Understanding the Medicare Health Insurance Program
Medicare is a Federal Health Insurance Plan for people who are over 65 or suffering from a certified disability under the Social Security Program or suffering from end stage renal disease.
There are different parts to the Medicare Program:
Part A covers Hospital Insurance
Part B covers other Medical Insurance including doctors’ services, outpatient care, medical supplies and preventative care
Part C covers the Medicare Advantage Plans. These are health plans that are offered by private insurance companies that contract with Medicare to provide all of the Part A and Part B benefits. They include Health Maintenance Organization (HMO), Preferred Provider Organization (PPO), private fee for service plans, special needs plans, and Medicare medical savings account plus. Once enrolled in these plans the services are covered through the plan including prescription drugs (with most plans).
Part D covers prescription drugs. These plans are offered through insurance companies approved by Medicare and Medicare Advantage Plans.
How to Apply for Medicare
When applying for Medicare, recipients can sign up for Part A and Part B coverage. Part B requires payment of a premium. There is also a deductible of $166/year (2018). The premium for Part B, called a deductible, can be found on the Medicare website at https://www.medicare.gov/your-medicare-costs/part-b-costs/part-b-costs.html. As listed on the United States Government Site for Medicare, the following table outlines the Medicare Part B premiums:
If your yearly income in 2016 (for what you pay in 2018) was
You pay each month (in 2018)
File individual tax return
File joint tax return
File married & separate tax return
$85,000 or less
$170,000 or less
$85,000 or less
above $85,000 up to $107,000
above $170,000 up to $214,000
above $107,000 up to $133,500
above $214,000 up to $267,000
above $133,500 up to $160,000
above $267,000 up to $320,000
Source: Medicare.gov, Part B Costs (https://www.medicare.gov/your-medicare-costs/part-b-costs/part-b-costs.html)
Note: If Part B is not elected there may be a late enrollment penalty later on. The penalty will be up to 10% for each 12 month period the recipient was eligible for Part B but elected to defer unless the recipient qualified for a special enrollment period. As stated on the United States Government Site for Medicare, the special enrollment period is defined as “A time outside the yearly Open Enrollment Period when you can sign up for health insurance…You qualify for a Special Enrollment Period if you’ve had certain life events, including losing health coverage, moving, getting married, having a baby, or adopting a child.”
For individuals eligible at 65 the initial enrollment period begins 3 months prior to their 65th birthday including the month of the recipient’s birthday and ends 3 months after their birthday.
Ms. Jones turns 65 on July 31, 2018. She is eligible for enrollment from May 1, 2018 and the enrollment ends October 31, 2018.
Individuals who do not enroll in Part B during the initial enrollment period will have the opportunity each year to sign up during the General Enrollment period from January 1 to March 31. Coverage will begin on July 1 of the year of enrollment. Individuals who are already enrolled in Medicare Part A and want to sign up for Part B must complete the CMS-40-B Application for Enrollment in Medicare Part B (Medical Insurance). Once completed it can be taken or mailed to the local Social Security office.
Note: Anyone who has Medicare can get Medicare prescription drug coverage. People with limited income and resources may also be eligible for extra help through Medicaid and EPIC (see discussion on Medicaid and EPIC).
Application for Medicare Online
Certain individuals can apply for Medicare Benefits online. These individuals include:
Individuals who are at least 64 years and 9 months old
Individuals who want to sign up for Medicare but do not currently have any Medicare coverage
Individuals who do not want to start receiving Social Security benefits at this time, and
Individuals who are not currently receiving Social Security retirement, disability or survivor’s benefits
For more information on Medicare Benefits please contact https://www.ssa.gov/benefits/medicare/ or call Family Care Connections at (516) 428-9323 (LI) or (718) 470-6300 (NYC).
What is the Scope of Coverage under Medicare?
Medicare is the country’s Health Insurance Program for people age 65 or older, certain people younger than 65 who are chronically disabled or people suffering from end stage renal disease. Medicare does not cover 100% of the actual In Hospital (Part A) and Medical (Part B) costs associated with care. There are certain deductibles and co-payments that apply. A discussion of the deductibles and co-payments is explained below.
A deductible is the portion of the cost the patient is responsible for. Medicare recipients should consider purchasing a Medicare Supplemental Insurance Policy (Medigap) Insurance plan to cover the deductibles/gaps. A review of the deductibles/gaps is explained below.
Part A (In Hospital)
Day 1-60 = $1,340 (2018)
Day 61-90 = $335/day (2018)
Day 91-150 = $670/day (2018)
Beyond 150 days = 100% cost paid by patient
Life time Reserve days (60 days for lifetime)
Note: Inpatient psychiatric treatment is limited to lifetime
Other Part A Deductibles
Skilled Nursing Care in a Skilled Nursing Facility is as follows:
Day 1-20 = Each benefit period is $0
Day 21-100 = $167.50/day
Beyond 100 days = 100% cost paid by patient
Medicare covers Skilled Nursing Facilities if the facility conditions are met: 3 consecutive days in a hospital, not including the day of discharge.
