Medicare

Medicare is a social health insurance, which means that health coverages are subsidized and implemented through federal government administration of tax money and social programs. Originally enacted by Congress in 1965, the program has seen numerous modifications through the years. It's managed by the Health Care Financing Administration (HCFA), a division of the U.S. Department of Health and Human Services (HHS). At the local level, district Social Security Administration offices receive Medicare enrollment applications, process claims, and provide general information to the public about the program. Social Security does not make Medicare policy, however; it simply handles the paperwork.

To make Medicare benefit payments, the U.S. Government contracts with selected private insurance companies. The insurance companies that make coverage and payment decisions with respect to services provided by hospitals, skilled nursing facilities, home health agencies and hospices are called intermediaries. The insurance companies that handle claims with respect to services provided by physicians and other providers are called carriers.

People who have reached the age of 65 are automatically eligible for Medicare. Persons under 65 may also be eligible under certain conditions. Those who have been eligible for disability benefits for 24 months or have end stage renal disease (kidney failure) are eligible regardless of age. Survivors and dependents of these individuals may also qualify for Medicare coverage under certain circumstances. Additionally, others under 65 may electively purchase Medicare coverage for a monthly premium.

Medicare benefits are divided into two parts: Part A - Hospital Insurance, and Part B - Supplementary Medical Insurance. Enrollment in Part A is automatic for individuals entitled to Social Security benefits. These persons are eligible for Part A benefits as of the first day of the month in which they reach the age of 65.

Enrollment in Part B, on the other hand, is voluntary and requires the payment of a monthly premium. When individuals become eligible for the hospital insurance coverage under Part A, they will also be automatically enrolled in Part B and their premium payment established unless they sign a form indicating that they do not want the Part B coverage. Those who choose not to enroll during their initial enrollment period may do so later. A general enrollment period occurs each year from January 1st through March 31st. When enrollment occurs during this period, coverage will begin on the following July 1st.

Part A provides coverage for four different kinds of care: inpatient hospital care, skilled nursing facility care, home health care, and hospice care. The services covered under each of these arrangements are, however, subject to certain limitations.

Hospital insurance under Medicare does not cover private duty nursing, charges for a private room (unless it's medically necessary), conveniences such as a telephone or television in the hospital room, or the first three pints of blood received during a calendar year (unless they're replaced by a blood plan).

Medicare Part B provides coverage for three general kinds of medical services: doctors' services, home health care (if not covered by Part A), and outpatient medical services and supplies. Part B also requires cost-sharing by the patient. There is an annual deductible, as well as a coinsurance percentage (generally 20%) which applies to all Part B covered services. The patient is also always responsible for paying for the first three pints of blood received annually.

Medical insurance under Part B does not cover these services: private duty nursing; skilled nursing home care costs for more than 100 days per benefit period; intermediate nursing home care; most outpatient prescription drugs; or physician charges above Medicare's approved amount (the "reasonable and customary" figure). Part B also doesn't pay for care received outside of the United States (although limited coverage exists for Canada and Mexico); custodial care received in the home; dental care, routine physicals and immunizations, cosmetic surgery, acupuncture, eyeglasses, hearing aids and orthopedic shoes; or expenses incurred due to war or an act of war.

Medicare Part C provides medical and other benefits (known as Medicare Advantage Plans) through federally-approved private health benefits companies. Individuals can choose a plan that's structured either as an HMO, PPO, or PFFS (private fee-for-service).

Medicare Part D, which is the optional Medicare prescription drug coverage, provides help for the high costs of prescription drugs. This coverage is available as a standalone prescription drug plan or as part of a Medicare Advantage plan.

For more detailed information about Medicare and its benefits, please visit the website at www.Medicare.gov.