Medicare 101

Medicare Insurance PlansIn general, individuals are eligible for Medicare if they (or their spouse) worked for at least 10 years in Medicare-covered employment and are at least 65 years old and are a citizen or permanent resident of the United States of America.

Individuals who are under 65 years old can also be eligible if they are disabled or have end stage renal disease. People under 65 and disabled must be receiving disability benefits from either Social Security or the Railroad Retirement Board for at least 24 months before Medicare automatic enrollment occurs.

Many beneficiaries are dual-eligible. This means they qualify for both Medicare and Medicaid. In some states for those with certain income, Medicaid will pay the beneficiaries Part B premium for them (most beneficiaries have worked long enough and have no Part A premium), and also pay any drugs that are not covered by Part D.

Part A- Hospital Insurance:

  • Part A covers hospital stays (including stays in a skilled nursing facility) if certain criteria are met (the hospital stay must be at least three days, three midnights, not counting the discharge date)
  • The nursing home stay must be for something diagnosed during the hospital stay or for the main cause of hospital stay like for instance, hospital stay for broken hip and then nursing home stay for physical therapy would be covered
  • If the patient is not receiving rehabilitation but has some other ailment that requires skilled nursing supervision then the nursing home stay would be covered
  • The care being rendered by the nursing home must be skilled, as Medicare Part A does not pay for custodial, non-skilled, or long-term care activities, including activities of daily living (ADLs) such as personal hygiene, cooking, cleaning, etc
  • The maximum length of stay that Medicare Part A will cover in a skilled nursing facility per ailment is 100 days (the first 20 days would be paid for in full by Medicare with the remaining 80 days requiring a co-payment)
  • If a beneficiary uses some portion of their Part A benefit and then goes at least 60 days without receiving skilled services, the 100-day clock is reset and the person qualifies for a new 100-day benefit period

Part B- Medical Insurance:

Part B medical insurance helps pay for some services and products not covered by Part A, generally on an outpatient basis. Part B is optional and may be deferred if the beneficiary or their spouse is still actively working. There is a lifetime penalty (10% per year) imposed for not taking Part B if not actively working.

Part B coverage includes physician and nursing services, x-rays, laboratory and diagnostic tests, influenza and pneumonia vaccinations, blood transfusions, renal dialysis, outpatient hospital procedures, limited ambulance transportation, immunosuppressive drugs for organ transplant recipients, chemotherapy, hormonal treatments such as lupron, and other outpatient medical treatments administered in a doctor’s office. Medication administration is covered under Part B only if it is administered by the physician during an office visit.

Part B also helps with durable medical equipment (DME), including canes, walkers, wheelchairs, and mobility scooters for those with mobility impairments. Prosthetic devices such as artificial limbs and breast prosthesis following mastectomy, as well as one pair of eyeglasses following cataract surgery, and oxygen for home use is also covered.

As with all Medicare benefits, Part B coverage is subject to medical necessity. Complex rules are used to manage the benefit, and advisories are periodically issued which describe coverage criteria. On the national level these advisories are issued by CMS, and are known as National Coverage Determinations (NCD). Local Coverage Determinations (LCD) only apply within the multi-state area managed by a specific regional Medicare Part B contractor, and Local Medical Review Policies (LMRP) were superseded by LCDs in 2003.

Part C- Medicare Advantage:

Medicare Advantage plans are referred to as a Part C plan. These are Medicare-approved private health insurance plans for those individuals enrolled in Original Medicare, Part A, and Part B. When you join a Medicare Advantage plan, remember that you are still in the Medicare program and must continue paying your Part B premium.

Medicare Advantage plans provide all of your Part A (hospital insurance) and Medicare Part B (medical insurance) coverage. These plans generally offer additional benefits, such as vision, dental, hearing and many include prescription drug coverage. These plans often have networks, which simply means you may have to see certain doctor’s and go to certain hospital’s in the plan’s network to receive care. Medicare Advantage plans may potentially save you money because of out-of-pocket costs in these plans can be lower than with Original Medicare, Part A, and Part B in some cases.

For more information on Part C or Medicare Advantage plans, check out our dedicated page.

Part D- Prescription Drug Coverage:

As a Medicare beneficiary, one does not automatically receive Medicare Part D prescription drug coverage. This Medicare Part D coverage is optional, but can be valuable if you take medications. If you do not sign up for Medicare Part D coverage when you are first eligible, you might have to pay a late-enrollment penalty if you decide to enroll at a later time.

Many people are automatically enrolled in Original Medicare, Part A and Part B, when they reach 65 years of age. But one may not realize that Original Medicare does not cover most of your medication’s (except those you may receive as a hospital inpatient, or in some cases, outpatient). Medicare Part B covers certain prescription drugs that you get in an outpatient setting, like a doctor’s office. However, these tend to be the kind of medications that you need a doctor to give you, like infusion drugs. If you want help with most other medication costs, you’ll need to sign up for Medicare Part D coverage.

For more information on Part D or Medicare Prescription Drug plans, check out our dedicated page.

Medicare Supplemental Insurance (Medigap)

Medicare Supplemental Insurance or Medigap, is different than Medicare Advantage (Part C), as it supplements Original Medicare only. These plans are offered by private companies, and can help pay some of the costs that Original Medicare does not cover, such as co-payments, co-insurances, and deductibles.

For more information on Medicare Supplements or Medigap, check out our dedicated page.

More A Visual Learner? Here Is A Quick Recap:

Did You Know?: There are varying enrollment periods for Medicare and it can often be quite confusing for people. For instance, you may qualify for a Special Election Period (SEP) if you are on your state’s Medicaid program or receiving “Extra Help” from the federal government with your prescription drug costs, which allow’s you to change coverage anytime, throughout the year.

The Harrin Group offers free, comparative quotes on Medicare insurance plans from multiple insurance carriers so you can get the best possible rate.

Want to see how much we can save you? Just request a quote to find out.

Source: Medicare.gov, Medicare Today, AARP Bulletin