Medicare Information

All About Medicare

To get the best possible service from your Medicare Supplement Plan, you need to know exactly what Medicare actually covers.

What is Medicare?

Medicare is special medical insurance, designed for people that are 65 years old or older, those people under the age of 65 with certain medical conditions or disability, and any person that has been diagnosed with End-Stage Renal Disease (permanent kidney failure that requires either dialysis or a kidney transplant). Medicare is usually pretty good about paying most of the medical expenses incurred, but can leave very large gaps that could possibly financially devastate you in the event that you need medical services. In order to avoid this, you can enroll into a Medicare Supplement policy. These policies help cover the costs that Medicare does not cover.  

So How Does Medicare Actually Work?

Medicare is a federally funded government program, that uses a fee-for-service plan, in which a fee is generally charged each time you go to see a doctor or receive treatment. This amount is controlled by the federal government. To use Medicare, you simply show your red, white, and blue Medicare card when you receive medical care or receive treatment. You are able to go to any provider that accepts Medicare, provided that they are currently accepting new Medicare patients. You may possibly qualify for Medicare Supplement or a Medigap policy, such as a Medicare Advantage Plan. These are offered through Medicare and use a private insurance company. They may pay some (or all) of the costs that you original Medicare plan may not cover. If you do not have any additional coverage, you can find additional supplemental insurance from private insurance agencies. If you qualify for a Medicare Advantage plan, there is usually no monthly premium, but they generally have a higher deductible, and are more restrictive of which doctor or hospital is covered.

The Many Parts of Medicare
Medicare covers multiple different types of care, and is split into 4 different parts. Medicare can cover hospital insurance, medical insurance, drug coverage, and a combination of the 3.

  • Medicare Plan A (Hospital Insurance): This Medicare plan will cover you while you are being treated in a hospital as an inpatient. Facilities covered under this include skilled nursing facilities, hospice, and some home medical healthcare, provided you meet certain requirements, and your doctor approves it.
  • Medicare Plan B (Medical Insurance): This Medicare plan will cover the expenses of doctor services and general outpatient care. It will also cover certain preventive services that will help you maintain your health, and to help prevent certain illnesses from becoming worse. This plan has a deductible, after which Medicare starts paying. There is usually about a 20% co-payment on this plan for covered services and supplies.
  • Medicare Plan C (Medicare Advantage Plan): This plan combines Plan A and Plan B, and on occasion, Plan D. These types of plans are monitored and managed through private insurance companies, each approved through Medicare. This type of coverage must cover any medically necessary service. Plans like this are able to charge various copayments, as well as varying coinsurance and deductibles on these types of services.
  • Medicare Plan D (Prescription Drug Coverage): This plan covers prescription drugs prescribed by your doctor. This plan is designed to help lower the cost of prescription drugs, and can possibly even help prevent higher drug prices in the future.

So What Does my Medicare Cover?
Medicare will help cover you during certain medical procedures, services, and supplies, in hospitals, doctors’ offices, and other healthcare settings. Depending on the type of service or treatment, the visit will be covered under either Part A or Part B. Those people that have enrolled into both A and B, the visit will be covered, provided that the visit was needed to maintain reasonable health, no matter the coverage you choose.

So What is Plan A Coverage?
People that are enrolled in Plan A are covered after reaching a $1,132 deductible. This coverage applies to inpatient care at hospitals, including inpatient rehabilitation centers, critical access hospitals, hospice care services, home healthcare services, inpatient stays at skilled nursing facilities, and inpatient care any Religious Nonmedical Healthcare Institution (although the coverage is restricted to only non-medical and non-religious care). There is no premium for coverage in Plan A, provided that either you or your spouse has paid Medicare taxes from work. If you are not able to qualify for premium-free Plan A, you can still purchase the coverage if you meet the following requirements:

  • You did not work or did not pay Medicare taxes while working, and are currently age 65 or older.
  • You are currently disabled and are currently working.

NOTE: The 2010 premium for people that have to purchase Plan A is at $455 a month. Usually, if you wish to purchase Plan A, then you have to currently be enrolled (or enroll into) Plan B, and pay the monthly premium for Plan B as well. Depending on your current financial status, your state may help pay a portion of the coverage.

