This is meant to give a brief understanding of the different options a person has for Medicare. It is noteworthy that states vary and legal health professionals are best suited to plan a strategic way of using both state an federal programs that best suit your situation.
Summary: Medicare is the federal government health care and benefits program that provides prescription benefits, hospitalization coverage, and other health benefits. It is Broken into four main parts (A,B,C,D) and supplemental coverage programs. It is an important part of many people’s lives, especially those suffering from terminal illness or permanent disability.
Eligibility: In order to qualify for Medicare, the one of the following criteria must be met:
- Age 65 or older
- Diagnosed with permanent kidney failure known as End-Stage Renal Disease or disabled form ALS or “Lou Gehrig’s Disease” (there is a 3 month waiting period).
- Qualified for Social Security Disability Insurance or (SSDI)
- There is a 24 month waiting period after a person qualifies for SSDI
- Parts of the SSDI guidelines require a certain number of quarters of tax contribution to the Federal Insurance Contribution Act (FICA). In certain instances, a person may qualify for SSDI due to the FICA contributions of a parent as a Childhood Disability Beneficiary (CDB) or as the disabled spouse of a deceased spouse.
- Must be a legal resident of the United States
- Each part (A,B,C,D) has spate premiums and co-payments, as well as different enrollment processes.
Medicare Program Part A: Hospitalization
Summary: Part A focuses on hospitalization and the related care, expenses. It is useful for those also seeking hospice or home health following a hospital stay.
Enrollment Process: A person is automatically enrolled if they have met the FICA contribution requirements for the Social Security Disability Insurance Program.
What’s Covered:
- Acute Hospitalization
- Limited skill nursing
- Limited home health (following hospital stay)
- Prescription coverage when administered during the hospital stay
- Hospice Care
Limitations:
- Does not cover custodial or long-term care
- Individuals must meet the Social Security Administration’s definition of disability (See Blue Book)
- Income cannot exceed 200% of the federal poverty level (FPL)
Costs:
| Blood | In most cases, the hospital gets blood from a blood bank at no charge, and you won’t have to pay for it or replace it. If the hospital has to buy blood for you, you must either pay the hospital costs for the first 3 units of blood you get in a calendar year or have the blood donated. |
| Home Health Care | You pay:
$0 for home health care services 20% of the Medicare-approved amount for durable medical equipment |
| Hospice Care | You pay:
$0 for hospice care A copayment of up to $5 per prescription for outpatient prescription drugs for pain and symptom management 5% of the Medicare-approved amount for inpatient respite care (short-term care given by another caregiver, so the usual caregiver can rest) Medicare doesn’t cover room and board when you get hospice care in your home or another facility where you live (like a nursing home). |
| Hospital Stay | In 2010, you pay:
$1,100 deductible and no coinsurance for days 1–60 each benefit period $275 per day for days 61–90 each benefit period $550 per “lifetime reserve day” after day 90 each benefit period (up to 60 days over your lifetime) All costs for each day after the lifetime reserve days Inpatient mental health care in a psychiatric hospital limited to 190 days in a lifetime |
| Skilled Nursing Facility Stay | In 2010, you pay:
$0 for the first 20 days each benefit period $137.50 per day for days 21–100 each benefit period All costs for each day after day 100 in a benefit period |
Further Information at http://www.medicare.gov/
Medicare Program Part B: Outpatient Medical Services
Summary: Part B focuses on the costs for non-hospitalization expenses and covers a wide array of services including regular doctor visits and ambulance costs. It is one of the most valuable parts to the Medicare program.
Enrollment Process:
- Automatic Enrollment: Enrollment is automatic with the option to decline the coverage. However, if you are under 65 and not working, then you will be charged a 10% penalty. It is advisable to accept coverage in most instances.
- Annual Enrollment Period: The annual enrollment period is from January 1 to March 31- coverage begins July 1. If SSDI beneficiaries choose not to accept these benefits during the initial enrollment period, they may be subject to a late enrollment penalty, unless they are covered by an special enrollment period.
- Late Enrollment Fee: You may be subject to a late enrollment fee of 10% for each 12 month period you do not accept Part B Medicare.
- Special Enrollment Period:
- If you are working for an employer who covers you under a their health plan and are eligible for Medicare Part B coverage, you can defer enrollment as long as you are employed.
- If you are no longer employed, you have 8 months to enroll without penalties.
- You are eligible for a program called Medigap for the 8 months and do not have to endure the pre-existing condition waiting period.
- COBRA does not extend the 8 month window.
What’s Covered:
- Doctor Visits
- Outpatient medical services
- Lab Tests and X-Rays
- Medical Supplies and Equipment
- Ambulance Services
- Some preventative care services
- Outpatient physical, speech, or occupational therapy
- Some Home health care no covered by Part A
Premiums: Premiums are paid through the SSDI checks you receive or directly if the individual is not receiving benefit checks. For some beneficiaries, the premiums may be paid by Medicare Savings Programs such as:
- QMB (Qualified Medicare Beneficiary)
- SLMB ( Specified Low-income Medicare Beneficiary)
- QI-1 (Qualified Individual-1)
- QWDI?QD (Qualified Disabled Working Individuals)
Costs:
| Part B Deductible | In 2010, you pay the first $155 yearly for Part B-covered services or items. |
| Blood | In most cases, the provider gets blood from a blood bank at no charge, and you won’t have to pay for it or replace it. However, you will pay a copayment for the blood processing and handling services for every unit of blood you get, and the Part B deductible applies. If the provider has to buy blood for you, you must either pay the provider costs for the first 3 units of blood you get in a calendar year or have the blood donated by you or someone else.
