Additional Medicare Information
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.
Who Is Eligible for Medicare?
Individuals age 65 and older who are insured for Retirement benefits under the Social Security program either through their own work, or through a spouse’s work
Individuals receiving Social Security Disability Insurance (SSDI) who have met the 24-month qualifying period for Medicare.
Individuals receiving benefits as a Childhood Disability Beneficiary (CDB) who have met the 24-month qualifying period that begins no earlier than the person’s eighteenth birthday.
Individuals who meet the Social Security disability standards and who are either entitled to disabled Widow(er)s benefits (DWB) or Medicare on a deceased worker’s record and who have met the 24-month qualifying period
Individuals who lost cash Title II disability benefits due to work and are in the Extended Period of Medicare Coverage (EPMC).
Individuals with disabilities who have worked beyond their Extended Period of Medicare Coverage (EPMC) and are eligible to purchase Medicare Parts A and B coverage as a Qualified Disabled and Working Individual (QDWI).
Individuals who have End-Stage Renal Disease (ESRD) who have been receiving dialysis for three months, or who have been performing self-dialysis for one month. Note that people receiving Medicare under the End-Stage-Renal-Disease provisions do not have to meet a 24-month qualifying period. Individuals who have Amyotrophic Lateral Sclerosis (ALS) also do not have to meet the 24-month qualifying period beginning 7/1/01.
Government employees who paid only Medicare taxes and meet any of these above categories
People who are age 65 or older, are not insured for Social Security Retirement benefits, and pay a premium for both parts of Medicare.
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.
General Enrollment Period (GEP) - Each calendar year, eligible individuals who do not have Medicare Part A and/or B may enroll during the General Enrollment Period. The General Enrollment Period lasts from January first, through March thirty-first of each year. When people enroll during the GEP, Medicare coverage begins the first day of July of the year in which the request was made. If more than twelve months have elapsed between the time the person first could have received Medicare and the time the beneficiary actually enrolls, the premium may be higher. This is because a premium surcharge is levied for not accepting Medicare coverage when it was first available. The monthly Medicare Part B premium increases 10 percent for each 12-month period an individual was eligible but didn’t enroll. This premium surcharge will be applied unless the beneficiary is eligible for a Special Enrollment Period.
Special Enrollment Period (SEP) - Individuals covered by a qualified Employer Group Health Plan (EGHP) based on a spouse’s work or the individual’s current employment and for whom Medicare coverage would be secondary to the employer policy, may be eligible for a Special Enrollment Period (SEP). The Special Enrollment Period is a time during which an individual may enroll in Medicare Part B if:
The beneficiary was covered under a group health plan based on the beneficiary’s own current employment, or based on the employment of the beneficiary’s spouse, and
The individual refused or terminated Medicare Part B, and
The person wishes to enroll in Medicare Part B during the 8 month period that begins the first full month after the employment or group health plan coverage ends, whichever occurs first.
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.
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.
Qualifying period for Childhood Disability Beneficiaries (CDB) - The Medicare Qualifying Period of Childhood Disability Beneficiaries may not be met before the beneficiary’s 20th birthday, since the qualifying period can’t begin before the month of the individual’s 18th birthday. The 24-month MQP clock will not begin ticking until the month of the 18th birthday, so the earliest point at which Medicare could begin is in the 25th month after this point, which would be the age of 20. Individuals who become re-entitled to CDB will not have to serve another 24-month qualifying period if the re-entitlement occurs within 7 years. Keep in mind that re-entitlement to CDB on the same parental work record may never occur after 7 years from the last termination.
Qualifying Period for Disabled Widow(er)s Benefits (DWB) - For Disabled Widow(ers) Beneficiaries, the Medicare Qualifying Period may be met through current entitlement to DWB benefits, or may be met with prior entitlement to SSI benefits. People who receive DWB benefits may also continue to receive Medicare based on a DWB benefit, even if they are entitled to a type of Title II cash benefit that does not usually confer Medicare eligibility on the beneficiary. Like CDB benefits, a person may not be re-entitled to Disabled Widow(er)s benefits if the prior termination was more than 7 years in the past. Also like CDB benefits, a DWB does not have to serve another 24-month qualifying period if the person becomes re-entitled to DWB within 7 years.
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.
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.
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/.
The Balanced Budget Act of 1997 also prohibited “balance billing” of beneficiaries in cases where States use State Medicaid fee limits as the basis of QMB payment. This means that the amount paid by Medicare plus the payment made by QMB Medicaid (if any) is considered to be payment in full for the services rendered. The beneficiary may not be billed for any remaining balance after the Medicare and QMB payments have been made. The QMB has no legal liability for payment to a health care provider or health maintenance organization (HMO) for services. However, a provider or HMO may pursue payment for Medicare deductibles, coinsurances, or co-payments from a Medicare supplemental insurance policy (Medigap Plan) or an employer health plan that the Qualified Medicare Beneficiary participates in.
Beneficiaries and Benefits Specialists need to check with the state Medicaid agency for more information about what is covered and at what level of payment. It is important to understand that beneficiaries receiving QMB may also have full Medicaid under another category of eligibility. Many concurrent beneficiaries getting both SSI and SSDI cash benefits have Medicare, Medicaid and QMB coverage.
***NOTE: Specifically, section
4714 of the Balanced Budget Act of 1997 amends section 1902(n) of the Social
Security Act to clarify that a State is not required to provide any payment
for any expenses incurred relating to Medicare deductibles, coinsurance, or
co-payments for QMBs to the extent that payment under Medicare for the
service would exceed the amount that would be paid under the Medicaid State
plan if the service were provided to an eligible recipient who is not a
Medicare beneficiary. Thus, a State's payment for Medicare cost-sharing for
a QMB may be reduced or even eliminated because the State is using the State
Medicaid plan payment rate. In situations where the rate payable under the
State Medicaid plan exceeds the amount Medicare pays, but is less than the
full Medicare-approved amount, the policy described Section 3490.14 of the
CMS State Medicaid Manual continues to apply. Section 3490.14 of the
State Medicaid Manual requires States to pay, at a minimum, the difference
between the amount Medicare pays and the rate Medicaid pays for a Medicaid
recipient not entitled to Medicare. The CMS State Medicaid Manual can
be found at
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