Medicare

What is Medicare and who is it for?

Medicare is federally funded health insurance. It is for Americans over age 65. You may qualify if you are under age 65 if you have certain disabilities or you have permanent kidney failure.

Sidebar: Medicare does not take your income into consideration-Medicaid does.

What is Medicare Part A and what does it do?

Medicare Part A is hospital insurance. It pays for inpatient hospital care, skilled nursing facilities, hospice care and limited home health care. Most participants do not have to pay for Part A coverage and are automatically eligible when they turn 65. You will have to pay for Part A coverage if you or your spouse never paid Medicare taxes while working. Your Medicare card should state "Hospital Part A" on it if you are covered under Part A.

TIP: If you are unsure whether you have to pay for Medicare Part A, call your local Social Security Administration office to find out.

What is Medicare Part B and what does it do?

Medicare Part B is medical insurance. It covers doctor visits, outpatient hospital treatment, physical and occupational therapy and limited home health care. The services must be medically necessary to be covered. You must pay a monthly premium for Part B coverage and enrolling in Part B is optional. Your premium will usually be paid out of your Social Security or other government retirement benefits, such as Railroad Retirement benefits or Civil Service benefits.

Is Medicare free?

No. As mentioned above, Medicare Part A (hospital insurance) is free if you have paid into it, but Part B (medical insurance) requires a monthly premium. It is either paid out of Social Security benefits, or you must pay the premium on your own.

What is a Medicare-approved drug discount card and where can I get one?

Most Medicare participants are eligible to receive a Medicare-approved discount drug card. This new program helps seniors with prescription drug costs. If you signed up in 2004 when this benefit was introduced, you received a $600 credit towards the purchase of prescription drugs. This credit is prorated if you sign up in 2005. By 2006, Medicare's new prescription drug program will take full effect, and all Medicare recipients will be eligible for prescription drug benefits. You can get a card through one of the many private insurance companies that have contracted with Medicare to provide this service.

Caution: If you have Medicaid-provided prescription drug benefits, you are not eligible for a Medicare-approved drug discount card.

Can I get a Medicare prescription drug card if I am in a nursing home?

You must meet certain specific conditions. You must have Medicare Part A and/or Part B, and you cannot have outpatient prescription drug benefits from Medicaid. Medicaid cannot pay for your nursing home stay. You also must receive your prescription drugs through the nursing home pharmacy-not from an outside source such as a community pharmacy or mail order. There are also income limitations.

How do I apply for Medicare?

If you currently receive Social Security or Railroad Retirement benefits, you will be automatically enrolled in Medicare. The Social Security Administration will mail your enrollment package to you.

TIP: If you do not receive your enrollment information by your 65th birthday, contact your local Social Security Administration.

If you do not currently receive Social Security or Railroad Retirement benefits, you will need to apply by yourself. Call the nearest Social Security Administration to obtain the application. If you do choose to participate, you must do so within a very specific time frame-the 3 months before and the 3 months after your 65th birthday.

TIP: It is best to sign up for Medicare before you turn 65. Mark your calendar 3 months before you turn 65 to be sure you sign up within the short period.

You may not want to pay for Part B coverage if you are covered under another medical insurance policy. But if you do not sign up while you are covered under another policy or within a specific time period from the end of medical coverage, you will have to pay a penalty on application.

TIP: Contact your local Social Security Administration office or State Health Insurance Assistance Program (SHIP) if you have questions about whether and when to sign up for coverage.

Does Medicare pay for hospice care?

Yes. It pays for certain hospice and home health care services. Medicare covers physician and nursing services, pain medication, medical supplies, physical and occupational therapy and social services counseling.

Caution: Only "medically necessary" home health services are covered. The Medicare program must approve the agency making home visits and your physician must certify that you are terminally ill.

Does Medicare pay for nursing home care?

Medicare will pay some nursing home costs under limited conditions. Medicare beneficiaries must require skilled nursing or rehabilitation services and receive them from a Medicare-approved skilled nursing home after a qualifying hospital stay of at least 3 days. Your physician must certify that you require skilled nursing care. Medicare will pay up to a set number of days of skilled nursing care per illness. It will pay for all covered service for a short period, and then you will be billed a daily fee for the remainder of your stay.

What are "approved" charges?

Medicare determines on a yearly basis what it will pay for specific medical services. Your physician may actually bill you more or less than the Medicare-approved amount. You will be billed for a portion of those services that are above the percentage that Medicare pays for.

What is Medicare+Choice/Medicare Advantage?

Medicare+Choice was renamed Medicare Advantage in 2004. It is private insurance that is subsidized by the federal government. It is sometimes referred to as "Part C." It allows enrolled Medicare participants to choose plans similar to health maintenance organizations (HMOs) or fee-for-service plans. Under this plan, you must have Part A and Part B coverage and still pay Medicare Part B premiums in addition to any premiums required by the private insurer.

Caution: This option is not available in all areas.

What kinds of plans are available under Medicare+Choice/Medicare Advantage?

These "managed care" private insurance plans can be fee-for-service, health maintenance organizations (HMOs) and preferred provider organizations (PPOs).

• Fee-for-service plans. This allows you to choose any physician or hospital. Medicare will then pay a share of the fees for covered Medicare services. You have to pay a monthly premium to the insurance company plus any deductibles or copayments.
• HMOs. These plans have a network of physicians, hospitals and other medical service providers from which you can choose. You must use the doctors or hospitals in this network. You will normally pay a small monthly premium plus copayments for some services.
• PPOs. Under these plans, you can choose your doctor and are encouraged to use him or her as your primary care doctor. But you usually do not need to get a referral from your primary care doctor to see a specialist.
• Medical Savings Accounts (MSAs). This is basically a Medicare-sponsored health care plan with a high deductible. You establish the MSA, and Medicare makes a deposit into your account. You can use these funds to pay for noncovered services and costs you incur before you meet your deductible.

Caution: Each of these plans varies widely. Contact your nearest SHIP to see if one of these plans is right for you.

What is Medigap insurance?

Like Medicare+Choice, private companies, not the government, sell Medigap. It is intended to fill in the "gaps" in Medicare coverage. You must be enrolled in Part A and Part B. If you enroll in Part B after age 65, you must apply for MediGap within 6 months of your enrollment in Part B. Plans generally start at "A" for the least amount of coverage to "J" for the most comprehensive coverage. They cover such things as deductibles, coinsurance payments and may even cover dental and vision care.

What can I do if I think Medicare denied a claim that is covered?

You can generally appeal claims that involve medical necessity, reasonableness and inpatient versus outpatient issues. You must make a written appeal within 60 days of the denial to your local Social Security office. Medicare will notify you of its decision. If you are not happy with Medicare's reconsideration, you have the right to a hearing. You must request a hearing within 60 days of Medicare's reconsideration decision. From this point, you can still make appeals to the Social Security Appeals Council and the federal district court in your jurisdiction if you meet specific requirements.