What is Medicare and who is eligible?

Medicare is a national, federally-administered senior health insurance program authorized in 1965 to cover the cost of hospitalization, medical care, and some related health services of those eligible individuals including:

• people age 65 or older,
• people under age 65 with certain diabilities, and
• people of all ages with End-Stage Renal Disease (permanent kidney failure requiring dialysis or a kidney transplant (Loe Gehrig's disease).

Medicare now covers 41 million Americans. It serves everyone regardless of income or medical history. It was never intended to pay 100% of health care costs, but forms a foundation against catastrophic health care costs. You are automatically eligible once you reach age 65.

What are the differences between Medicare Part A and Medicare Part B?

Medicare has 2 parts: Part A (Hospital Insurance), and Part B (Medical Insurance). Medicare Part A helps to cover your inpatient care in hospitals, critical access hospitals, and skilled nursing facilities. Skilled nursing facility care does not include long-term care; it is skilled care only. Medicare Part A also helps to cover hospice care and some home health care if certain conditions are met. Most people don’t pay a premium for Part A because they or a spouse already paid for it through their payroll taxes while working.

Medicare Part B helps to cover your doctors' services and outpatient hospital care. It also covers some other medical services that Part A does not cover, such as some of the services of physical and occupational therapies, and some home health care. Part B helps pay for these covered services and supplies when they are medically necessary, or needed for the diagnosis and treatment of your medical condition.

Is there a cost for Medicare Part B?

You are responsible for paying a monthly payment, or premium, for Part B. In 2006, the premium amount was $88.50 per month. Most beneficiaries have this amount deducted from their social security check. The premium for Medicare Part B usually changes on January 1st of each year.

In some cases, the amount paid for Part B will be higher if you do not sign up for Part B when you first become eligible. The cost of Part B may go up 10% for each full 12-month period that you could have had Part B but did not enroll. You will usually have to pay this extra amount for as long as you have Part B.

Will Part B cover all of my medical expenses?

No. You will be responsible for paying a $124 Part B deductible before Medicare or other insurance will pay their share. Additionally, there is a 20% co-payment amount required for most services. Many people choose to purchase a Medigap Policy to help cover these costs.

What is a Medigap policy?

A Medigap policy is a supplemental health insurance policy sold by private insurace companies to fill "gaps" in Original Medicare Plan coverage. Medigap policies must follow federal and state laws to protect you.

Do I need to buy a Medigap policy?

Medigap policies help pay health care costs only if you have the Original Medicare Plan, sometimes called Medicare "fee-for-service." Whether you need or want to buy a Medigap policy is your decision. You do not need to buy a Medigap policy if you are in a Medicare Advantage Plan (which is often an HMO or PPO), and it may be illegal to sell you a Medigap policy if they know you are in a Medicare Advantage health plan.

How can I learn more about Medicare, Medigap, and other insurance coverage?

Please call the Area Agency on Aging 1-B's Medicare Medicaid Assistance Program (MMAP). The AAA 1-B MMAP program has trained volunteers available to provide information and counseling on Medicare and Medicaid issues, Medigap policies, Medicare Advantage plans, long term care insurance, and quesiton on accessing insurance benefits. There is no fee for the program. Call: 800-803-7174.

Source: Louanne Bakk. Summer 2006. Access: Your link to community resources. Vol. 8, No. 2