The A-B-C-Ds of Medicare

Signed into law in 1965 by the Social Security Administration, Medicare began its coverage in 1966.  This health insurance plan will turn 53 years old this year, covering more than 55 million adults over age 65, as well as some adults under 65 who are disabled, suffer from end stage renal disease, or amyotrophic lateral sclerosis (Lou Gehrig’s disease).

President Lyndon B. Johnson signed it into law, and former president Harry S. Truman was issued the first card.  In 1965, the budget allotted $10 billion for this coverage, and about 19 million people signed up for coverage.

No longer part of the Social Security Administration, Medicare-along with Medicaid (an insurance plan for low-income citizens), is covered by the Centers for Medicare and Medicaid (CMS).

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Medicare consists of four parts:

  • Part A:  hospital insurance which is mandatory.  It covers hospital stays of up to 60 days at 100%, as well as skilled care in a nursing facility, home health care—nursing and therapies, NOT personal assistance—as well as hospice care.  Most people receive Medicare A free of any premiums.
  • Part B:  outpatient insurance which is optional.  Typically, it covers such expenses as doctor visits, outpatient therapy, x-rays, chiropractic care, certain vaccinations and other services.  There are premiums to be paid for Medicare B, which, in 2019, is 135.50 per month under a certain level of income.
  • Part C:  this is an option that allows enrollees to receive their services in a capitated style vs. fee for service.  It sets a price that is paid to a practitioner that agrees to cover costs for a designated period of time, whether or not the enrollee utilizes their care.
  • Part D:  initiated in 1997, this is the prescription drug plan approved and regulated by Medicare, but administered through multiple private health and pharmacy companies.

Let’s get to know a few medical scenarios and how Medicare may cover:

  • You are hospitalized with a stroke.  It pays for covered costs for the first 60 days, except for the deductible.  If you go to a skilled nursing facility for rehabilitation after this, it will cover the first 20 days at 100% if you show progress toward your goals set forth by nursing and therapies.  After that, it is covered at 80% if you continue to make adequate progress for up to 100 days.
  • You then return home from the skilled nursing facility, and you need further physical therapy as an outpatient.  Medicare B covers 80% of the Medicare-approved amount.  When you receive these therapy services from a participating provider, your coinsurance amount is 20% after you meet your deductible.  In 2019, this deductible amount is $185.

And what it doesn’t cover:

  • You require further care in a nursing facility after your stroke.  Your therapy has ended because your progress has not been adequate to further qualify you for Medicare A.  No form of Medicare covers this long-term care in a nursing facility.  The majority of Americans (60%-plus) living in long-term care facilities are enrolled in Medicaid, which covers this cost.
  • You also need new hearing aids, and new glasses.  Medicare does not cover any of these expenses.

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Medicare is a multi-faceted, complex and sophisticated program of health coverage for seniors and those under 65 with certain disabilities.  It was initially met with some resistance when it was introduced in 1965, much like the Affordable Care Act (Obamacare) has been resisted in its implementation.  Critics were certain it would never work and would never endure for the long term, but it has 52-plus years of staying power since its implementation.

Prior to its creation, it was determined that a system of health insurance for the elderly would have to be funded by those who had not yet reached that age, because of two reasons:  1)  the elderly have more health issues and need to spend more of their money on health care, thus reducing money available for insurance, and 2) the elderly are typically not working as much as younger people, and don’t have as much flexible income.  Thus, the idea of withholding a Medicare tax was created, and it has survived the test of time.

 

If you are a Medicare recipient, you likely know all this information, and much, much more.  If you are not yet a recipient, you will one day know it.  Regardless of which group you are in, you may not know the following facts about Medicare:

  • More than 55 million Americans rely on Medicare for health care coverage.
  • Enrollment in Medicare A is mandatory.  If you choose not to, then you must repay your social security benefits if you are receiving them.
  • If you work past age 65 and are receiving health insurance from an employer, you can choose to delay receiving this benefit.
  • Once you enroll in Medicare, you can no longer make contributions to a health-savings account.
  • Higher incomes may mean paying higher Medicare premiums. In 2018, these income levels were lowered, thus creating higher premiums for income levels that were not affected prior to last year.  If your income level changes, these higher premiums can be appealed.
  • In general, Medicare offers more coverage choices than many employer plans.
  • While it does not typically cover dental care or glasses, it does cover durable medical equipment such as walkers, wheelchairs, canes, hospital beds, glucose monitors and patient lifts.

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As a not-for-profit agency, Medicare has one goal:  to keep seniors and disabled people healthy, and out of the hospital, and hopefully remaining in their homes.  Several of their provisions illustrate this very well:  When an enrollee requires nursing and/or therapy care in their home, Medicare pays at 100%.  For certain diagnoses, if patients return to the hospital with the same diagnosis that exacerbated after returning home, hospitals face large fines and penalties.  Their goal is to ensure that proper medical care was administered before the patient is discharged.

Medicare fraud has, unfortunately, captured too many headlines in the last few years, and they work tirelessly to reduce this travesty.  Preventing such fraud helps Medicare keep their costs low, allowing them to keep premiums low and benefits high, ultimately keeping enrollees healthy.

Ten thousand Baby Boomers reach the age of 65 every day in the United States, which qualifies them for Medicare.  This “boom” is indeed booming, and this increase in enrollment will continue to challenge the program.  However, it continues to grow strong into its 50’s, and would likely make President Johnson proud to see the strong health care program it has become.

There is a wealth of information online regarding all aspects of Medicare.  Please consult their official website at www.medicare.gov.

And please, do all you can to keep yourself healthy, no matter what your age.  Health and happiness go hand in hand, and Medicare wants you to stay in your home in good health—and in happiness.