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Medicare is a federal program that provides health insurance
to retired individuals, regardless of their medical condition. Below are some
basic facts about Medicare you should know.
What does Medicare cover?
Medicare coverage consists of two parts--Medicare Part A (hospital insurance)
and Medicare Part B (medical insurance). A third part, Medicare Part C (Medicare+Choice)
is a program that allows you to choose from several types of health-care plans.
Medicare Part A (hospital insurance)
Generally known as hospital insurance, Part A covers services associated with
inpatient hospital care (i.e., the costs associated with an overnight stay in a
hospital, skilled nursing facility, or psychiatric hospital, such as charges for
the hospital room, meals, and nursing services). Part A also covers hospice care
and home health care.
Medicare Part B (medical insurance)
Generally known as medical insurance, Part B covers other medical care.
Physician care--whether it was received while you were an inpatient at a
hospital, at a doctor's office, or as an outpatient at a hospital or other
health-care facility--is covered under Part B. Also covered are laboratory
tests, physical therapy or rehabilitation services, and ambulance service.
Medicare Part C (Medicare+Choice)
The 1997 Balanced Budget Act expanded the kinds of private health-care plans
that may offer Medicare benefits to include managed care plans, medical savings
accounts, and private fee-for-service plans. The new Medicare Part C programs
are in addition to the fee-for-service options available under Medicare Parts A
and B.
Are you eligible for Medicare?
Most people become eligible for Medicare upon reaching age 65 and becoming
eligible for Social Security retirement benefits. In addition, you may be
eligible if you are disabled or have end-stage renal disease.
Who administers the Medicare program?
The Health Care Financing Administration (HCFA), a division of the U.S.
Department of Health and Human Services, has overall responsibility for
administering the Medicare program. Although the Social Security Administration
processes Medicare applications and claims, the HCFA sets standards and
policies.
However, as a beneficiary, you deal mostly with the private
insurance companies that actually handle the claims on the local level for
individuals receiving Medicare coverage. Insurance companies handling Medicare
Part A claims are called Medicare intermediaries, and insurance companies
handling Part B claims are called Medicare carriers. Managed care plans handle
Part C claims. Although the same private insurance company may handle both Part
A and Part B claims, Part A and Part B are very different in regard to
administration (e.g., different deductibles and co-payment requirements). There
is virtually no overlap; it is as if you have two separate health insurance
policies.
How do you sign up for Medicare?
Any individual who is receiving Social Security benefits will automatically be
enrolled in Medicare at age 65 when he or she becomes eligible. If you are not
receiving Social Security benefits prior to age 65, you will be automatically
enrolled when you apply for benefits at age 65. However, if you decide to delay
retirement until after age 65, remember to enroll in Medicare at age 65 anyway,
because your enrollment won't be automatic. Individuals who will be
automatically enrolled in Medicare will receive notification by mail from the
Social Security Administration, usually three months before their 65th birthday.
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