Medicare is a federal health insurance program for persons 65 or older, persons of any age with permanent kidney failure, and certain disabled persons.
Medicare is administered by the Centers for Medicare & Medicaid Services (CMS), a federal agency in the Department of Health and Human Services. Social Security Administration offices across the country take applications for Medicare, collect premiums, and provide general information about the program. Various commercial insurance companies are under contract with CMS to process and pay Medicare claims, and groups of doctors and other health care professionals have contracts to monitor the quality of care delivered to Medicare beneficiaries. CMS also forms partnerships with the thousands of providers of health care services: hospitals, nursing homes, and home health agencies; doctors; suppliers of medical equipment; clinical laboratories; and managed care plans such as health maintenance organizations (HMOs).
1. In general, what is the Hospital Insurance (Part A) protection provided by Medicare?
Persons protected have benefits paid for certain hospital and related health care services when they incur expenses for such services.
A person entitled to Social Security monthly benefits or a qualified railroad retirement beneficiary is automatically entitled to Hospital Insurance protection beginning with the first day of the month of attainment of age 65. An individual who is insured for monthly benefits need not actually file to receive the benefits. Under limited circumstances, services furnished in Canada or Mexico, or in some cases in the Caribbean, or aboard ship in United States territorial waters, may be paid by Medicare, but otherwise, services furnished outside the United States are not paid for by Hospital Insurance.
3. Who can provide services or supplies under Medicare?
Health care organizations and professionals providing services to Medicare beneficiaries must meet all licensing requirements of state or local health authorities. The organizations and persons listed below also must meet additional Medicare certification requirements before payments can be made for their services:
- Skilled nursing facilities
- Home health agencies
- Hospice programs
- Independent diagnostic laboratories and organizations providing X-ray services
- Organizations providing outpatient physical therapy and speech pathology services
- Facilities providing outpatient rehabilitation facilities
- Ambulance firms
- Independent physical therapists (those who furnish services in the patient’s home or in their offices)
- Facilities providing kidney dialysis or transplant services
- Rural health clinics
All hospitals, skilled nursing facilities, and home health agencies participating in the Medicare program must comply with Title VI of the Civil Rights Act, which prohibits discrimination because of race, color, creed, or national origin.
4. In general, what benefits are provided under the Hospital Insurance (Part A) program?
The program, which is compulsory, provides the following benefits for persons age 65 or older and persons receiving Social Security disability benefits for 24 months or more:
- The cost of inpatient hospital care for up to 90 days in each benefit period (for 2013, the patient pays a deductible amount of $1,184 for the first 60 days plus $296 a day for each day in excess of 60). There are also 60 non-renewable lifetime reserve days with coinsurance of $592 a day in 2013.
- The cost of post-hospital skilled nursing facility care for up to 100 days in each benefit period (the patient pays $148.00 a day in 2013 after the first 20 days).
- The cost of 100 post-hospital or post-skilled nursing facility home health service visits in a spell of illness made under a plan of treatment established by a physician, except that there is 20% cost-sharing payable by the patient for durable medical equipment (other than the purchase of certain used items). Additional coverage for home health care services which do not meet the Part A coverage criteria and visit limitations may be available under Medical Insurance (Part B). (See Q 1008.)
- The cost of hospice care for terminally ill patients.
5. In general, what benefits are payable under Medical Insurance (Part B)?
Medical Insurance (Part B) is offered to almost all persons age 65 or over on a voluntary basis. In addition, the program is offered to all disabled Social Security and Railroad Retirement beneficiaries who have received disability benefits for at least 24 months. For 2013, there is an annual deductible of $147, paid by the patient. This annual deductible is adjusted to reflect the amount of Medicare Part B costs. Medical Insurance pays 80% of the approved charges above the deductible for the following services:
- Physicians’ and surgeons’ services, whether furnished in a hospital, clinic, office, home, or elsewhere, excluding routine or yearly physical exams.
- A one-time initial wellness physical within 6 months of enrolling in Medical Insurance (Part B).
- Screening blood tests for early detection of cardiovascular disease.
- Diabetes screening tests for those at risk of getting diabetes.
- Home health care visits, if not covered under Hospital Insurance (Part A) (but with no cost-sharing except for durable medical equipment, other than the purchase of certain used items). In the past, few home health care visits were covered under Medical Insurance (Part B) but this has changed because of the creation of separate Hospital Insurance and Medical Insurance home health benefits in 1998.
