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Additional Medicare Information

 

Understanding Medicare
Briefing Paper from BARC of Virginia Commonwealth University -  Extended Medicare Provisions, Vol. 1, Number 1. June, 2003

What is Medicare? 

Medicare is our country’s health insurance program for people age 65 or older, certain people with disabilities who are under age 65 and people of any age who have permanent kidney failure. It provides basic protection against the cost of health care, but it doesn’t cover all medical expenses or the cost of most long-term care.  The Medicare program is financed by a portion of the Federal Insurance Contributions Act (FICA) taxes paid by workers and their employers.  It also is financed in part by monthly premiums paid by beneficiaries. The Center for Medicare and Medicaid Services or CMS (formerly the Health Care Financing Administration or HCFA) is the federal agency in charge of the Medicare program. However, the Social Security Administration determines who is eligible for Medicare, enrolls people in the program, and disseminates general Medicare information

There are two parts of Medicare. Medicare “Part A” which is also known as Hospital Insurance or HI helps pay for care in a hospital and skilled nursing facility, home health care and hospice care.  Medicare “Part B” which is also known as supplemental medical insurance or SMI helps pay for doctors, outpatient hospital care and other medical services.  Anyone who is eligible for premium free Medicare hospital insurance (Part A) can also enroll in Medicare medical insurance (Part B) by paying a monthly premium.

The following chart outlines the two parts of Medicare. 

Coverage Type Other Names Coverage
Part A Hospital Insurance (HI) Inpatient 100% for 60 days of a hospital stay after a deductible paid for benefit period.  Additional coverage has coinsurance. (See Medicare.gov for more information.)
Part B Supplemental Medical Insurance (SMI) 80% of approved customary outpatient charges after a $100 annual deductible. No coverage of prescriptions.

In addition to the monthly premiums, there are other “out-of-pocket” costs for Medicare. These are the amounts a person pays when medical services are actually received, known as “deductibles” and “coinsurance payments”.  The monthly premiums, deductibles and coinsurance for Medicare change each year. The current Medicare charges can be found at www.medicare.gov or by calling the Medicare toll free number at 1-800-633-4227.

What Medicare covers is too complex and extensive to discuss in this briefing paper.  Instead, refer to the www.medicare.gov website for a wealth of information about coverage, supplemental insurance, and service plans in a given geographic area.  As you will see, Medicare is available to many groups.  This document focuses primarily on Medicare issues related to individuals receiving Social Security disability benefits.

Medicare Versus Medicaid

Many people think that Medicaid and Medicare are two different names for the same program. Actually, they are two very different programs. Medicaid is a state-run program designed primarily to help those with low income and little or no resources. Medicare is an entitlement earned by someone who has paid into the Medicare trust fund through taxes on earned income; it is not needs based nor means tested.  The federal government helps pay for Medicaid, but each State has its own rules about who is eligible and what is covered under Medicaid.  In contrast, Medicare is a federally run program that has the same eligibility standards and coverage rules across all 50 states.   Medicaid coverage is typically free (with some exceptions in some States) while Medicare coverage involves premiums, co-payments and deductibles.  Some people get both Medicaid and Medicare.  The Center for Medicare and Medicaid Services (CMS) refers to these people as “dual eligibles”.  For more information about the Medicaid program in your state, contact your local Medicaid agency, social service or welfare office.   You can find the federal rules governing Medicaid at www.cms.gov/medicaid/

Who Is Eligible for Medicare? 

Medicare Enrollment Periods

Eligible individuals may enroll in Medicare only at specific times.  The initial enrollment period (IEP) occurs when people first become eligible for Medicare. The General Enrollment Period (GEP) occurs annually, and a Special Enrollment Period (SEP) occurs when people leave employment that had health coverage.  Social Security beneficiaries are automatically enrolled in Medicare Parts A and B when they first become eligible.  Part A hospital insurance is premium free for these individuals and is not optional.  Social Security beneficiaries who are eligible for Medicare Part A are not allowed the option of declining participation.  However, because a premium must be paid for Part B coverage, eligible individuals do have the option of turning it down. 

There is no premium penalty for months that the person declined Part B of Medicare because of an Employer Group Health Plan.  A person enrolling in Medicare during the SEP may choose to begin coverage with any month of this period.  

Medicare Qualifying Period 

The Medicare Qualifying period is different from the 5-month Social Security disability benefit waiting period. The 24-month Medicare Qualifying Period begins with the first month for which the person is entitled to a payment after the five-month waiting period.  Coverage begins the first day of the 25th month of benefit entitlement.

Medicare for People with End Stage Renal Disease (ESRD)

In addition to Medicare for people who are disabled under the Social Security rules, the SSA has a special type of Medicare for people who have End-Stage Renal Disease (ESRD).  ESRD is a condition of the kidneys caused by many factors that requires dialysis or a kidney transplant.  End stage renal disease Medicare is a special program that is not tied to receipt of cash benefits.  ESRD Medicare has less stringent rules for meeting insured status than do Social Security disability benefits.  This type of Medicare also has different rules for when the coverage begins and when it ends.  People who receive Medicare only because of End-Stage Renal Disease do not have to be otherwise disabled under Social Security regulations.  Unless these individuals are also entitled to cash benefits, they may not access any of the Social Security disability work incentives—including Expedited Reinstatement.

