Medicare is a federally-administered health insurance program that covers United States citizens aged 65 and older as well as younger disabled people and individuals with end stage renal disease and Lou Gehrig’s disease. Medicare is different from Medicaid in that it is funded by trust funds that enrollees have paid into as opposed to federal, state, and local tax funds, and in that Medicaid has no age restriction. People who already get Social Security checks are automatically enrolled in original Medicare, and they will receive a Medicare card 3 months before they turn 65, and will be able to enjoy benefits the first of the month of their 65th birthday. Original, or traditional, Medicare consists of two parts: A and B.
Medicare Part A. This covers hospital care, skilled nursing facility care, hospice, home health services, and long-term hospitals. Inpatient hospital care includes semi-private rooms, meals, general nursing, drugs as part of inpatient treatment, and other hospital services and supplies given in acute care hospitals, critical access hospitals, inpatient rehabilitation facilities, long-term care hospitals, and inpatient care as part of a qualifying clinical research study, and mental health care. It does not cover private-duty nursing, private room (unless medically necessary), television and phone in the room (if there's a separate charge for these items), or personal care items. Patients are eligible for hospital care if a doctor produces an official order saying that inpatient hospital care is needed for an illness or injury, the patient needs care that only a hospital can give, the hospital accepts Medicare, and the hospital’s Utilization Review Committee approves the patient’s stay.
Skilled nursing facility care includes, given certain conditions and for a limited time, semi-private room, meals, skilled nursing care, physical and occupational therapy, speech-language pathology services, medical social services, medications, medical supplies and equipment used in the facility, ambulance transportation (when other transportation endangers health) to the nearest supplier of needed services that aren’t available at the SNF, and dietary counseling. A patient qualifies for skilled nursing facility care if they have part A and days left in their benefit period, a qualifying hospital stay, their doctor has decided SNF is needed, the patient gets these services in a Medicare-certified SNF, and needs these services for a hospital related condition or a condition that began while getting care in the SNF for a hospital-related condition. In a related note, Medicare does not cover nursing home care when custodial care such as bathing or dressing is the only care the patient needs.
Hospice and respite care is given at the home of terminally ill patients who have been certified as so by their doctors and are expected to live for 6 months or less, have part A, accept palliative care as opposed to care to cure the illness, and sign a statement choosing hospice care instead of traditional benefits for their terminal illness. Once a patient has chosen hospice care, their Medicare benefits will not cover treatment intended to cure their illness, prescription drugs to cure the disease, room and board, emergency room or inpatient facility care, ambulance transportation, or care from any hospice that wasn’t set up by the hospice medical team. Hospice care includes doctor services, nursing care, medical equipment, medical supplies, drugs for symptom control or pain relief, hospice aide and homemaker services, physical and occupational therapy, speech-language pathology services, social work services, dietary counseling, grief and loss counseling for patient and family, short-term inpatient care, short term respite care, and any other covered services needed to manage pain and other symptoms related to the terminal illness, as recommended by the hospice team.
Home health services such as intermittent skilled nursing care, physical therapy, speech-language pathology services, and continued occupational services are covered by part A (and B). Home delivered meals, homemaker services, personal care and 24-hour-a-day home care are excluded. A patient who is enrolled in Medicare and is under the care of a doctor who certifies that they need one or more of the covered services is eligible for home health services, provided they are homebound and the home health agency caring for them is certified by Medicare.
Long-term hospital care is covered by Medicare part A for patients who have one or more serious conditions but who also may get better and return home with time and care.
Medicare Part B. This covers medically necessary and preventive services such as clinical research, ambulance services, durable medical equipment, mental health (inpatient, outpatient, partial hospitalization), a second opinion before surgery, and limited outpatient prescription drugs. Ambulance transportation to the nearest suitable medical facility is covered when conveyance in any other vehicle is dangerous; airplane and helicopter transportation may be covered if the pickup location is hard to reach by ground or if large distances, heavy traffic, or other obstacles deterred prompt care when going by ground.
Part B covers durable medical equipment that has been prescribed by a doctor to be used at home, is long-lasting, used for a medical reason, and not useful to a healthy person, including air-fluidized beds, blood sugar monitors, blood sugar test strips, braces, canes (excluding white canes for the blind, commode chairs, continuous passive motion machine, crutches, enteral nutrition supplies and equipment, glucose control solutions, home oxygen equipment and supplies, hospital beds, infusion pumps, lancets, nebulizers and nebulizer medications, orthotics and artificial limbs, ostomy supplies, oxygen therapy, patient lifts, prosthetic devices, sleep apnea and CPAP therapy, suction pumps, therapeutic shoes or inserts, traction equipment, walkers, and wheelchairs and power mobility devices.
