Aging Well: Medicare — Know the basics

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— Understanding Medicare is like tackling a Colorado fourteener: Taking the process step by step is easier than analyzing the whole mountain at once.

Medicare is a health insurance program mostly for adults ages 65 and older. Having a firm grasp of program basics will make it easier for a person to take advantage of benefits when they are eligible, avoid penalties and adjust their Medicare options.

The following outlines important points about original, government-managed Medicare Parts A and B. Medicare Part D, for prescription drug coverage, Medicare Advantage Plans and Medigap policies (private health plans that include Medicare-covered services and other benefits or help fill holes in original Medicare coverage) will be addressed in upcoming articles.

Part A: Hospital insurance

What is it? Part A helps pay for hospital stays, skilled nursing facilities, hospice and home health care.

How do you get it? People receiving benefits from Social Security or the Railroad Retirement Board automatically get parts A and B (medical insurance) starting the first day of the month they turn 65 years old. They will have received their Medicare enrollment package and card in the mail three months before their 65th birthday or time of automatic enrollment.

Most disabled people younger than 65 automatically get parts A and B after receiving disability benefits from Social Security for 24 months.

Older adults who still are working and not receiving Social Security benefits but want Medicare can enroll in the program during a seven-month period beginning three months before their 65th birthday. It’s best to do this before the month of their birthday to avoid delayed coverage.

People who don’t sign up when they are first eligible must wait until the next enrollment period, Jan. 1 through March 31 (coverage will begin July 1).

People who initially passed up Medicare because they were covered under a group health plan may sign up during “special enrollment periods” related to their employment and health coverage.

To get more information about your Medicare eligibility or to sign up for parts A and/or B, call Social Security at 800-772-1213 or visit www.socialsecurity.gov/retirement.

■ Premiums

Most people who paid (or whose spouses paid) Medicare taxes do not pay a monthly premium for Part A.

People who are not eligible for premium-free Part A but meet certain requirements can buy it. They may have to pay penalties if they do not buy Part A when they are first eligible to receive it — unless they meet conditions allowing them to sign up during a special enrollment period.

■ Other costs

A deductible and coinsurance apply to each benefit period. A benefit period begins the first day a person enters a hospital or skilled nursing facility and ends when a person hasn’t received inpatient hospital or skilled nursing care for 60 days in a row.

When a person goes into the hospital, he or she pay must pay a deductible of $1,132 (2011 amount). After that, Medicare pays for most costs related to the first 60 days of a person’s hospital stay.

People pay coinsurance or a certain part of their hospital costs for Day 61 through Day 150. They are responsible for all costs for each day beyond 150.

If a person’s hospital stay extends past 90 days during a benefit period, they begin to use “lifetime reserve days,” which are additional days Medicare will help pay for hospital costs. Each person has 60 reserve days that can be used during their lifetime.

Medicare pays most costs related to the first 20 days of a person’s stay in a skilled nursing facility. A patient pays coinsurance for days 21 through 100 of the benefit period and all costs for each day beyond 100.

Medicare pays for medically necessary skilled nursing or home health care but not nonmedical long-term care, such as help with personal care and everyday activities, which may be provided at home or in an assisted or skilled nursing facility. Long-term care insurance is among resources that can help adults plan for their long-term care needs.

Part B: Medical insurance

What is it? Part B helps cover medically necessary doctor services and tests, outpatient care, home health services, durable medical equipment and most preventative health services.

How do I get it? People receiving benefits from Social Security or RRB are automatically enrolled in parts A and B starting the first day of the month they turn 65 years old. A person can opt out of Part B, though they likely will have to pay a penalty if they re-enroll later.

Older adults who are working and not receiving Social Security can enroll in parts A and B (see Part A). People who do not enroll in Part B when they are first eligible will pay a late enrollment penalty if or when they do enroll, unless they fit conditions relating to special enrollment.

■ Premiums

People pay a monthly premium for Part B, which is withheld from their Social Security payments.

Monthly premiums are based on a person’s modified adjusted gross income (adjusted gross income plus tax-exempt interest) from two years prior.

Most people joining Medicare this year will pay the standard monthly premium of $115.40 (not including any late enrollment penalties) and will continue to pay this premium every year unless their income increases significantly. Social Security will notify a person if he or she needs to pay more.

■ Other costs

Deductible: People pay the first $162 (2011 amount) yearly for Part B-covered services.

After satisfying the deductible, they pay 20 percent of most doctor services, outpatient therapy and durable medical equipment. Co-payment and coinsurance amounts also apply to outpatient hospital and other Part B-covered services.

People pay 45 percent of most outpatient mental health care.

Medicare pays or helps pay for most preventative health services, including cardiovascular screenings, bone density measurements, diabetes screenings, flu shots and other immunizations, pelvic exams, prostate and colon cancer screenings and glaucoma tests.

Medicare Part B does not cover routine dental care, dentures, cosmetic surgery, acupuncture, hearing aids or exams for fitting hearing aids.

This article contains information from Medicare.gov and the 2011 “Medicare & You” handbook.

Tamera Manzanares writes for the Aging Well program and can be reached at tmanzanares@nwcovna.org. Aging Well, a division of Northwest Colorado Visiting Nurse Association, is a community-based program of healthy aging for adults 50 and older. For more information, visit www.agingwelltoday.com or call 970-871-7606.

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