patient who has been admitted to a hospital and who has been under supervision for at least 24 hours. Part A includes care provided in critical access hospitals and skilled nursing facilities, but not custodial or long-term care. Part A also helps cover hospice care and home health care in some cases.

Please see Your Medicare Benefits for more detailed information on Medicare Part A. Patients may have to cover a deductible, which varies depending on the length of their hospital stay, and co-payments or co-insurance for certain costs incurred under Part A.

Most people receive Medicare Part A coverage automatically, without having to pay a monthly payment (called a premium), because they or a spouse paid Medicare taxes while working. If you don’t automatically get premium-free Part A, you may be able to buy it. See page 8 of Medicare & You for more information.

What is Medicare Part B?

Medicare Part B is also part of the original Medicare program. Part B is an optional benefit that helps cover medically necessary doctors’ services, including physician-administered drugs, outpatient care and other medical items and services that Part A doesn’t cover, including some important preventive services, such as flu and pneumonia vaccinations and screening for cancer and diabetes.

Under Medicare Part B, you can go to any doctor or supplier (e.g., a pharmacy) that accepts Medicare and is accepting new Medicare patients, or to any hospital or other health care facility (such as a rural health clinic). You need to pay a set amount for your health care (a deductible) before Medicare coverage begins. After you have paid your deductible in full, Medicare begins to pay for covered services and supplies, with the exception of your co-payment or co-insurance. This co-payment or co-insurance is the portion of your health care costs for which you are responsible under Part B unless you have a Medigap policy or other secondary insurance that may pay for some or all of these costs. If you are covered under a Medicare Advantage plan, the situation will vary depending upon your plan.

Most people pay the standard Part B premium. Some people may pay a higher premium based on their income. Premium amounts change each year. If you decide not to enroll in Medicare Part B when you are first eligible, you may pay a penalty if you choose to join later.

Please see Your Medicare Benefits to learn more about original Medicare plan options. You can also visit Medicare Options Compare on the Medicare website.

What isn't covered by Medicare Part A and Part B?

Medicare Parts A and B do not cover every medical item or service available. For example, the original Medicare plan doesn’t cover cosmetic surgery, health care you get while traveling outside of the United States (except in limited cases), most hearing exams, hearing aids, long-term care (like care in a nursing home) and most eyeglasses. Some of these services may be covered under supplemental Medicare insurance policies known as Medigap policies or under Medicare Part C, often referred to as Medicare Advantage.

What is Medicare Part C?

Medicare Part C, commonly referred to as Medicare Advantage, offers a variety of health plan options — like health maintenance organizations (HMOs) and preferred provider organizations (PPOs) — that are approved by Medicare but run by private companies. These plans not only provide all of the medically necessary services you would get under Medicare Part A and Part B coverage, but also generally offer extra benefits as well and may include Part D drug coverage.

Enrollment in a Medicare Advantage plan is optional. Depending on the plan you select, you may have to receive care exclusively from doctors who participate in the plan you join and you may have to go to specific hospitals to receive covered services.

In many cases, the costs for services administered through a Medicare Advantage plan can be lower than the costs in the original Medicare plan, but it is important to check very carefully because the costs for services vary by plan and by the services you use.

To learn more you can visit the Medicare Advantage Plans section on the Medicare website.

What is Medicare Part D?

Medicare Part D offers optional prescription drug coverage for anyone with Medicare. For detailed information about this program, please see the Prescription Drug Coverage section of the Medicare website.

Part D coverage may help lower outpatient prescription drug costs, particularly for drugs that are not covered under Medicare Part A and Part B. Like Medicare Advantage plans, Part D plans are run by private companies approved by Medicare.

If you join a Medicare Part D prescription drug plan, you usually pay a monthly premium. In addition, most plans will need you to make a co-payment for each prescription filled. If you decide not to enroll in a Medicare prescription drug plan when you are first eligible, you may pay a penalty if you choose to join later. If you have limited income and resources, you might qualify for extra help paying your Part D costs.

For more information on the Part D plans available in your area, you can visit the Medicare Prescription Drug Plan Finder on the Medicare website. For more information on who can get extra help with prescription drug costs and how to apply, visit www.socialsecurity.gov or call Social Security at (800) 772-1213.

About Medigap Policies

Medigap policies are health insurance policies sold by private insurance companies to fill “gaps” in original Medicare plan coverage. For more information, you can visit the Medigap (Supplemental Insurance) Policies section on the Medicare website.

Medigap policies help you to pay your share (co-insurance, co-payments or deductibles) of the costs of Medicare-covered services, and some policies cover certain costs not covered by the original Medicare plan. If you are in the original Medicare plan and have a Medigap policy, then Medicare and your Medigap policy will both pay their shares of covered health care costs.

