Medicare: The Basics
Federal Health Insurance Program Offers Complex Tangle of Benefits
Medicare is the nation's largest health insurance program. It covers 39 million elderly and disabled Americans and offers two components: Part A (sometimes called hospital insurance) and Part B (sometimes called supplemental medical insurance).
Caregivers and seniors alike can find themselves confused about Medicare. What does it cover? What doesn't it cover? Sometimes seniors decide not to go to the doctor because they fear large medical bills they cannot afford to pay and don't realize Medicare can help them. Other times seniors and caregivers can get terribly frustrated when they assume Medicare will pay for something and find out too late it doesn't.
Under the standard program, called the Original Medicare Plan, beneficiaries can go to any doctor, specialist, or hospital that accepts Medicare. In some areas of the country, consumers can choose instead to join a Medicare managed-care plan or HMO. Out-of-pocket expenses may be lower than with Original Medicare but the choice of service providers may be more limited.
Part A helps pay for necessary medical care and services provided by Medicare-certified hospitals, skilled nursing facilities, home health agencies and hospices. It covers up to 90 days of inpatient hospital care in each benefit period. In some circumstances, additional coverage is available for up to 150 days.
A benefit period begins on the first day the beneficiary receives services for a particular condition in a hospital or skilled nursing home and ends after the senior has been home from the facility and not received care in any other facility for 60 consecutive days. There is no limit to the number of benefit periods the senior can have.
In each benefit period, the patient pays the following amounts for inpatient hospital care:
In each benefit period, the senior in a skilled nursing facility pays:
Nothing for the first 20 days
Up to $97 per day for days 21-100
All costs beyond the 100th day in the benefit period
Under certain circumstances, Medicare Part A will cover some home health care services, such as intermittent skilled nursing care, and certain medical equipment, such as a wheelchair or walker. It also helps pay for hospice care for eligible terminally ill patients who select the hospice care benefit.
The doctor and the hospice medical director must certify that the senior has a terminal illness. In addition, the senior must sign a statement choosing hospice care instead of routine Medicare-covered medical benefits, and a Medicare-approved hospice program must provide the care.
Medicare Part B helps pay for outpatient hospital services, emergency room visits, ambulance transportation, physicians' services, diagnostic tests, laboratory services, outpatient therapy services, some preventive care and a variety of other services. Part B also pays for some home health services not covered by Part A.
Medicare Part A will not pay for what are called convenience items, such as televisions or telephones provided by hospitals or skilled nursing homes, private rooms unless medically necessary or private duty nurses. Medicare Part B does not pay for most prescription drugs, routine physical examinations or services not related to treating an illness or injury. Part B also does not pay for hearing aids, eye examinations, glasses, dental care or dentures, or routine foot care.
The only type of nursing home care Medicare will pay for is short-term rehabilitative treatment in a skilled nursing facility after a hospital stay or injury. Medicare does not pay if the senior needs help only with activities of daily living like bathing, eating or dressing.
Many seniors have additional health insurance through private retirement packages and pension plans; others purchase Medigap policies. These plans often cover prescription drugs and other items and services Medicare does not. Those with limited incomes may also be eligible for Medicaid.
Sometimes you or the senior may disagree with a decision about whether a service is covered by Medicare or the amount the program will pay on a claim. You have a right to appeal such decisions.
If you are appealing a decision made by a service provider, the provider should send a notice about why it believes Medicare will not pay and also file the notice with Medicare. You will then receive an official determination from Medicare, called a Notice of Utilization. If you disagree with the Notice of Utilization, the notice itself includes instructions for appealing.
If you are appealing a decision made by an intermediary on Medicare Part A claims, it must be within 60 days of receiving official notification from the intermediary (the company which administers Medicare Part A in your state). To appeal, contact either the intermediary or Social Security.
If you disagree with a decision on a Part B claim, you have six months from the date of the decision to ask the company that administers Medicare Part B in your state to review the decision. If you still disagree, you can ask to have a hearing before a hearing officer.
Finally, peer review organizations (PROs) decide whether care provided to Medicare patients is medically necessary and of good quality. If the senior is admitted to a Medicare-participating hospital, the senior or caregiver will be given a notice called "An Important Message from Medicare." This notice will contain the name, address and phone number of the PRO in your state and describe your appeal rights.
You can find up-to-date information about Medicare at www.medicare.gov