Medicare is a federal health insurance program for eligible individuals over age 65, individuals under 65 who have been receiving Social Security Disability Insurance for over two years, and those who have end-stage renal disease or amyotrophic lateral sclerosis. Certain disabled persons under 65 are eligible for Medicare after receiving Social Security disability for 24 months. Medicare entitlement requires that most beneficiaries worked at least 40 quarters (10 years) in Medicare-covered employment and have United States citizenship or permanent residency status. There are no resources and income limits for receiving Medicare benefits, however, the Part B premiums are based upon income. Medicare helps pay certain, but not all, health-care costs.
Part A, the hospital insurance component, is free for persons who worked 40 qualified quarters and covers hospital stays, limited days in a skilled nursing facility, and limited home care and hospice services. Anyone 65 or over who is eligible to receive Social Security or Railroad Retirement benefits is automatically eligible for Part A and pays no premium. Others may purchase this insurance for a monthly premium. Part A covers all approved inpatient hospitalization costs in any benefit period except for a per admission deductible ($1,484.00 in 2021) and a charge/coinsurance for a stay beyond 60 days ($371.00 per day for in-hospital days 61-90; $742.00 per day for in-hospital days 91-150, in 2021). Skilled care in a nursing facility is covered for up to 20 days without a coinsurance payment following at least a 3-day hospitalization in any benefit period, with a coinsurance payment for days 21-100 ($185.50 per day in 2021) and no coverage beyond the 100th day. Home care is available on a very limited basis if it is medically necessary and ordered by a physician for skilled care. Hospice services are also available.
Part B covers medically necessary services including doctors’ services, emergency room services, outpatient care, laboratory services, certain mental health care charges, and other medical and preventive services. For 2021, Part B has a monthly premium ranging from $148.50 for an individual earning up to $88,000 to $504.90 for an individual earning more than $500,000, and a yearly deductible of $203.00. Part A and Part B do not pay for prescription medication, custodial care, long term nursing home care, hearing aids, eye exams, most dental services or dentures, routine foot care (unless the patient is diabetic), private duty nursing, cosmetic surgery, most treatment outside of the United States, and other services which upon review it does not consider as medically necessary. Assistance with premiums based on income is available to qualified applicants through Medicare Savings Programs including 1) Qualified Medicare Beneficiary Program "QMB", 2) Specified Low-Income Medicare Beneficiary Program "SLMB", 3) Qualified Individual Program "QI", and 4) Qualified Disabled and Working Individuals Program "QDWI", as well as through Programs of All-Inclusive Care for the Elderly "PACE", Low Income Subsidy (LIS), and Medicaid.
Part C is the Medicare Advance Plan health care option, similar to an HMO or PPO. Restrictions of the Part C enrollment is that enrollees are limited to medical providers in the plan unless in an emergency, subject to approval. Medicare Part C may have a monthly premium which is dependent upon the plan selected, plus the monthly Part B Premium.
Part D is the Medicare prescription drug coverage plan which provides financial assistance toward prescription drug costs. Part D costs a monthly premium depending on the plan you enroll in, and covers only part of your prescription drug costs with a yearly deductible and a copayment. After the initial coverage limit, you enter a coverage gap or “donut hole” where you pay out of pocket for all prescription drug costs up to the annual cap, after which you become eligible for catastrophic coverage.
Numerous plans are available, and you can review and compare the plans offered at the official government website www.Medicare.org. Depending on your income, you may qualify for help with the Part B premium. Assistance with premiums based on income is available to qualified applicants through Medicare Savings Programs including 1) Qualified Medicare Beneficiary Program "QMB", 2) Specified Low-Income Medicare Beneficiary Program "SLMB", 3) Qualified Individual Program "QI", and 4) Qualified Disabled and Working Individuals Program "QDWI", as well as through Programs of All-Inclusive Care for the Elderly "PACE", and Medicaid.
