Medicare

Instituted in 1965, Medicare is a program administered by the federal government to assist older Americans, along with others who are disabled, with payment of medical costs. The Medicare program has two parts. Part A consists of coverage for most of the costs involved in a hospital stay; Part B is medical insurance which pays a portion of the cost for doctor and outpatient medical care. In Pennsylvania, Part B is administered by Xact Medicare Services in Camp Hill.

An individual is entitled to Medicare because he/she or his/her spouse paid for it through Social Security taxes. The program is provided to assist senior citizens whose medical bills are typically higher than the rest of the population.

Medicare eligibility still remains at 65 years of age. It is advised you apply 3 months before your 65th birthday, even if you are waiting to apply for social security benefits until full retirement age.

Part A - Hospital Insurance

Part A has two types of eligibility. Most people age 65 or older are covered, for free, based on their work records or on their spouse’s work records. People over 65 but who are not eligible for free Part A coverage based on their work record can enroll and pay a monthly premium. This premium amount changes from year to year.

Part B - Medical Insurance

Anyone who is age 65 or older and a citizen of the United States or a resident of the United States who has been here lawfully for five consecutive years is eligible to enroll in Medicare Part B medical insurance. This is true whether or not they are eligible for Part A hospital insurance. Everyone enrolled must pay a monthly premium and in the year 2006 the premium is $88.50 per month.

Eligibility and enrollment are handled by the Social Security Administration: Chester Office, 807 Crosby Street, Chester, PA 19013 at 800-772-1213 or the Upper Darby Office, 1570 Garret Road, Upper Darby, PA 19082 at 800-772-1213. The website is www.medicare.gov.

The Pennsylvania Department of Public Welfare has various programs that will pay the Part B monthly premium (and in some cases the Medicare deductibles and co-payments) for eligible residents. You can reach the Department of Public Welfare at 610-447-5500.

Cost of Treatment

Part A of Medicare covers most of the costs incurred directly from a hospital as inpatient care. In addition, some of the costs of inpatient treatment in a skilled nursing facility may also be covered. However, doctors’ bills are not covered under Part A as they fall under Part B. To be eligible for Part A hospital insurance coverage, the care and treatment must be medically reasonable and necessary. This means that if the treatment could safely be given in an outpatient setting at the doctor’s office or even at the patient’s home, Part A will not provide coverage. It also rules out elective or cosmetic surgery. To be covered by Medicare Part A, a stay in a skilled nursing facility must be preceded by a stay in a hospital and the patient’s doctor must verify that the individual requires daily skilled nursing care. During each benefit period, the individual must pay the hospital insurance deductible before Medicare will pay anything toward the incurred bill; in 2006 the deductible is $952.

Medicare will cover up to 100 days of skilled care in a skilled nursing facility during any one benefit period and the first twenty of these days is covered 100%. For the balance of the days, the patient is responsible for the daily co-payment, which in 2006 is $119.00 per day. Once a person has been in a skilled nursing facility for 100 days in a benefit period, there will be no further coverage from Medicare Part A and the patient will be totally responsible thereafter.

Part B medical insurance requires that the services by the doctors, clinics and laboratories are medically necessary. Only a few preventive medical procedures are covered by Part B. One such covered service is a mammogram every twelve months if performed in a certified facility. However, in 2005, there will be increased preventative services covered such as initial wellness physical exam, blood tests for heart disease and diabetes screening tests.

Normally, Medicare Part B pays on average about one-half of an individual’s total medical bills. Since there are often balances remaining, Pennsylvania has enacted the “MOM” law, which forbids any doctor from billing patients for the balance of the bill above the approved Medicare amount. There is an annual deductible of $124 per year. You can call the Pennsylvania State Department of Aging at 717-783-8975 if your doctor is attempting to bill you for any amount above the amount Medicare approves. The doctor can bill the patient for the 20% of the approved fee not paid by Medicare. This is why it is important to have supplemental insurance.

Appeals of Denials of Benefits

If you are denied Medicare benefits, you have the right to an appeal, which is somewhat complicated. Pennsylvania has a program called “APPRISE” wherein trained volunteer counselors provide free one-on-one assistance or telephone assistance with eligibility and benefits questions for all people over the age of 60, their families or their caregivers. You can call them toll free at 800-783-7067, or contact the APPRISE Office in Delaware County by calling 610-566-6248. Also in Pennsylvania, if you are denied admission to a hospital, are asked to leave the hospital before you feel well enough, or are dissatisfied with the quality of hospital care, contact Quality Insights of Pennsylvania (QIO) at 800-322-1914 or www.qipa.org. You can also call the Medicare Hotline at 800-Medicare (800-633-4227) or TTY/TDD at 877-486-2048 or the website at www.medicare.gov.

As a general rule, no Medicare coverage is available outside the USA with one exception: a citizen of the USA would be covered in Canada if s/he were en route to Alaska.

Questions concerning Medicare Part B should be addressed to Xact Medicare Services, P.O. Box 890065, Camp Hill, PA 17089-0065; telephone 800-633-4227 or contact the Apprise program through Horizons Unlimited at 610-566-6248.

NOTE: Many Medicare appeals – whether traditional or managed care – are successfully won by the consumer. It is worth your time to question and seek review. If you are in an HMO and services are reduced or denied, you have a right to an expedited appeal (72 hr. review). Call HMO Member Benefit Department and state “I am calling to request an expedited 72 hour decision because I believe my health could be seriously harmed if my services are cut or reduced.

Program Changes

Medicare rules and program availability are going to change. One way to keep current is to refer to the Medicare handbook which is periodically mailed to every person covered under the Pennsylvania program, or call 800-633-4227 or go to the website at www.medicare.gov to get help with your Medicare questions. You may also request a Medicare handbook on audiotape, in large type or in Braille.

Supplemental Health Insurance

Even after Medicare pays its portion of an individual’s medical bills, the remaining balance can be staggering. Therefore, it is recommended that people purchase some type of private insurance to pay all or part of that balance. Because such insurance policies are designed to fill the gaps in Medicare payments, the term “Medigap” has developed. There are a wide variety of plans available depending on the amount of coverage sought.

However, There are Three Basic Options:

1. Option One (Traditional Medigap)

You receive a Medicare Card (the red, white and blue card with Medicare parts A&B) and purchase a Medicare Supplemental insurance policy. These policies, also known as Medigap policies, are used as secondary insurance. Medicare is billed first for covered medical services, pays its share and then the secondary insurance receives the bill and pays its share. In this type of policy, seniors do not have a “provider network;” there are no co-pays; patients do not need a referral and are covered anywhere in the country. There are ten standardized policies referred to as Plan A through Plan J. Plan A offers the most basic coverage while Plan J offers the most extensive. In Pennsylvania, there are over 40 companies that sell Medigap Insurance. All the Plans are regulated by the federal government; so that they offer the same benefits BUT they are not all at the same price for the same plan. It pays to shop for the best price. (Example: Plan B with one company offers the same basic benefits as Plan B in another company, but the price can vary).

2. Option Two

Medicare Managed Care Plans are called “Medicare Advantage Plans.”

3. Option Three (Preferred Provider Organization - PRO)

Although beneficiaries receive a provider directory, they may self refer to a primary care physician and need no referrals to see specialists. However, there are increased deductibles and co-pays. An example of a PPO is Personal Choice.

WARNING: Medicare Part D is discussed in the Prescription Drug Assistance section. However, be very careful to coordinate your Medigap Insurance with the drug plan you choose.