- Outpatient hospital services for the diagnosis or treatment of an illness or injury.
- Diagnostic x-ray tests (including certain portable X-ray services in the home), diagnostic laboratory tests, and other diagnostic tests (no cost-sharing).
- Outpatient physical therapy and outpatient speech-language pathology services furnished by participating hospitals, skilled nursing facilities, home health agencies, outpatient therapy clinics, or by others under arrangements with, and under the supervision of, such organizations.
- Outpatient physical therapy services and outpatient speech-language pathology services provided in a hospital or skilled nursing facility to its inpatients who have exhausted their inpatient days, or are otherwise not entitled to Hospital Insurance benefits.
- Outpatient physical therapy services and occupational therapy services furnished by a licensed, independently practicing physical therapist or occupational therapist in his or her office or the patient’s home, provided the patient is under the care of a physician.
- Rural health clinic services and federally qualified health center services.
- Prosthetic devices (other than dental) which replace all or part of a covered body part, including replacement of such devices.
- Home dialysis supplies and equipment, self-care home dialysis support services, and institutional dialysis and supplies.
- Chiropractor’s treatment by manual manipulation of the spine to correct a subluxation of the spine. But the cost of the chiropractor’s X-ray, if any, is excluded.
- Podiatrist’s services (excluding the treatment of flat foot conditions, subluxations of the foot, and routine foot care that does not require treatment by a podiatrist or physician).
- Leg, arm, back, and neck braces, and artificial legs, arms, and eyes, including replacements where necessary because of a change in the patient’s condition.
- Rental or purchase of durable medical equipment.
- X-ray, radium, and radioactive isotope therapy, including materials and services of technicians.
- Surgical dressings, and splints, casts, and other devices for reduction of fractures and dislocations.
- Ambulance services, under certain circumstances.
- Blood clotting factors for hemophilia patients and items related to its administration.
- Hospital services incident to a physician’s services to an outpatient (including drugs and biologicals which cannot be self-administered).
- Antigens prepared by a physician for a particular patient.
- Annual flu shot (no cost-sharing).
- Pneumococcal vaccine and its administration (no cost-sharing).
- Hepatitis B vaccine and its administration (if beneficiary considered at high or intermediate risk of contracting disease).
- Certified nurse-midwife services.
- Partial hospitalization services provided by a community mental health center or hospital outpatient department.
- Screening pap smear and pelvic exams.
- Prostate cancer screening tests.
- Annual screening mammography for all women age 40 and over (the Part B deductible is waived).
- Colorectal cancer screening.
- Diabetes monitoring and self-management benefits.
- Bone mass measurements.
- The cost of an injectable drug for the treatment of a bone fracture related to post-menopausal osteoporosis.
- Eyeglasses following cataract surgery.
- Services of nurse practitioners and clinical nurse specialists in rural areas for the services they are authorized to perform under state law and regulations.
- Oral cancer drugs if they are the same chemical entity as those administered intravenously and currently covered. Off-label cancer drugs are covered in some cases.
- Necessary medical supplies.
- Immunosuppressive drug therapy.
- Lung and heart-lung, liver and kidney transplants under certain circumstances.
The cost of psychiatric treatment outside a hospital for mental, psychoneurotic, and personality disorders is covered. But coinsurance is usually 50% instead of 20%.
6. Is there any overall limit to the benefits a person can receive under Medicare?
Under Hospital Insurance (Part A), benefits begin anew in each benefit period. In addition, there are no dollar limits under Medical Insurance (Part B) except for psychiatric care and independent physical and occupational therapy. Under Hospital Insurance, care in a psychiatric hospital is subject to a lifetime limit of 190 days. (The time a patient has spent in a hospital for psychiatric care immediately prior to becoming eligible for Medicare counts against the special 150-day limit in the first hospitalization period, but not against the 190-day lifetime limit.)
Separate calendar year caps on coverage of independent occupational therapy and physical and speech therapy services returned January 1, 2006. The annual limitation was initially enacted for 1999, but Congress granted and then extended a moratorium on implementation through the end of 2002. Implementation was further delayed by administration decision until September 1, 2003. The limitation was then eliminated effective December 7, 2003. The Medicare Prescription Drug, Improvement, and Modernization Act of 2003 eliminated the annual limit through the end of 2005. In the Deficit Reduction Act of 2005, Congress added a provision for the Secretary of Health and Human Services to make an exception to the annual limit if the provision of additional services is "medically necessary." The exceptions process allows for specific diagnoses and procedures to receive Medicare coverage even after a beneficiary has met his or her therapy cap for the year. Alternatively, a provider can request an exception if the particular problem to be treated is not automatically covered under the given exceptions. This exceptions process was scheduled to end June 30, 2008, but was extended through December 31, 2009.
