Just what is Medicare?

You are entitled to enroll in a Medicare health insurance program if you are over 65, disabled and under 65, or if you have End-Stage Renal disease where hospice care can be provided.

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Four components of Medicare

Part A - Hospital Insurance. You paid into Medicare while you were working and each month a portion of that income went into Medicare. Once you turn 65 there are no monthly payments to receive this coverage. Individuals who don't qualify can buy in for a monthly premium of $423 in 2008.

Part B - Medical Insurance. There may be a monthly premium charge to most people signing up for Medicare.

Part C - Medicare Advantage Plans

Part D (Prescription Drug Coverage) - There also will be a monthly premium charge to most people signing up for Medicare prescription coverage.

Medicare also covers some common items and services such as Ambulance services, Chiropractic services, Clinical trials, Diabetic Self Management Training, Diabetic supplies, Durable medical equipment, Emergency room services, Eyeglasses, Foot exams and treatment, Hearing and balance exams, Kidney dialysis services, Long-term care, Medical nutrition therapy services, Mental health care, Practitioner services, Prosthetic/orthotic items, Second surgical opinions, Smoking cessation counseling, Surgical dressings, Telemedicine in some rural areas, Test-X-rays, MRIs, CT scans, EKGs when medically necessary.

Medicare Part A

As stated above Medicare Part A is the "Hospital Insurance" portion of Original Medicare. For most persons over the age of 65, enrollment in Medicare Part A is automatic. If you are registered with the Social Security Administration, you will receive information and a Medicare ID card approximately 3 months before your 65th birthday.

Medicare Part A is health insurance that helps pay for inpatient medical care:

In the hospital: Semiprivate room, meals, general nursing, and other hospital services and supplies. This does not include private duty nursing, or a television or telephone in your room. It also does not include a private room, unless medically necessary.

Skilled nursing facilities: Semiprivate room, meals, skilled nursing and rehabilitative services, and other services and supplies are covered, but only after a related 3-day hospital stay. Medicare does not cover “custodial care.” Custodial care is care that helps you with usual daily activities such as walking, eating, or bathing. This type of care is often given in a nursing home but is not covered by Medicare. Other payer sources would pay for custodial care such as private pay, Medicaid, HMO or insurance.

Hospice care: Medical and support services from a Medicare-approved hospice for people with a terminal illness, drugs for symptom control and pain relief, and other services not otherwise covered by Medicare. Hospice care is given in your home. However, short term hospital and inpatient respite care (care given to a hospice patient by another caregiver so that the usual caregiver can rest) are covered when needed.

Limited home health care: Part-time skilled nursing care, physical therapy, occupational therapy, speech-language therapy, home health aide services, medical social services, durable medical equipment (such as wheelchairs, hospital beds, oxygen, and walkers) and medical supplies, and other services.

Blood: Pints of blood you get at a hospital or skilled nursing facility during a covered stay.

There are annual deductibles that must be met per benefit period for inpatient hospital services. For prolonged hospital stays, there are daily coinsurance amounts that must also be paid by the Medicare recipient. You might have to pay for Medicare Part A if you were self-employed or didn't work during much when you were younger. If you or your spouse paid Medicare taxes for less than 10 years total, you will have to pay a monthly fee for Part A coverage. In 2008, this Medicare premium is either $233 or $423 per month, depending on your work history. Medicare Part A does not provide benefits for office visits, outpatient care, lab and radiology or ambulance services. These are benefits that are covered under the voluntary Medicare Part B program.

Medicare Part B

Medicare Part B is the "medical services" portion of Original Medicare. Prior to becoming eligible for Medicare, you will be given the option to enroll in Medicare Part B for an additional monthly premium. If you do not accept Medicare Part B when it is first made available to you, there may be a penalty charge that will increase this monthly premium amount. You pay the Medicare Part B premium of $96.40 per month (higher if income is higher than Medicare limits; see www.medicare.gov) in 2008.