Generally, when you buy a Medigap policy, you must have Medicare Part A and Part B. You or someone acting on your behalf (like a former employer or union) will have to pay the monthly Medicare Part B premium. You will also have to pay a premium to the Medigap insurance company. In most states, you may be able to choose from up to 12 different standardized Medigap policies; your rights to buy a Medigap policy may vary by state.

Medigap policies only work in association with the original Medicare plan. Generally, these policies provide some of the same kinds of supplemental coverage as Medicare Advantage plans. If you join a Medicare Advantage plan (like an HMO or PPO), your Medigap policy won’t pay any deductibles, co-payments or other cost-sharing that may apply under your Medicare Advantage plan. Therefore, you may want to reconsider your need for a Medigap policy if you join a Medicare Advantage plan.

Medicaid

Medicaid is a health insurance program for certain low-income and medically needy people. Although the federal government establishes general guidelines for Medicaid, the specific program requirements and details are established and administered on a state-by-state basis.

Individual states have some discretion in determining which groups their Medicaid programs will cover and the financial criteria for Medicaid eligibility. However, to be eligible for federal funds, states are required to provide Medicaid coverage for certain mandatory populations. Some examples of the mandatory Medicaid eligibility groups include the following:

• Limited-income families with children who meet certain eligibility requirements

• Supplemental Security Income (SSI) recipients
• Infants born to Medicaid-eligible women
• Children under age 6 and pregnant women whose family income is at or below 133 percent of the federal poverty level
• Recipients of adoption assistance and foster care
• Certain people with Medicare
• Special protected groups who may keep Medicaid for a period of time

In addition to the groups that states are required to cover as mandatory populations, states have the discretion to cover certain optional populations if they so choose. Examples of optional Medicaid eligibility groups include the following:

• Targeted low-income children, children under age 21 with certain income and infants below state-specified income levels
• Uninsured and low-income women with breast or cervical cancer
• Blind and disabled people with certain income levels and persons with tuberculosis
• Elderly individuals below 100 percent of the federal poverty level
• “Medically needy” people who would qualify for Medicaid except that their income is too high. These individuals can “spend down” their income to qualify for Medicaid by incurring medical expenses.

Some Medicare beneficiaries with low income and limited resources also may qualify for some form of Medicaid benefit, ranging from limited assistance with Medicare premiums and cost-sharing to full Medicare and Medicaid coverage with no premiums or cost-sharing. Such beneficiaries with Medicare and at least some level of Medicaid assistance are known as “dual eligibles.” For any services covered by Medicare, Medicare pays prior to Medicaid, as Medicaid is always considered the “payer of last resort.”

For detailed information about Medicaid eligibility, please visit the Medicaid Eligibility section of the CMS website.

By law, state Medicaid programs must cover the following items and services for the populations they choose to cover:

• Physician services
• Inpatient and outpatient services
• Prenatal care
• Vaccines for children
• Nursing facility services (aged 21 and older)
• Family planning services and supplies
• Rural health clinic services
• Home health care for persons eligible for skilled nursing services
• Laboratory and x-ray services
• Pediatric and family nurse practitioner services
• Nurse-midwife services
• Federally qualified health center (FQHC) services and ambulatory services of an FQHC that would be available in other settings
• Early and periodic screening, diagnostic and treatment (EPSDT) services for children under age 21

In addition, state Medicaid programs may choose to cover the following optional services:

• Prescription drugs* and prosthetic devices
• Diagnostic services
• Clinic services
• Intermediate care facilities for the mentally retarded
• Optometrist services and eyeglasses
• Nursing facility services for children under age 21
• Transportation services
• Rehabilitation and physical therapy services
• Home- and community-based care to certain persons with chronic impairments
• Program of All-Inclusive Care for the Elderly (PACE)

For access to a wider range of information about the Medicaid program, see the Medicaid Program — General Information page on the CMS website.

*Although coverage of prescribed drugs is optional under Medicaid, all 50 states and the District of Columbia choose to cover them.

Please note: This website contains links to a number of other sites that may offer useful information. We suggest visiting those sites directly to obtain information on specific details of coverage, educational and financial support services for XOLAIR^® (Omalizumab). Genentech, Inc. and Novartis Pharmaceuticals Corporation are not partners with or affiliated with any company listed. The availability of health insurance coverage and financial assistance varies from company to company, plan to plan and state to state. Genentech, Inc. and Novartis Pharmaceuticals Corporation do not imply or guarantee that a specific health insurance plan or any other company will provide coverage or assistance for XOLAIR. Genentech, Inc. and Novartis Pharmaceuticals Corporation are not responsible for any decisions regarding partial or non-coverage of XOLAIR.