WHAT IS THE PART B LATE ENROLLMENT PENALTY?
Penalties of 10% per year may be assessed against persons who wait to apply for Medicare if they do not have other "creditable coverage" from ongoing employment. To avoid penalties, it is important that you apply for Medicare when you first become eligible, or that you advise Medicare of your other coverage. You can apply for Medicare three months before your 65th birthday, the month of your 65th birthday, or three months after your 65th birthday. If you do not apply for Medicare benefits within the prescribed time, you will have to wait for the next enrollment period (January 1 – March 31) and your Medicare benefit will not be effective until the following July 1st. Certain enrollment periods are available for persons over 65 with changes in employment status and for other limited circumstances. It is important to apply timely to avoid this penalty. You can apply for benefits at your local Social Security Administration Office, online at www.Medicare.gov. or by calling 1-800-772-1213.
MEDIGAP (MEDICARE SUPPLEMENT INSURANCE)
Medicare pays for many, but not all, hospital and health care services and supplies. A “Medicare Supplement” policy, or “Medigap” policy, sold by private insurance companies, can help pay some of the health care costs (gaps) that Medicare does not cover, including copayments and deductibles. Medigap insurance companies sell 10 standardized Medigap policies identified in most states by letters “A”, "B", "C", "D", "F", "G", "K", "L", "M" and “N”. All of the insurance companies offering this coverage provide the same benefits under their offered standardized plans, allowing you to compare the insurance premiums between them. Not all insurance companies offer all of these plans. A Medicare recipient may purchase a Medigap policy during the enrollment periods without penalty for pre-existing health conditions, however, there may be a six month period of non-coverage.
WHAT TO CONSIDER BEFORE PURCHASING A MEDIGAP POLICY
You must have Medicare parts A and B to be approved for a Medigap policy. You pay a monthly or quarterly premium for your Medigap policy to the private insurer. Each Medigap policy is individual to the insured person only. If you and your spouse both want Medigap coverage, you must each purchase separate Medigap policies. It is important to compare Medigap policies since the costs vary significantly between plans, and the coverage offered varies based upon the coverage offered.
The length of Medicare coverage for inpatient stays in a hospital is determined by the “benefit period” rules. Beneficiaries have 60 days of in-hospital coverage in a benefit period, plus days 61-90 at a copay of $371. They are required to pay the Medicare Part A deductible ($1,484 in 2021) for the first 60 days of coverage, plus the daily copay amount. After exhausting these 90 days of benefit coverage per hospital stay, beneficiaries can use their 60 “lifetime reserve days” which are available once in a lifetime and for which you pay additional copayments. Medigap policies offer coverage for these deductibles and co-pays, as well as for the copays for skilled nursing care days 21-100, depending on the policy purchased.
A benefit period starts when the beneficiary enters a hospital or skilled nursing facility (SNF) and ends when the beneficiary has been out of the hospital or SNF for 60 consecutive days. There is no limit on the number of benefit periods that Medicare will cover in a general (non-psychiatric) hospital. Skilled nursing care coverage generally requires a three-day hospital admission and discharge to the skilled nursing facility for coverage. The SNF copay for days 21-100 in 2021 is $185.50 per day and is currently included in the Medigap "C", "D", "F", "G", "M" and “N” policies, with partial coverage for the "K" or "L" policies.
For questions about applying for Medicare, Medigap, or other senior health-insurance questions, you can contact the Medicare Rights Center, (800) 333-4114; (212) 869-3850 (NYC), the NYC Department for the Aging Helpline, (212) 333-5511, or the Social Security Administration (800) 772-1213.
*Disclaimer: The information contained on this website is provided only as general information and is not intended as legal advice, nor should it be used as a substitute for a complete review of your case by an experienced elder law attorney. All situations differ. By visiting this website, there is no attorney-client relationship established between you and Fern J. Finkel, Julie Stoil Fernandez, or Finkel & Fernandez, LLP.