7. What care is not covered under Medicare?
Medicare does not cover custodial care when that is the only kind of care the patient needs.
Care is considered custodial when it is primarily for the purpose of helping with daily living or meeting personal needs and could be provided safely and reasonably by persons without professional skills or training. Much of the care provided in nursing homes to people with chronic, long-term illnesses or disabilities is considered custodial care. For example, custodial care includes help in walking, getting in and out of bed, bathing, dressing, eating, and taking medicine. Even if an individual is in a participating hospital or skilled nursing facility or the individual is receiving care from a participating home health agency, Medicare does not cover the stay if the patient needs only custodial care.
8. What are quality improvement organizations?
Quality Improvement Organizations (QIOs) are groups of practicing doctors and other health care professionals who are paid by the federal government to review the care given to Medicare patients. Each state has a QIO that decides, for Medicare payment purposes, whether care is reasonable, necessary, and provided in the most appropriate setting. QIOs also decide whether care meets the standards of quality generally accepted by the medical profession. QIOs have the authority to deny payments if care is not medically necessary or not delivered in the most appropriate setting.
QIOs investigate individual patient complaints about the quality of care and respond to (1) requests for review of notices of noncoverage issued by hospitals to beneficiaries, and (2) requests for reconsideration of QIO decisions by beneficiaries, physicians, and hospitals.
10. Who is eligible for benefits under Hospital Insurance (Part A)?
All persons age 65 and over who are entitled to monthly Social Security cash benefits (or would be entitled except that an application for cash benefits has not been filed), or monthly cash benefits under Railroad Retirement programs (whether retired or not), are eligible for benefits.
Persons age 65 and over can receive Medicare benefits even if they continue to work. Enrollment in the program while working will not affect the amount of future Social Security benefits.
11. Who is eligible for Medical Insurance benefits? (Part B)
All persons entitled to premium-free Hospital Insurance (Part A), or premium Hospital Insurance (Part A) for the working disabled under Medicare, may enroll in Medical Insurance (Part B). Social Security and Railroad Retirement beneficiaries, age 65 or over, are, therefore, automatically eligible. But any other person age 65 or over may enroll provided that she is a resident of the United States and is either (1) a citizen of the United States or (2) an alien lawfully admitted for permanent residence who has resided in the United States continuously during the five years immediately prior to the month in which she applies for enrollment.
Disabled beneficiaries (workers under age 65, widows aged 50-64, and children aged 18 or over and disabled before age 22) who have been on the benefit roll as a disability beneficiary for at least two years are covered in the same manner as persons age 65 or over. (This includes disabled Railroad Retirement beneficiaries.) Disability cases are also covered for 48 months after cash benefits cease for a worker who is engaging in substantial gainful employment but has not medically recovered. (Disability benefits are, under such circumstances, paid for the first nine months of the trial-work period and then for an additional three months.) After 48 months, and during continued disability, voluntary coverage is available in the same manner as for non-insured persons age 65 or over.
12. How does a person enroll in Medical Insurance?
Those who are receiving Social Security and Railroad Retirement benefits will be enrolled automatically at the time they become entitled to Hospital Insurance unless they elect not to be covered for Medical Insurance by signing a form which will be sent to them. Others may enroll at their nearest Social Security office.
The initial enrollment period is a period of seven full calendar months, the beginning and end of which is determined for each person by the day on which he is first eligible to enroll. The initial enrollment period begins on the first day of the third month before the month a person first becomes eligible to enroll and ends with the close of the last day of the third month following the month a person first becomes eligible to enroll. For example, if the person’s 65th birthday is April 10, 2013, the initial enrollment period begins January 1, 2013 and ends July 31, 2013.
13. What if a person declines to enroll during the automatic enrollment period?
Anyone who fails to enroll during the initial enrollment period may enroll during a general enrollment period. There are general enrollment periods each year from January 1st through March 31st. Coverage begins the following July 1st.
The premium will be higher for a person who fails to enroll within 12 months, or who drops out of the plan and later re-enrolls. The monthly premium will be increased by 10% for each full 12 months during which he could have been, but was not, enrolled.