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The ABCs of Medicare

Introduction

As elder-law attorneys, we frequently get asked questions about Medicare benefits. So we have put together the following facts about Medicare and Medicare benefits for our clients and their families:

Medicare 2001

The Medicare program is a system of health insurance for the aged and disabled. It is administered by the United States Department of Health and Human Services through the Health Care Financing Administration and consists of two basic parts:

• Part A provides coverage for the costs incurred by eligible beneficiaries for inpatient hospital care, inpatient care in a skilled nursing facility following a hospital stay, home-health care, and hospice services;
  
  
• Part B is a voluntary program in which eligible beneficiaries who pay a monthly premium are entitled to reimbursement for physician and other medical services and supplies. Medicare does not pay for care that is primarily custodial.

Eligibility
 
Primary Medicare eligibility is linked to eligibility for Social Security retirement and disability benefits. Disabled persons and disabled widows/widowers under age 65 may also be eligible for Medicare. Some persons who are 65 years of age or older, but not otherwise eligible, may purchase this insurance by applying to Social Security.
 

Enrollment

The initial enrollment period begins three months prior to the month of the 65th birthday and continues three months after that. There are substantial penalties for late enrollment. A special enrollment period is available to the working aged and their spouses who delay enrollment because of primary, employer-based insurance.
 

Benefits Under Medicare Part A

Inpatient Hospital Coverage: Medicare Hospital Insurance (Part A) will pay for all medically necessary inpatient hospital care for the first 60 days minus a deductible of $792 (2001) for each benefit period. For the remaining days a beneficiary must pay substantial copayments, which may be covered under a Medigap policy (see discussion below). Major in-hospital services covered by Medicare Part A include a semi-private room, all meals, special-care units including intensive care unit, coronary care unit, regular nursing services and drugs furnished by the hospital during the patient’s stay.


Skilled Nursing Facility Care: Medicare will also pay for up to 100 days in a skilled nursing facility. The first 20 days are covered, but for days 21 through 100, a $99.00 (2001) daily copayment is required. The patient must have been hospitalized for at least three days and be admitted to the facility generally within 30 days after leaving the hospital.


Home Health Care: Medicare also provides home health services which can continue for as long as the beneficiary is under a physician’s plan of care, requires skilled nursing care and is essentially confined to home. Physical, occupational, and speech therapy and the services of a home health aide are available. A prior hospitalization is not required.


Hospice Care: Medicare’s hospice program includes both home care and inpatient care, when needed, and a variety of services not otherwise provided by Medicare. To be eligible, a Medicare beneficiary must be certified by a physician as terminally ill with a life expectancy of approximately six months or less. Those who choose hospice care receive non-curative medical and support services for their terminal illness. Regular Medicare continues to pay for medical treatments not related to the terminal illness.

Benefits Under Medicare Part B


Medicare Medical Insurance (Part B) covers a variety of medical services of particular importance to Medicare beneficiaries, including physician services in and out of the hospital, durable medical equipment, outpatient hospital services, physical, occupational, and speech therapy and ambulance transportation. Part B coverage is voluntary. Most Medicare beneficiaries decide to enroll in the program with their monthly premiums deducted from their Social Security checks. There is a monthly premium of $50.00 (2001) and an annual deductible amount of $100, which must be paid before Medicare benefits are reimbursed. Medicare pays 80 percent of the approved charge for services and the beneficiary is responsible for the 20 percent copayment.



Limiting Charge


There is a cap imposed on the amount doctors may charge their Medicare patients for each service. Doctors may not charge more than five percent above the Medicare-approved rate for most services in New York. In other states, doctors may not charge more than ten percent above the Medicare-approved rate.



Excluded Services Under Part A and Part B


Some services not covered by Medicare Part A are private duty nursing and, generally, a private room. Other services excluded under Medicare Part B are most outpatient prescription drugs, which do not require administration by a physician, routine physical checkups, immunization with some exceptions, eyeglasses or contact lenses, most dental care, and hearing aids. Generally, Medicare will not pay for hospital or medical services abroad or for physician services on ship cruises beyond the territorial waters of the United States.



Medigap Insurance


Medicare beneficiaries generally decide to buy supplemental insurance (Medigap). At present, there are ten standard Medigap policies that may be offered by insurance companies. Plan A is a policy with core benefits that are included in the nine other plans. For further information, request a copy of the Guide to Health Insurance for People with Medicare from the U.S. Department of Health and Human Services, 7500 Security Boulevard, Baltimore, MD, (800)-633-4227 or Social Security (800)-772-1213.



Medicare and Managed Care Plans


Managed care plans are sometimes called "coordinated care" or "prepaid plans" or Health Maintenance Organizations (HMOs). They might be thought of as a combination insurance company and doctor/hospital. Like an insurance company, they cover healthcare costs in return for a monthly premium, which may be waived. Generally, the plans have "lock-in" requirements. This means that an enrolled member is locked into receiving all covered care from the doctors, hospitals, and other healthcare providers who are affiliated with the plan. In most cases, if the enrollee goes outside the plan for services, neither the plan nor Medicare will pay. The enrollee will then be responsible for the entire bill.


Note: It is important to remember that purely custodial care (the type of care that most persons at home or in nursing homes require) is not covered by Medicare or Medigap policies. The only home care or nursing home care that Medicare covers is skilled nursing care or skilled rehabilitation care. Long-term care insurance or Medicaid are the major alternative sources for paying for custodial care.



Medicare Programs for Low Income Elderly


Medicare has established two programs to assist low-income elderly with their medical costs. They are the Qualified Medicare Beneficiaries (QMB) and Specified Low-Income Medicare Beneficiaries (SLIMB) programs. Both programs have a limit on assets and monthly income to qualify. For QMB eligible beneficiaries, Medicaid may cover the costs of monthly premiums, deductibles, and co-insurance. Medicaid may pay the Medicare Part B medical premiums of eligible SLIMB beneficiaries. To find out more about these programs, call Social Security at (800)-772-1213 and ask where to apply for these programs in your area.



Medicaid


Medicaid is a national program for low-income elderly that is administered by individual states. Each state has its own set of requirements and benefits. To inquire about Medicaid eligibility and benefits in New York City, call the Human Resources Administration (HRA) Infoline at (877)-472-8411. For offices in other areas of New York, call the NYS Office of Temporary and Disability Assistance (800)-342-3009. For information in other states, ask for a listing for the Human Resources Administration or Medicaid. Persons having an income somewhat above the eligibility limit but with high medical costs may be eligible for Medicaid under the Medical Surplus Income program.



Summary


More information about Medicare can be obtained from the Medicare Web site at www.medicare.gov.