When Can I Sign Up to Get Plan A Coverage?
Those people that are currently receiving Social Security benefits, or benefits from the Railroad Retirement Board (RRB), are automatically enrolled into Plan A coverage, starting the first day of the month that you turn 65. Those people that are disabled and are younger than 65 are also automatically enrolled in the plan with benefits beginning the same time that your Social Security benefits or RRB benefits begin, and last for 24 months. You will receive your Medicare card in the mail, usually within about 3 months, before you turn 65 years old, or your 25th month of disability benefits. If you are diagnosed with ALS (also known as Lou Gehrig’s disease) are automatically enrolled into Plan A the month that their disability benefits start. If you are not automatically covered by Plan A, and wish to purchase this coverage, you can enroll during certain times of the year. These times include:

  • The Initial Enrollment Period: This is the time frame surrounding your 65th birthday. This time period begins 3 months before your birthday month, and lasts for another 3 after your birthday month, giving you 7 months to enroll.
  • The General Enrollment Period: You can enroll under this at any time, beginning on January 1st through March 31st, of each year.
  • Special Enrollment: You qualify for special enrollment provided that you have group health coverage provided by either your employer or through a union, or if your spouse receives coverage through their work, or union.

What Does Plan A Cover?
Plan A covers a wide range of things, including: hospital stays, blood transfusions, home health services, hospice care, and skilled nursing facility care.

  • Hospital Stays: Plan A will cover hospital stays in semi-private rooms with meals, general nursing, and medications related to your inpatient treatment, as well as other required services and supplies. You can receive care at any Medicare accepted acute care hospital, critical access hospital, as part of a clinical research study, and for mental healthcare. Plan A does not cover private rooms (unless required medically), private nurses, and telephones and televisions in the room. If your stay is mental health related, there is a 190 day maximum for inpatient psychiatric care over the period of a lifetime.
  • Blood: While most hospitals get blood for free from local blood banks, and generally do not charge for the blood they give you. There might be charges for the supplies and the administration of blood. If they do have to purchase the blood, you are required to pay for the first 3 pints. The 4th pint of blood, and any following, is covered, provided you receive them at any hospital or skilled nursing facility.
  • Home Health Services: Coverage is limited to necessary and reasonable intermittent and part time care, as well as continuing care such as physical or occupational therapy,  and speech-related pathology, provided that it is ordered by your doctor. The service you choose must be a Medicare-certified home health service. This coverage may also cover some of the medical supplies, such as wheelchairs, oxygen tanks, walkers, and hospital beds, as well as medical supplies, for use at home.
  • Hospice Care: Plan A will cover those people that are diagnosed with a terminal illness, and have been given 6 months or less to live. Plan A will cover the medical, drug, and support service costs, if you use a Medicare-certified hospice program. People that are in hospice may also qualify for services not usually offered, such as grief counseling. Medicare will cover healthcare administered in home, and may also cover short-term inpatient stays for symptom and pain management, as well as respite care up to 5 days.
  • Skilled Nursing Facility Care: Coverage under Plan A includes healthcare by a skilled nursing facility, in a semi-private room, with meals, and skilled nursing and rehabilitation services. To qualify, you have to be admitted as an inpatient at a hospital for more than 3 days that is related to your injury or illness. To qualify for nursing care, you must have a need for skilled care, such as a requirement of intravenous injections, or physical therapy. Long term care and custodial care is not covered under Plan A.

So What is Plan B?
Plan B coverage is medical insurance coverage, and will help cover any medically necessary services such as outpatient care, doctors services, and other services that are not covered in Plan A. Plan B will also help cover some preventive services. You can tell if you are covered by Plan B by looking at your Medicare card. It will state on the card if you are currently enrolled in the program.

So How Much Will Plan B Cost Me?
Plan B has a monthly premium of $115.40 (2011). If you are currently single (as in you file your tax return as an individual), and make more than $85,000, or if you file jointly (married) and your combined income is over $170,000, your premium will be higher.  There is a required yearly deductible that has to be paid before Medicare will begin paying.

When Can I Sign Up for Plan B Benefits?
People that are currently receiving benefits from either Social Security or the Railroad Retirement Board (RRB) will be automatically enrolled into Plan B on the very first day of the month that you turn age 65. Those people that are under the age of 65 and are currently disabled are also automatically enrolled into Plan B, for a period of 24 months. You should receive your Medicare card in the mail about 3 months before your 65th birthday, or after 25 months of disability benefits. Those that have been diagnosed with ALS (also known as Lou Gehrig’s disease) are automatically enrolled in Plan B the same month that the benefits begin. You can choose to decline Plan B services. All you have to do is follow the instructions that came with the card, and return the card back to Medicare. By keeping the card, you are confirming that you wish to keep the coverage. If you currently are not receiving any benefits from Social Security or the RRB, you can still sign up for Plan B closer to your 65th birthday. There are multiple times when you are able to sign up for Plan B coverage, including:  

  • The General Enrollment Period: This period begins January 1 and goes through March 31st, with coverage beginning on July 1st. Unless you qualify for a special enrollment period, the cost for coverage of Plan B goes up by 10% for each year that you decline Plan B and qualify for it. This penalty may be applicable the entire time you are enrolled in Plan B coverage.
  • Special Enrollment: If you or your spouse currently has a group health insurance coverage plan either through work or because they are disabled, then you can sign up for Plan B coverage at any time, and can sign up for coverage for 8 months after employment ends or the coverage ends, whichever is first.
  • Special Enrollment (International Volunteers): If you did not sign up for Plan B coverage because you were volunteering in a foreign country, you usually are not required to pay the late enrollment penalty when signing up for Plan B.

