Important Note: The information provided herein is for general informational purposes and does not constitute legal advice or counsel. The information provided herein is not comprehensive and is also subject to change.

 

Table of Contents

 

Who is Eligible for Medicare?
Enrolling in Medicare
Part A – Hospital Insurance
Part B – Medical Services
Part C – Managed Medicare (Medicare Advantage Plans)
Part D – Prescription Drug Coverage
Does Medicare Cover Home Care?
What is not covered by Medicare?
Making Changes to Your Medicare – Open Enrollment

 

Who is Eligible for Medicare?

Medicare is the federal government’s health insurance for retired adults. All people age 65 or older are eligible to receive Medicare. People who are under 65 but have been receiving Social Security or Railroad Retirement Board disability benefits for 24 months are eligible for Medicare as well.

The Medicare.gov website has a tool to help you determine if you are eligible for Medicare.

 

Enrolling in Medicare

People who collect Social Security or Railroad Retirement Board benefits will usually get Medicare Part A and Part B automatically. At that time, they are given the opportunity to enroll in a Medicare Advantage (Part C) and/or Part D plan. If someone is 65 and is not yet getting Social Security or Railroad Retirement Benefits, he will need to contact Social Security or the Railroad Retirement Board to sign up.

People who delay signing up for Part B when they are first eligible may have to pay a higher premium as a late enrollment penalty; especially if they were not covered under a group employer plan at the time of their initial eligibility. For those that qualify, the late enrollment penalty can be avoided by applying for the Medicare Savings Program.

 

Medicare Part A – Hospital Insurance

Medicare Part A is hospital insurance. It helps to cover the costs of inpatient hospital care, skilled nursing facility, hospice, and home health care. Most people do not pay a Part A Premium because they or their spouse paid Medicare taxes while working. If you are not eligible to receive Part A free of charge, you may be able to buy it.

Gaps in Parts A

Medicare doesn’t cover everything. Some notable gaps in Part A that are not covered by Medicare include:

Inpatient Hospital Stay

$1,408 deductible for each benefit period.
Days 1–60: Covered in full.
Days 61–90: $352 coinsurance per day of each benefit period.
Days 91 and beyond: $704 coinsurance per each “lifetime reserve day” after day 90 for each benefit period (up to 60 days over your lifetime).
Beyond lifetime reserve days: all costs. source

Skilled Nursing Facility Stay

Days 1–20: Covered in full.
Days 21–100: $176 coinsurance per day of each benefit period.
Days 101 and beyond: all costs. source

Medigap Policies

Many people purchase supplemental policies that help to cover the gaps in Medicare coverage. These policies are often referred to as Medigap policies. Medigap policies vary in what they will cover in how much coverage they provide. Be sure to carefully review what a policy provides before purchasing one. Medicare.gov provides a tool to help consumers find a Medigap plan in their area.

Enrollment in Part A

People who collect Social Security or Railroad Retirement Board benefits will usually get Medicare Part A and Part B automatically. If someone is 65 and is not yet getting Social Security or Railroad Retirement Benefits, he will need to contact Social Security or the Railroad Retirement Board to sign up.

 

Medicare Part B – Medical Services

Medicare Part B covers Medical Services such as doctor visits, outpatient hospital care, and lab tests. The standard Medicare Part B premium is $144.60/month (it may be higher depending on a person’s income). Some people are eligible to have their Part B premium paid for by Medicaid through the Medicare Savings Program.

Gaps in Part B

Medicare doesn’t cover everything. Some notable gaps in Part B that are not covered by Medicare include:

  • Annual deductible: $198
  • Patient is responsible for 20% of the Medicare-approved amount for most doctor services (both outpatient and inpatient), outpatient therapy, and durable medical equipment. source
Medigap Policies

Many people purchase supplemental policies that help to cover the gaps in Medicare coverage. These policies are often referred to as Medigap policies. Medigap policies vary in what they will cover in how much coverage they provide. Be sure to carefully review what a policy provides before purchasing one. Medicare.gov provides a tool to help consumers find a Medigap plan in their area.

Enrollment in Part B

People who collect Social Security or Railroad Retirement Board benefits will usually get Medicare Part A and Part B automatically. If someone is 65 and is not yet getting Social Security or Railroad Retirement Benefits, he will need to contact Social Security or the Railroad Retirement Board to sign up. People who delay signing up for Part B when they are first eligible may have to pay a higher premium as a late enrollment penalty; especially if they were not covered under a group employer plan at the time of their initial eligibility. For those that qualify, the late enrollment penalty can be avoided by applying for the Medicare Savings Program.

 

Medicare Part C – Managed Medicare

Medicare Part C plans, also known as Medicare Advantage plans or “Managed Medicares”, function much like traditional HMOs or PPOs. When someone joins one of these plans, Medicare pays a fixed amount each month to a private third-party company that provides the plan, and that company is in turn responsible for providing the enrollee’s care.

Part C plans must follow rules set forth by Medicare; however, each plan may have different out-of-pocket costs such as yearly deductibles and co-pays, as well as different rules regarding accessing services. Limitations on services may include requiring a referral to see a specialist as well as in-network and preferred doctors, facilities, or suppliers for non-emergency or non-urgent care. Most plans include Medicare prescription drug coverage (Part D). Some plans charge a monthly premium in addition to the standard Part B premium.

Some Medicare Advantage plans offer perks such as free gym membership as a way to attract new members. When choosing a plan, be careful not to choose a plan for these perks at the expense of more critical healthcare coverage. Make sure that your doctors are in the plan’s network and try to find out what other people’s experiences have been with the plan.

Many Part C plans include Part D – prescription drug coverage.