Medicare Part B provides health insurance coverage for:

Medical items and other services: Doctors' services (not routine physical exams), outpatient medical and surgical services and supplies, diagnostic tests, ambulatory surgery center facility fees for approved procedures, and durable medical equipment (such as wheelchairs, hospital beds, oxygen, and walkers). Also covers second surgical opinions, outpatient mental health care, outpatient physical and occupational therapy, including speech-language therapy.

Clinical Laboratory Services: Blood tests, urinalysis, and more.

Home Health Care: Part-time skilled nursing care, physical therapy, occupational therapy, speech-language therapy, home health aide services, medical social services, durable medical equipment (such as wheelchairs, hospital beds, oxygen, and walkers) and medical supplies, and other services.

Outpatient Hospital Services: Hospital services and supplies received as an outpatient as part of a doctor's care.

Blood: Pints of blood you get as an outpatient or as part of a Part B covered service.

Additional benefits of having Medicare Part B include coverage for ambulance services, ambulatory surgery centers, blood, bone mass measurement, cardiovascular screenings, limited chiropractic services, clinical laboratory services, clinical trials, colorectal cancer screenings, diabetes screenings and self-management training, diabetic supplies, doctor services, durable medical equipment, emergency room services, limited eyeglass benefits, flu shots, foot examinations and treatment, glaucoma testing, hearing and balance exams, hepatitis B shots, home health services, kidney dialysis services and supplies, mammograms, medical nutrition therapy, mental health care, occupational therapy, outpatient hospital services, outpatient surgical services, pap test and pelvic exams, physical therapy, practitioner services, prosthetics, second medical opinions, smoking cessation programs, transplant services and urgent care.

Some of the covered services under Medicare Part B require a coinsurance or a deductible. Medicare Part B does not provide prescription drug benefits, except for certain injectable cancer drugs. Medicare Prescription Drug coverage is offered through Medicare Part D.

Not covered under either Part A or B

Some of these services may be covered if you elect join one of the other plans offered.

Acupuncture, dental care/dentures, cosmetic surgery, custodial care, eye refractions, hearing aids, hearing test order by someone other than your doctor, long term care, special shoes, some diabetic supplies are not covered.

Medicare Part C

Medicare Part C managed care coverage is provided by private insurance companies through what are known as Medicare Advantage plans. Prescription drug coverage may also be available separately to persons enrolled in a Medicare Part C. The main disadvantage of a Medicare Part C Advantage plan is that the choice of doctors and other healthcare providers is limited. Other restrictions on access to care may apply as well. Finally, a Medicare Part C plan can drop out of a geographic area at any time, leaving enrollees with only a few options for switching coverage.

Medicare Part D

Medicare Part D is the optional prescription drug coverage program that allows Medicare eligible persons to add prescription coverage for an additional monthly premium. These plans are available through private health insurance companies that approved by Medicare. The monthly premium is based on the type of prescription drug plan chosen. You may also be required to pay an annual deductible and coinsurance, which will also vary based on your plan selection. Medicare Part D plans have contracts with specific pharmacies and each has a list of the covered drugs, called a formulary. Know which pharmacies and what drugs are covered under the plan that you select to make sure that the plan meets your needs geographically and medically.

This is often referred to as the Medicare Part D "doughnut hole". In 2008, Part D premiums range from $0-$50 per month (depending on the plans available in your town and on the partiular plan you choose). The deductible -- the amount you must pay out-of-pocket before Medicare will contribute to your prescription costs -- for most plans in 2008 is $275. After you meet the deductible, Medicare will pay roughly 75% of your prescription costs. However, after you and your plan together pay a certain amount for covered prescription drugs ($2,510 in 2008), your plan stops paying anything and you must pay the full cost of the prescription. The plan begins to pay again -- and pays more of the cost than before you fell into the coverage gap -- when total expenditures reach a “catastrophic” level ($4,050 in 2008).