Note: Observation does not count towards the 3 days of stay
Mr. Johnson (86) is brought to the local hospital ER because he is having difficulty anxiety and disorientation. While at the hospital he is not admitted but held in the ER for 3 days for observation, ultimately going home. This stay will not qualify Mr. Johnson for post hospital coverage in the Skilled Nursing Facility.
Medicare Part B
Medicare Part B comes in two types of services. The first type of service is Medically Necessary Services. This includes support and services that are necessary to diagnose and treat a medical condition according to the Acceptable Standard of Care. There is usually a co-pay deductible for these services. The second type of service is Preventative Services. These services include healthcare necessary to prevent illness such as a Flu Vaccine or to detect an illness at an early stage when treatment will be most effective.
Note: If a healthcare provider accepts assignment then these services will be provided without cost to the patient.
Part B also covers additional services and equipment such as clinical research, ambulance services, durable medical equipment (i.e. hospital beds, walker, wheelchair, etc.), mental health services (Inpatient/Outpatient), partial hospitalization, second opinions, for surgery, and limited outpatient prescription drugs.
How to Choose the Right Medigap (Medicare Supplement Insurance) Plan to Cover the “Gaps” in Medicare Coverage?
As previously discussed, Medicare does not cover all cost of healthcare. For many Medicare recipients, one solution is to purchase a Medigap or Medicare Supplement Insurance Policy. These policies are underwritten by private insurance companies with strict requirements under State and Federal Law. These policies are designed to fill some of the “gaps” in Medicare Part A and Part B.
Note: These policies do not supplement the Medicare Advantage Plans. Before deciding on a Medigroup policy it is important to review what other health insurance the Medicare recipient has in addition to Medicare.
If a person has a comprehensive retirement health plan, a Medigroup may not be necessary. However, if there is no additional health insurance it would be prudent to look at Medigroup policies that cover the following:
Part A deductibles + co-insurance (the 20% that Medicare does not cover) for in hospital stays
The patient co-insurance for doctor visits under Part B services as well as lab visits
First three pints of blood annually
Post hospital rehabilitation co-payments after day 20. Co-insurance applies for days 21-100 and 100% after day 100.
Coverage for durable medical equipment and other services
Note: Medigroup policies do not cover long term care that includes attention to activities of daily living (ADL) such as bathing, dressing, eating and toileting. Also excluded is vision care, eyeglasses, hearing aids, dental care, private daily nurses and prescription drugs above Part D coverage.
The time to enroll in a Medigroup policy plan without penalty is during a six month period that begins on the first day of the month in which you turn 65 or older and are enrolled in Medicare Part B.
If your birthday is September 14 the best time to enroll is September through February.
During this one time period you cannot be turned down for a Medigap policy based on a preexisting condition. After the enrollment period a person can be turned down for a preexisting condition under a Medigap policy.
Finally, when shopping for a policy look to insure that 20% of doctor visits is covered, 20% of lab tests and other outpatient services are covered, all deductible for in hospital stays and post rehabilitation and the deductible for each time the patient is admitted to the hospital. Look to see if there is any cost sharing and how much out of pocket costs there will be. Generally Medigap Plan F is the most popular. However, there are many plans including A,B,C,D,F,G,K,L,M or N that cover some or all of the above gaps. A thorough evaluation of your personal finances and healthcare needs is essential to choose the right plan.
Frequently Asked Questions Regarding Medicare and its “Gaps”
Q: Does Medicare cover 100% of all medical expenses?
A: No, Medicare covers approximately 80% of the approved costs of healthcare.
Q: What can the consumer do to cover the “gaps”?
A: Consumers can purchase a medical supplemental insurance policy to cover the “gaps” that Medicare
does not cover.
Q: Can a medical supplemental insurance policy be purchased at any time?
A: No, these policies can be purchased when a person becomes eligible for Medicare and during the
enrollment period which is October 15, 2018 – December 7, 2018 (2018). During this time, individuals
can also change their policies.
Q: Is there a limitation for pre-existing conditions when buying a supplemental insurance policy?
A: Yes, during the initial enrollment a person cannot be turned down for coverage (this period is for the
first six months when a person becomes eligible for Medicare). There after a person can be turned
down for pre-existing conditions. Therefore individuals should give serious consideration to purchasing
a plan when they first become eligible.
Q: Are there specific “gaps” that the policy should cover?
A: The policy should cover the following -
Part A In-Hospital deductibles and co-pays
Part B co-insurance of 20% for doctor and lab costs
Post hospital rehabilitation for day 21-100
3 pints of blood
Prescription drug co-insurance
Also, if a person travels frequently outside of the United States his/her coverage for care outside of the United States is advisable.