Part B mental health care covers outpatient services provided by a doctor clinical psychologist, clinical social worker, nurse practitioner, clinical nurse specialist, certified nurse-midwife, or physician assistant who accepts Medicare. It also covers partial hospitalization provided by a hospital or a community mental health center to outpatients who are certified by a doctor as otherwise needing inpatient treatment. (Mental health care services that require a person to be admitted as an inpatient are covered by part A).
Medicare coverage depends on federal and state laws, national decisions made by Medicare about whether something is covered, and local coverage decisions made by companies in each state that process claims for Medicare. Consumers can determine what coverage suits them best by talking to their doctors about the services and supplies they need and whether they are covered by Medicare.
The 2003 Medicare Prescription Drug, Improvement, and Modernization Act made changes to Medicare part C and introduced part D.
Medicare Part C. Also known as Medicare Advantage Plans (MA Plans), they are Medicare-approved insurance plans provided by private companies. This is not an alternative to Medicare. To access Medicare Advantage Plans you have to enroll in original Medicare first, which means that you still get Parts A and B. In fact, private insurance companies that provide MA Plans are required by law to offer coverage that is at least equal to Medicare Parts A and B. However, most MA Plans offer additional coverage, for example vision, hearing, and health and wellness programs, as well as Medicare part D (prescription drug coverage). MA Plans are usually arranged as HMO’s (health maintenance organizations) or PPO’s (preferred provider organizations). You generally choose a doctor as a primary care provider, though choice of doctors, hospitals and other health care providers is restricted. Both HMO’s and PPO’s must comply with Medicare rules, but as long as they provide the services that the law requires them to do, they can choose how to offer those services.
Private companies may also offer Medicare supplements known as Medigaps. A Medigap can help pay copayments, coinsurance, deductibles, and other costs that original Medicare doesn’t cover. It may also add policies that original Medicare doesn’t provide, for instance medical care when traveling outside the States. The best time to apply for a Medigap is when you’re first eligible during a 6-month Medigap open enrollment period. Keep in mind though that you must have parts A and B, a Medigap only covers you, and that you have to pay a monthly premium on top of the part B premium.
Medicare Part D. This is an optional prescription drug coverage program. You can get part D either from original Medicare or from a Medicare Advantage Plan, but not from both. If you have an MA Plan that covers prescription drugs and join part D regardless, you will be disenrolled from the MA Plan and returned to traditional Medicare. Each plan covers different drugs, and many organize them into tiers; drugs in the lower tiers tend to cost less than the ones in the higher tiers.
People who do not get Social Security checks have to enroll in Medicare. The enrollment process is handled by the Social Security Administration, and it can be done online
, by phone at (800)772-1213, or through a local Social Security Office. To apply you must be at least 64 years and 9 months old (applying three months before turning 65 will ensure that benefits won’t be delayed so you’re not charged higher premiums; you can still voluntarily delay benefits if you’re still working if you so choose).
How much does Medicare cost?
Part A. This costs up to $426 a month. Premium-free part A is available to people who are 65 and getting Social Security retirement benefits or Railroad Retirement Board benefits, are eligible for those benefits but haven’t filed for them yet, or paid Medicare taxes while working (or had a spouse who did). People under 65 are entitled to premium-free part A if they got Social Security or Railroad Retirement Board disability benefits for 24 months, or have End-Stage Renal Disease (ESRD) and meet certain requirements.
Part B. Most people pay a $104.90 monthly premium and a $147 yearly deductible. Extra charges include an Income Related Monthly Adjustment Amount if your reported modified adjusted gross income from two years ago is above a certain amount, and a late enrollment penalty if you don’t sign up for part B when you’re first eligible. More often than not you’re automatically enrolled in parts A and B and must pay premiums for both. However, you can drop part B by following the instructions in your Medicare card and sending it back, or by contacting Social Security, as the case may be. Keep in mind that your Medicare must not have started before you do that.
Part C. The cost of a Medicare Advantage Plan is based on whether the plan charges a monthly premium, whether it pays any of your monthly Part B premium, whether it has an annual (or any additional) deductible, how much it charges in copayments or coinsurance, the type and frequency of the services you need, whether you visit an out of network doctor or use only network providers, whether you need additional benefits, whether you also have Medicaid or receive help from your state, and on the plan’s annual limit of out-of-pocket costs for all services.
Part D. Medicare drug coverage may include such costs as premium, yearly deductible, copayments or coinsurance, costs in the coverage gap, costs if you get extra help, and costs if you pay a late enrollment penalty. Most people only pay the premium, which varies according to the plan and your income.
Copayment: Fixed amount paid for a covered health service rendered.
Coinsurance: The percentage of your share of the cost for a covered healthcare service.
Deductible: The amount you have to meet before your health insurance plan begins to pay. A $1,000 deductible means you have to owe at least that before the plan kicks in. May not apply to all services.
HMO: A health maintenance organization that provides insurance to people living and working in its area of service, and covers only care that is within its network except in case of an emergency.
PPO: A preferred provider organization that contracts healthcare providers to develop a network. Providers within the network cost less than those outside of it.