You pay a copayment for additional units of blood you get as an outpatient (after the first 3), and the Part B deductible applies. |
| Clinical Laboratory Services | You pay $0 for Medicare-approved services. |
| Home Health Services | You pay $0 for Medicare-approved services. You pay 20% of the Medicare-approved amount for durable medical equipment. |
| Medical and Other Services | You pay 20% of the Medicare-approved amount for most doctor services (including most doctor services while you are a hospital inpatient), outpatient therapy*, most preventive services, and durable medical equipment. |
| Mental Health Services | You pay 45% of the Medicare-approved amount for most outpatient mental health care. |
| Other Covered Services | You pay copayment or coinsurance amounts. |
| Outpatient Hospital Services | You pay a coinsurance or copayment amount that varies by service for each individual outpatient hospital service. No copayment for a single service can be more than the amount of the inpatient hospital deductible. |
Supplemental Medigap Plans
Summary: Medigap plans are designed to give coverge during waiting periods and involves commercial insurance plans. You must be enrolled in Medicare Parts A and B (Original Medicare). Medicare standardizes each program a gives a selection of plan A through L, with each plan having identical benefits but varying premiums.
Enrollment Process:
- The Guarantee Issue Period also known, as the initial enrollment period for individuals under the age of 65 is 3 months before and 3 months after Medicare eligibility.
- If you are under the age of 65 then you can choose from one of the 5 programs during the first six months of voluntary enrollment in Medicare regardless of health status. (With the exception of those suffering from ESRD, who are not eligible)
- There is an option to change Medigap plans during a 30 day window after a person’s birthday, as long as the plan is similar in design.
- If the HMO they are receiving the Medigap care discontinues that service then there is an option to change plans.
What’s Covered: The plan allows choice of physician, provides Medicare’s reduced co-payments and deductibles. There is much more freedom in which physician you can see as compared to the normal Medicare program.
Costs: Premiums may be higher than the normal Medicare plan, especially for those under the age of 65.
Note on Pre-Existing Conditions: There may be up to a 6 month waiting period for pre-existing conditions. However, the waiting period can be shortened, waived, or eliminated of an individual has had at least six months prior, continuous health coverage within the past 63 days.
NEW: Starting June 1, 2010, the types of Medigap Plans that you can buy will change:
There will be two new Medigap Plans offered—Plans M and N. 1.
Plans E, H, I, and J will no longer be available to buy. If you 2. already have or you buy Plan E, H, I, or J before June 1, 2010, you can keep that plan. Contact your plan for more information.
Supplemental Coverage: Medicare Savings Programs
NOTE: Medi-CAL automatically pays Part B Medicare Premiums making Savings Programs Obsolete in California.
Summary: A program administered by state Medicare offices for those eligible for Part A and B who demonstrate financial need. The programs cover all or part of premiums, Co-Payments, or deductibles.
Medicare Program Part C: Medicare Advantage Plans (MA)
Summary: Plan C is a part of the 2003 Medicare Prescription Drug Improvement and Modernization Act of 2003 (MMA). Covers many prescription drugs and covers in a similar way to the Medigap plans, but cannot be used at the same time as a Medigap plan.
Enrollment Process:
- Must be enrolled in parts A and B of Medicare
- Regular enrollment period is November 15th to December 31st for coverage that begins in January.
- There is an additional period from January 1 to March 31 of each year, but if they have prescription drug coverage they cannot switch or enroll at this time unless they are covered under Part D.
What’s Covered: Part C acts more as a plan that reduced costs and can help lower deductibles and co-payments, as well as most plans covering large portions of the cost of prescription drugs.
Pre-Existing Conditions:
- No waiting period for pre-existing conditions
- It is advisable to apply one month before Medicare eligibility
Part C Plans:
| Medicare Managed Care (HMO) |
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| Medicare Preferred Provider Organization (PPO) | May use doctors, specialists, and hospitals within the network, or choose a physician outside of the network but will pay more to do so. |
| Medicare Private Fee for Service |
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| Medicare Specialty | The focus is on specific terminal illnesses and are a better option for AIDs and cancer patients. |
| Additional Information | http://www.benefitseducationcenter.com |
Medicare Program Part D: Prescription Drug Benefits
Summary: A product of the 2003 Medicare Prescription Drug Improvement and Modernization Act of 2003 (MMA), provides a choice of private standard prescription drug benefits with reduced costs on prescriptions if they are on the list. Each region determines which drug plans will be available.
Enrollment Process: You can either enroll in PDP (Prescription Drug Plan) or MA-PD (Medicare Advantage Plan with Prescription Drug Coverage)
- Initial Enrollment Period: First 6 months of Medicare Eligibility
- Annual Coordinated Election: November 15th – December 31st
- Special Enrollment: Some persons may be allowed enrollment outside the normal election periods such as:
- Dual Eligibilities: Medi-Medi and Medicare Savings Programs
- Individual moves into a new service area
- Employer coverage that includes prescription drugs or if you have coverage under Indian health services.
Fees: There is a late enrollment fee of 1% for each month they did not have Part D. This extra cost is paid until the person no longer has Medicare.
| Part D National Base Beneficiary Premium | $31.94 |
| 1% Penalty Calculation | $.32 |
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