Appendix N.

Medicare

Available Topics:

What is Medicare?

How do I Enroll in Medicare?

What is Medicare?

Medicare is a national health insurance program for seniors and people with disabilities, regardless of income. Anyone over 65 who is eligible for Social Security or Railroad Retirement Benefitsóa program similar to Social Security for railroad employees, their spouses and survivorsóis automatically eligible. People with disabilities who have received Social Security Disability Income for at least 24 months and some people who are receiving regular dialysis or have received a kidney transplant because of kidney failure are also automatically eligible.

U. S. citizens are automatically eligible for Medicare. Permanent legal residents who have been continuously residing in the United States for at least five years are also eligible, but must file an application.

The Medicare program is divided into two sections. Part A is hospital insurance that covers hospital care as well as skilled nursing facility, hospice and home health care. Part B is medical insurance that covers physiciansí fees, therapy services, ambulance services, laboratory tests, supplies and durable medical equipment, such as a wheelchair.

Under Part B, recipients must pay an annual deductible, after which Medicare generally will pay 80 percent of its approved charge for medical care. Unfortunately, many health care providers charge substantially more than Medicareís approved charge for their services, and the recipient must pay for any charges that are above the approved Medicare rate.

Many health care providers, however, ìtake assignment,î which means that they agree to accept Medicareís approved charge as payment in full. Medicare pays eighty percent of the approved charge, while the recipient pays the remaining twenty percent. Local Medicare carriers have a directory of all doctors and suppliers in the area who always take assignment.

Enrollment in Medicare

Enrollment in Medicare is handled in two ways: either by automatic enrollment, or by application. Persons already getting Social Security or Railroad Retirement benefits upon turning 65 are enrolled automatically in both Part A and Part B. A Medicare card is mailed to the recipient about three months before his or her 65th birthday. Disabled persons who have received Social Security or Railroad Retirement Board disability benefits will automatically get a Medicare card in the mail after receiving benefits for 24 months.

All others must apply for Medicare. This can be done by contacting any Social Security Administration office, which can provide details of when to apply. Delays in enrollment generally result in an increase in the premiums to be paid, however.

Donít put off enrolling. If you wait 12 or more months to sign up, your premiums generally will be higher. Part B premiums go up 10 percent for each 12 months that you could have been enrolled but were not. The increase in the Part A premium (if you have to pay a premium) is 10 percent no matter how late you enroll for coverage.

Under certain circumstances, however, you can delay your Part B enrollment without having to pay higher premiums. If you are age 65 or over and have group health insurance based on your own or your spouseís current employment, or if you are disabled and have group health insurance based on your current employment or the current employment of any family member you have a choice:

• You may enroll at any time while you are covered by the group health plan, or;
• You may enroll during a special eight-month enrollment period that begins the month employment ends or the month you are no longer covered under the employer plan, whichever comes first.

If you do not enroll by the end of the eight month period, youíll have to wait until the next general enrollment period, which begins January 1 of the next year.

Even if you continue to work after you turn 65, you should at least sign up for Part A of Medicare. Part A may help pay some of the costs not covered by the employer plan. It may not, however, be advisable to sign up for Part B at the same time. You would have to pay the monthly Part B premium and the Part B benefits would be of limited value to you as long as the employer plan was the primary payer of your medical bills. Moreover, you would trigger your six-month Medigap open enrollment period.

References

Health Care Finance Administration. April 1996. Medicare Handbook. Washington, DC (Pamphlet).

University of Texas Medical Branch. (Undated) Internet http://www.utmb.edu/aging/