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Medicare 101: An Overview

Overview

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Medicare is health insurance for people age 65 or older, people under age 65 with certain disabilities, and people of any age with End Stage Renal Disease or ALS. Existing or previous health conditions do not matter when it comes to being eligible for Medicare or the amount of premium for optional coverage.

To receive Medicare, you have to sign up unless you are eligible for Medicare because you receive Social Security Disability Insurance (SSDI) benefits for 24 months. If you are eligible for Medicare because of SSDI, you are automatically enrolled in Medicare at the end of the first 24 month period.

There are two types of Medicare: Original Medicare and Medicare Advantage.

  • Original Medicare:
    • Is a fee-for-service (indemnity) type of health insurance provided by the federal government. Indemnity type policies provide freedom of choice about what doctors to see and what treatments to take.
    • Original Medicare is made up of three parts:
      • Part A covers inpatient care in hospitals and similar settings. It also covers a variety of preventive tests. There is no premium for Part A coverage. All Medicare includes Part A
      • Part B covers other medically necessary services such as a doctor's services. Part B is optional. The insured pays a monthly fee for Part B. 
      • Part D covers prescription drugs. This is also optional coverage that the insured pays a monthly premium for.
    • Private insurance companies offer "Medigap" policies that supplement Original Medicare. Medigap policies are standardized for easy comparison. It is difficult to get Medigap coverage if you have a pre-existing health condition unless you sign up during a period when no health insurance questions are asked, such as when you are first eligible for Medicare. These periods are known as "open enrollment periods". (For information about periods when insureds are guaranteed issuance despite a health history, click here offsite link.)
  • Medicare Advantage (sometimes called Medicare Part C).  
    • Medicare Advantage plans are geared to save people money and/or offer more health benefits than Original Medicare.   
    • A variety of types of Medicare Advantage plans are available. Most restrict patients to using particular doctors and hospitals. For a summary of the different types of health insurance policies, click here. The most popular type of Medicare Advantage plan is a managed care type plan (an HMO).
    • Medicare Advantage plans are provided by private companies approved by Medicare, and must include a minimum set of benefits

Yearly choice

  • Each year there is an Open Enrollment period from October 15 through December 7. During that time you can decide which type of Medicare you want for the next calendar year, and what coverage you want if you choose Original Medicare.
  • If you choose Original Medicare and purchase Part D prescription drug coverage, it is wise to review your options each year to be sure you pay the least for the prescriptions you are likely to need. To quote Philip Moeller, an expert on the area: "People tend to stick with the plan they have, despite overwhelming evidence that they would be better off switching."

Finances: If you have difficulty paying Medicare premiums and costs:

  • There is assistance available. 
  • You can also get health care at a Federally-funded health center (also known as HRSA Health Centers) where deductibles and co-insurance may be reduced or waived all together. To locate a HRSA Health Center, click here. offsite link

Of general interest:

  • It is possible to have both Medicare (either Original Medicare or Medicare Advantage) and Medicaid (Medi-cal in California).
  • Medicare premiums are not affected by your past or current health condition.

Claims:

  • As a general matter, with either Medicare Advantage or Original Medicare, you do not have to worry about submitting bills. However, what you do have to be concerned about is whether the provider files a claim on a timely basis. If not, Medicare won't pay and you will be stuck with the bill. 
  • If you do have to submit a claim and you can't or prefer not to handle a Medicare claim yourself, there are people with expertise available to help. For a list, including what to look for, click here.
  • If your claim is denied, appeal - and keep appealing. Persistence pays off.

For more information, see:

NOTE:

  • Medicare will pay doctors to help patients plan what kind of care they want at the end of life. The discussions can be during an annual wellness visit or during a regular office visit.  The consultation may be repeated.
  • Improvement vs. maintenance: It used to be that Medicare only covered treatment when a patient was improving. Today, Medicare must cover skilled care and therapy when they are necessary to maintain the patient's current condition or prevent or slow further deterioration. (If you are denied coverage and have to spend your own money while appealing, you can ask for reimbusrement as part of your appeal.)
  • Identity theft happens with Medicare just like it happens with credit cards. It is wise to guard your Medicare card and Medicare number. Do not give the number to people who call, no matter how they identify themselves. 
  • If you go into a hospital, check on your status. IWhile this may sound strange, hospitals admit patients on "observation status" as well as in-patient status. Medicare considers "observation status" to be an outpatient status. This means Medicare Part A which covers hospital stays does not cover. Instead, billing will be to Medicare Part B which includes a 20% co-pay. You may also be charged for medications received in the hospital unless they are covered under Part D.  If you are on "observation status" call your doctor and ask to change the designation. If you do receive a bill as an out patient, appeal.

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