Having Original Medicare Parts A and B with a Medigap (supplemental) policy will often provide more options than a Medicare Part C plan when it comes to seeing doctors and receiving other services. This is primarily because those enrolled in Original Medicare are not restricted to a third-party provider network. Their health insurance is simply Medicare (which is provided by the Federal government). They can go to any doctor or hospital, or receive any service, test, or durable medical equipment, as long the provider accepts Medicare.

Enrollment for Part C

When initially enrolling in Medicare you are given the opportunity to enroll in a Medicare Advantage (Part C) and/or Part D plan. Subsequently, every year you have the opportunity to make changes in your Medicare between October 15 and December 7. This period is called “Open Enrollment”. Additionally, between January 1 and February 14 you can disenroll from a Medicare Advantage plan and switch to Original Medicare. If you choose to do this, you have until February 14 to enroll in a Part D (prescription drug) plan.

 

Medicare Part D – Prescription Drug Coverage

Medicare Part D provides prescription drug coverage. Part D is offered through private third-party companies. While the Centers for Medicare and Medicaid Services (CMS) regulate these plans, each plan has its own list of covered drugs and participating pharmacies. There is a tool on the Medicare.gov website where you can enter your prescription drugs and the website will provide you with a list of plans that will provide you with the best coverage.

Those who join a Part D plan will have to pay a monthly premium as well as any deductibles, co-payments, or co-insurance that their plan requires. People with low income may be eligible for help covering these costs (see below). Part D is a voluntary benefit, although there may be a penalty for late enrollment.

Part D Coverage Gap – The Donut Hole

Most Part D plans have a very significant coverage gap in which a drug plan’s ordinary coverage does not apply. Rather, the consumer is responsible for a significant portion of the costs. This gap in coverage is commonly referred to as the donut hole. The coverage gap begins once a consumer incurs drug costs of $4,020, and continues until he/she has spent $6,350 in total out-of-pocket costs (this includes any deductibles, co-payments, or coinsurance paid while reaching the coverage gap). Once a consumer reaches $6,350 in total out-of-pocket costs, they enter “catastrophic coverage”. During this period, they pay significantly lower copays or coinsurance for covered drugs for the remainder of the year. 

People in the coverage gap pay 25% of the cost of their drugs. Although the consumer only pays 25% of the cost of “brand-name” drugs, almost the entire price of “brand-name” drugs – including the manufacturers discout –  counts as out-of-pocket spending towards getting out of the coverage gap.

EPIC and Extra Help – Assistance for Low Income Enrollees

Low income New Yorkers may be eligible to receive prescription drug coverage from the Elderly Pharmaceutical Insurance Coverage program (EPIC) through New York State or “Extra Help” for Medicare Part D from the Social Security Administration. These programs help provide coverage in the gap left by ordinary Part D plans and can also reduce or eliminate deductibles and co-pays. People with full Extra Help will not pay a monthly premium for their Part D as long as they choose a plan that meets certain requirements that Medicare calls a “benchmark” plan.

Enrollment for Part D

When initially enrolling in Medicare you are given the opportunity to enroll in a Medicare Advantage (Part C) and/or Part D plan. Subsequently, every year you have the opportunity to make changes in your Medicare between October 15 and December 7. This period is called “Open Enrollment”. Additionally, between January 1 and February 14 you can disenroll from a Medicare Advantage plan and switch to Original Medicare. If you choose to do this, you have until February 14 to enroll in a Part D (prescription drug) plan.

 

Does Medicare Cover Home Care?

Traditional Medicare Parts A and B do not cover home care that is considered exclusively “custodial” or “personal” care. This refers to care that is not being provided to address a medical need, but rather to assist with activities of daily living (ADLs) such as ambulating, dressing, bathing, eating, and toileting. Long-term home care generally falls under this category. Some Medicare Advantage plans may offer some coverage for home care that is considered “custodial” or “personal” care.

Traditional Medicare will provide some coverage for home care provided to address a “medical” or “skilled need”. During this period where the patient requires “skilled care”, Medicare will often provide coverage for some “custodial” or “personal” home care in a supporting role. 

Medicare home care services tend to be limited both in terms of the amount of services provided and their duration. However, they can be helpful for someone who needs help adjusting at home after a hospitalization or stay in a rehab. Additionally, they can help bridge the waiting period for someone who needs long-term home care and is working on a Medicaid application, as well as provide some financial relief for patients that are paying privately for home care.

 

What is not covered by Medicare?

Aside from relevant deductibles, coinsurance, and copayments, there are certain services that are not covered by Medicare at all. The following is a list of some common services that are not covered by Medicare Parts A & B (some Medicare Advantage plans may offer some of these benefits):

  • Long-term care – often referred to as custodial or personal care. This refers to care that is not being provided to address a medical need, but rather to assist with activities of daily living (ADLs) such as ambulating, dressing, bathing, eating, and toileting. Examples of this type of care include long-term nursing home care, assisted living facilities, and long-term home care. It should be noted that Medicare will provide some coverage for “medical care” provided in a skilled nursing facility, as well as for home care provided to address a “medical need”. During this period where the patient requires “medical care”, Medicare will often provide coverage for some custodial care in a supporting role.
  • Most dental care (including dentures)
  • Eye examinations for the purpose of prescribing glasses
  • Hearing aids
  • Acupuncture

Source

The Medicare.gov website has a tool to help you determine if your test, item, or service is covered.

 

Making Changes to Your Medicare – Open Enrollment

Every year you have the opportunity to make changes in your Medicare between October 15 and December 7. This period is called “Open Enrollment”. Additionally, between January 1 and February 14 you can disenroll from a Medicare Advantage plan and switch to Original Medicare. If you choose to do this, you have until February 14 to enroll in a Part D (prescription drug) plan.