Medicare

Case Three: If they are also eligible for Social Security Disability Insurance and are diagnosed with Lou Gehrig’s disease (known as Amyotrophic Lateral Sclerosis – or ALS).

It should be noted that people that are disabled either have to wait for two years before being eligible for Medicare, and unless they are eligible for Medicaid, will have no government sponsored medical insurance at all. It is also important to note that if you are dual-eligible, both for Medicare and Medicaid, you will also get coverage for Part B (Medical Insurance), as well as for some drugs not covered by Part D (Prescription Drugs).

Medicaid is quite a different story and is not an insurance policy program as such, but a social protection policy that has varied benefits for members depending on income. It’s definitely worth checking out if you are eligible for both programs, especially if your income is low.

Medicare insurance comes in several parts with varying degrees of services covered. There are four major parts in Medicare;

• Medicare Hospital Insurance,
• Medicare Advantage, and
• Medicare Prescription Drugs.

Initially Medicare consisted of hospital and medical insurance (Parts A and B). Since 1997 the Medicare Advantage became an option (Part C), and since 2006 Medicare Part D also became available, a prescription drug coverage option.

It has to be noted though that Parts A and B are somewhat interconnected. If the beneficiary or the spouse is still working, only then can they opt out of Part B. If you do opt out and no one in the couple actively works, there is a ten percent per year penalty. So it may optional, though it does not pay to opt out, in effect constituting an automatic opt-in.

That means non-skilled, long-term care or custodial care like day-to-day activities like washing, cooking, cleaning are not covered. Only medically necessary recovery time is covered. That amount of time can be one hundred days at most, per ailment. The first twenty days are paid in full by Medicare, while the next eighty days require co-payment (since 2010, $137.50 daily). If a person uses up some of those 100 days, after a period of 60 days without recovery treatment has lapsed, the 100 day period available for recovery is reset.

Medicare Part B – Medical Insurance. Part B of Medicare covers some services that are not covered by Part A, usually on an outpatient basis. As mentioned earlier, unless one of the spouses in a couple is still working, opting-out of Part B incurs a yearly penalty of 10%, so it is not advised to do this in most cases. Typically 80% of the approved services are covered by Medicare, with the rest being paid by the patient himself.

The services covered by Part B are many fundamental health services. It covers the more usual and common x-rays, laboratory tests, as well as vaccines for pneumonia and the flu. It also covers more serious practices such as blood transfusions, renal dialysis, surgical procedures, and even chemotherapy. Utility services such as limited ambulance transportation are also covered, as well as outpatient medical treatments that can be administered in a doctor’s office. Hormonal treatments and immunosuppressive drugs (essential for a recent organ transplant patient) are also covered. Drugs are only covered if administered during an office visit.

Medicare Part B also provides for durable medical equipment, usually meaning prosthetics or mobility impairment aids. Such equipment includes canes, walkers, mobility scooters, as well as wheel chairs. Prosthetics covered include artificial limbs and breast prosthetics after mastectomy for breast cancer patients. For those with cataract surgery, a pair of eyeglasses is covered, and people with chronic breathing difficulties are covered with oxygen for home use.

Coverage criteria are extensively complicated and might change on a yearly basis. There are National Coverage determinations on the national level that describe these criteria, and on the local level there are Local Coverage Determinations that are specific to a multi-state area managed by a Medicare Part B contractor. For more in-depth coverage information you can refer to the Internet-Only Manuals from CMS (the Centers for Medicare Services), the Code of Federal Regulations, the Social Security Act, as well as the Federal Register.

Medicare Part C – Medicare Advantage. Since 1997, beneficiaries of Medicare were given the opportunity to replace the original Medicare plans (Parts A and B), with private health insurance plans. Since 2003 these plans have been supplemented with coverage of prescription plans, and are now called Medicare Advantage.

In a Medicare Advantage plan, Medicare pays the private health a set amount for each member, thus covering the equivalent Parts A and B of the private health plan. Each beneficiary then pays a monthly premium in order to cover services not covered in the original Parts A and B, the traditional Medicare. Such services include prescription drugs, dental care, vision care, as well as gym or health club memberships.

These services though must be provided via certain health providers only; usually a network of providers that have been agreed upon from beforehand. If the beneficiary chooses to, he can use health providers outside that network but that may require extra fees or require special permission to use them as part of his or her coverage.

Another noteworthy aspect of Medicare Advantage is that these private health plans have to meet or exceed the standards set for Medicare Parts A and B, but they do not have to cover all benefits in the same way. That effectively means that the same amount of insurance money is diverted in different ways, emphasizing the specific needs of the beneficiary. For instance, a plan might offer completely free doctor visits while at the same time the beneficiary would have less coverage in a nursing facility. A plan may provide for more prescription drugs, but add more expenses for medical equipment, and so on.

Medicare Part D – Medicare Prescription Drugs. Since 2006, the coverage of prescription drugs has been made available for Medicare beneficiaries who choose to enroll in either a standalone prescription drug plan or Part C of Medicare (Medicare Advantage) with prescription drug coverage. Both plans are approved by Medicare, but they are actually administered by private health insurance companies.

Effectively this means that each health insurance company offers various plans for prescription drugs, by selecting which drugs and at which level they are being covered. These plans might also leave out certain drugs completely with no coverage. Some drugs are specifically excluded from Medicare, such as barbiturates and you cannot claim costs for these drugs through Medicare. For those who are also eligible for Medicaid, drugs not covered by Medicare might be covered by Medicaid (such as benzodiazepines).

• Almost all beneficiaries have access to at least two Medicare Advantage plans.
• Eighty two percent of beneficiaries have access to six or more private plans.
• Medicare Advantage beneficiaries have been found to spend fewer days in hospitals, and were admitted less often.

There are premiums, deductibles and coinsurances associated with Medicare. In this respect people who also qualify for Medicaid should do so since it can cover some or all of the various extra costs associated with Medicare. Be reminded that any extra costs mainly relate to people that have not paid Federal Insurance Contributions Act taxes for 10 years.

Part B (Medical Insurance) incurs an insurance premium of somewhere around $100 to $300, depending on the beneficiary’s income. These costs are deducted automatically from Social Security checks and do not constitute an out-of-pocket cost.

Parts C and D (Medical Advantage and Prescription Dugs), are widely varied from plan to plan depending on the private health company and as such the premiums and extra costs are not standardized – do your homework on pricing before you apply for anything.