The rules for establishing insured status for ESRD Medicare are much easier to meet than the rules for cash disability benefits.  In fact, a person may receive Renal Medicare coverage on the work record of a spouse, or a parent, even though they may not otherwise meet any benefit criteria. Renal Medicare usually begins with the third month after dialysis begins.  Coverage can begin earlier if the person self-administers dialysis, or was previously entitled to Medicare under the ESRD provisions.  Coverage ends either 12-months after dialysis stops, or 36-months after a successful transplant.

Medicare Qualified Government Employees (MQGE)

MQGE are people who worked and paid Medicare taxes, but not Social Security taxes.  Medicare benefits for these individuals follow all of the same disability benefit rules that benefits for people who also paid Social Security taxes follow.  For example, these individuals must wait twenty-nine full calendar months from the date their disability onset date to become covered under Medicare.  This represents the five full months of the benefit waiting period plus the 24-month Medicare Qualifying Period.  Like people who receive cash benefits, dependants may become entitled on MQGE work records.  These dependants do not receive cash payments.  Rather, if they meet the appropriate requirements for Medicare coverage, they may receive Medicare.  People who receive Medicare coverage under the MQGE program may access all of the work incentives, except for benefit continuation under a Vocational Rehabilitation program when the DDS determines the person has medical improvement, otherwise known as Section 301 payments.

Medicare Supplements or Medigap Plans

Although Medicare is a valuable resource, it does not pay for prescription medications, nor does it pay for all services a beneficiary may need.  In addition, since Medicare involves deductibles and coinsurance payments, some people end up with large out-of-pocket expenditures to manage.  Medicare supplemental insurance policies, also called “Medigap Plans”, may help to meet a beneficiary’s medical insurance needs.  These are private insurance policies that are optional for Medicare beneficiaries to purchase, but which are mandated to exist in each State.  A wide array of plans is available and plans vary significantly in the amount of coverage they provide and how much they cost.  Beneficiaries can go to www.medicare.gov to access interactive electronic tools that compare various Medicare and Medigap plans as well as prescription drug assistance programs in their local area. 

Getting Help with Medicare Premiums and Other Out-of-Pocket Expenses

Certain beneficiaries may qualify for help from their state in paying Medicare premiums and other out-of-pocket medical costs.  States help by providing special limited Medicaid coverage that is mandated and regulated by the federal government.  CMS refers to this assistance as Medicare/Medicaid Dual Eligible programs or Medicare Savings Programs.  These special Medicaid programs are for certain eligible Medicare beneficiaries who have little income and few resources.  This coverage may help pay for all or part of the Medicare premiums, deductibles and coinsurance.  It is important to understand that Medicare Savings Programs are not the same as regular Medicaid coverage.  These programs do NOT pay for services or items that Medicare does not cover, such as prescription medications. 

To qualify for one of the Medicare Savings Programs, the beneficiary must have Part A (hospital insurance), a limited income, and countable resources such as bank accounts, stocks and bonds, must not be more than twice the SSI limit ($4,000 for a single person or $6,000 for a couple). Only the state can decide if a beneficiary qualifies for help under one of these programs.  In most states, the SSI income and resource rules are applied in these eligibility determinations.  There are numerous dual eligibility categories such as Qualified Medicare Beneficiary (QMB), Special Low-Income Medicare Beneficiary (SLIMB) and Qualified Disabled and Working Individuals (QDWI).  Each of these programs has different eligibility criteria and each pays for different types and amounts of Medicare out-of-pocket expenditures.   To find out if a person qualifies for one of these programs, contact the state or local medical assistance (Medicaid) agency, social service or welfare office.  A brief summary of the three most common eligibility Medicare Savings Programs is provided below.   For more information on this complex subject, go to http://cms.hhs.gov/dualeligibles/.

Summary

The rules governing Medicare eligibility, when Medicare begins, and what Medicare covers are complex.   Benefits Specialists may help people understand these provisions, but should remember that the SSA and CMS make the determination whether someone is entitled to Medicare coverage.  Also, the choice of what Medicare plan to take, or what Medigap policy would best meet the person’s needs must be up to the individual.   The Benefits Specialist can be instrumental in this decision making process by knowing what options are available and by presenting the advantages and disadvantages of each option.   


Previous Articles on Social Security:

New Ruling Bucks Up ADA, Olmstead and Services under HCBS Waivers

2003 Student Earned Income Exclusion

Advocacy Skills and the Social Security Administration

Special Medicaid Beneficiaries

Ticket to Work and Work Incentives Advisory Panel- Annual Report to the President and Congress, April 2003

SSI  and Resources Briefing Paper -  VCU’s Benefits Assistance Resource Center Vol. 7, February 2003

Supplemental Security Income and Age 18 Redetermination- Key Facts Vol. 1, No. 2, February, 2003

Advocacy Skills and the Social Security Administration - Key Facts Vol. I No. 1, February, 2003

SSI and Adults with Disabilities: Background, Trends, and a Study of Participation

 

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