What is this Late Enrollment Penalty for Plan B?
Those people that do not sign up for Plan B when they are first able to might be subject to a 10% cost increase for each year that you declined Plan B coverage. If you or your spouse currently has health coverage from their place of work, then usually the penalty is waived.

What Does Plan B Cover?
Plan B covers the following:

  • Deductible: Plan B has a yearly deductible that is required before Medicare will begin paying. In 2011, the deductible was $162.
  • Blood: While most hospitals get blood for free from local blood banks, and generally do not charge for the blood they give you. There might be charges for the supplies and the administration of blood. If they do have to purchase the blood, you are required to pay for the first 3 pints in any given year period, or have the blood donated to you. You will also be required to pay a copayment on units of blood given while in outpatient care.
  • Clinical Lab Services: You are required to pay $0 for any Medicare-approved service.
  • Home Health Services: You are required to pay $0 for any Medicare approved service, and will be required to pay 20% of the amount of any medical equipment.
  • Medical and Other Services: For most doctor services there will be a 20% fee for any Medicare-approved service, including most services received while hospitalized. Other covered services include: outpatient therapy, durable medical equipment, and most preventive services.
  • Mental Health: If you are required to participate in outpatient mental healthcare, there is a 45% copay.
  • Other Covered Services: You are required to pay any copayment or any coinsurance payment required.
  • Outpatient Hospital Services: The copayment or coinsurance payment amount varied on a case by case basis, as well as for each individual outpatient service. The copayment for a single service will not be more than the inpatient hospital deductible.

NOTE: There might be a limit on the amount of physical, occupational, and speech-language therapy services in 2011. There might be exceptions to some of these limits.
Medically-Necessary Services: this means that the service or item is required either to help determine the diagnosis of a problem, or to help with treatment.
Preventive Services: This means that the service will either prevent or lessen the complications of a pre-existing condition, a service that is designed to find a problem early, to allow for better treatment, or to help manage a medical condition.
The Medicare Advantage Plan will cover all of these services. Because of this, the cost of the services might vary based on your plan. Refer to your individual plan for your costs.

What You Will Pay for with Medicare Plan B Covered Services
The prices for Plan B services depend on the type of plan you are under and the type of service that you receive. If the service is “No Cost”, then there is no fee for the service, and that Medicare will pay the entire amount. If the service is “You pay coinsurance”, then you are required to pay the coinsurance payment, usually about 20%, for any Medicare approved service. If your service is “You pay coinsurance and Plan B deductible”, then you are required to pay the coinsurance payment, usually about 20%, and meet the requirements for the Plan B deductible, before Medicare will begin paying for the service.

So What is Not Covered by Plan A and Plan B?
Medicare coverage will cover most of your medical needs, but does not cover everything. Some of the things that Medicare does not cover include:

  • Acupuncture
  • Chiropractic Services (with the exception of subluxation)
  • Cosmetic surgery
  • Custodial care
  • Deductibles
  • Coinsurance
  • Copayments
  • Dental Care and Dentures (Some exceptions apply)
  • Eye Care (including routine exams, eye refractions, and most glasses)
  • Routine Foot Care (such as cutting off corns and calluses)
  • Hearing devices (such as hearing aids, hearing tests (not ordered by a doctor) and exams for fitting of hearing aids)
  • Lab Tests not listed
  • Long Term Care (such as custodial care in a nursing home)
  • Orthopedic Shoes (some exceptions apply)
  • Routine or Yearly physicals (With the exception of the onetime physical given upon enrolling in Medicare)
  • Prescription Drugs (Prescription drugs administered outpatient are not covered under Plans A and B. If you have Plan D, you will have prescription drug coverage)
  • Insulin and Syringes (Insulin is covered if it is used in conjunction with an insulin pump. Insulin might be covered as well under Plan D)
  • Health care received while travelling outside the United States

What Are Plans C and D?
Plans C and D are the Medicare Health and Prescription Drug plans. These plans also have monthly premiums, and are in addition to the premium of Plan B (and Plan A if you do not qualify for Plan A premium-free.) To find out more about these types of coverage, please get in touch with Medicare. They will be able to let you know the actual premium for these plans.
For a more complete review of Medicare and its benefits, as well as the rights and protections of the program, as well as answers to many of the frequently asked questions, by downloading the brochure  Medicare and You.