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Understanding Government Sponsored Health Insurance Center for Medicare and Medicaid Services: Medicare
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What is Medicare?
Medicare is a health coverage program that is run by the federal government for people over the age of 65 and, 
in some cases, people under the age of 65. There are several parts of Medicare, described in more detail below.
- Part A covers hospital and inpatient care.
- Part B covers doctor visits and other outpatient care. Under Parts A and B, you can get care from just about any hospital or doctor you choose.
- Part C of the program gives you an option to sign up for private managed care plans that cover all Medicare services and sometimes extra benefits, but these plans limit the providers you can see.
- Part D is a separate program that just covers prescription drugs, also through private health insurance plans.
There are also significant gaps in Medicare coverage. For this reason, many people buy private supplemental insurance policies (also called Medigap policies). You can buy private Medigap insurance policies to cover some or all of the cost sharing for benefits under Parts A and B (but not Part D). In addition, state Medicaid programs can help low income enrollees pay Medicare premiums and fill in coverage gaps. In addition to Medicaid, other state programs and a special federal Extra Health program have been specially designed to help with Part D premiums and drug costs.
If Medicare denies a claim for care you think can be covered, you can appeal.
All of this is described in more detail below with links to other sources for help and information. In particular, every state has a Senior Health Insurance assistance Program, or SHIP, that can help you with questions and problems related to Medicare.
How do I qualify for Medicare?
Generally, you are eligible for Medicare if you are 65 years or older and a citizen or permanent resident of the United States. If you aren't yet 65, you might also qualify for coverage if you have a disability or if you have End-Stage Renal disease (permanent kidney failure requiring dialysis or transplant).
To find out if you are eligible for Medicare, call the Center for Medicare & Medicaid Services at 1-800-MEDICARE or visit the online Medicare Eligibility Tool.
What does Medicare cover?
Medicare has several different parts, each covering different benefits and services.
Medicare Part A: Hospital Expenses
Medicare Part A covers hospital expenses and other kinds of inpatient care. There is a deductible of $1,068 for hospital stays in 2009. If you have a long stay of more than 60 days, additional cost sharing applies. There is also a limit on the number of covered hospital days under Medicare Part A.
When you sign up for Medicare, you are automatically covered by Part A. The cost of Medicare Part A is covered by the taxes you paid when you were working, so most people do not pay a monthly premium for Part A.
More information about what is covered under Medicare Part A.
Medicare Part B: Physician and Outpatient Services
Medicare Part B covers outpatient care, such as doctor visits, home health care, durable medical equipment, outpatient hospital services, ambulance services, and lab tests. In 2009, there is an annual deductible of $135 for services covered under Part B. After that, Medicare pays 80% of the covered costs and you pay 20%. There is no limit on your out-of-pocket cost sharing under Medicare. For this reason, most people who can afford to do so, buy supplemental coverage.
Medicare Part B is optional, although almost everybody in Medicare enrolls. There is a monthly premium for Part B, which is $96.40 in 2009. If your income is more than $85,000 per year ($170,000 for couples), your Part B premium will be higher.
More Information about what is covered under Medicare Part B.
Sign up for Part B at the time you become eligible for Medicare. There is a financial penalty for people who do not sign up right away. To learn about this rule and any exceptions, call 1-800-MEDICARE or go to their Web site and click "General Enrollment Period."
- Private Supplemental Insurance for Parts A and B (Medigap)
When you have Parts A and B of Medicare, you can get care from just about any doctor or hospital, generally without prior authorization. However, on most covered services and benefits, you will face significant cost-sharing in the form of deductibles and co-insurance. Many people buy private, supplemental coverage, known as Medigap, to reduce their cost sharing obligations, although this is not always an option for those under the age of 65.
Medigap plans are standardized to make them easier to compare. There are 12 plan options (labeled A-L). For more information about what these plan options cover, what they cost, and which insurers sell them in your area, visit this section of the Medicare Web site.
Consider buying a Medigap policy when you first become eligible for Medicare or soon thereafter. Penalties can apply if you wait more than six months. Learn more about these penalties by visiting this section of the Medicare Web site and click on "Choosing a Medigap Policy: A Guide to Health Insurance for People with Medicare."
Your local SHIP program can also help you review Medigap policies in your area. Find a SHIP health insurance counselor near you.
Medicare Part D: Pharmacy Drug Coverage
Part D is Medicare's prescription drug program. It lets you to buy a prescription drug plan from private insurers. Part D is also voluntary, and you must pay a separate monthly premium for your drug plan. You can sign up for a Part D plan when you first become eligible for Medicare. Then each year, there will be an open season when you can change plans if you want. Read a general overview of Part D prescription drug coverage.
Enroll in a Medicare Part D plan at the time you become eligible for Medicare. There is significant financial penalty for people who do not. You can learn more about this general rule and its exceptions by calling 1-800-MEDICARE or visiting this section of the Medicare Web site. Click on "Medicare and You 2009."
There is a "standard" Medicare drug benefit. Private insurers are allowed to modify this coverage somewhat and many do. Even so, your cost sharing for prescription drugs under any Medicare Part D plan can be very high.
Your premium for Medicare Part D coverage and the cost sharing for your drugs will depend on the plan you pick. Dozens of plans are offered in most areas, so figuring out this program can be a challenge. Listed below are some key questions and answers to help you get started learning about Medicare Part D plans. In addition, there are links to other resources that can help you study and pick a Part D drug plan.
Source: My Medicare Matters, National Council on Aging
- How can Medicare Part D plans differ from the standard plan?
Part D drug plans can be designed somewhat differently from this standard plan. For example, some plans don't require an annual deductible. Some plans will pay some drug expenses (for example, for generic drugs) during the coverage gap. All plans must have a coverage gap, however, and all must have a catastrophic phase of coverage.
The Part D plan comparison tool on the Medicare Web site can help you find out more specific information about the plans in your area and how cost sharing works for your drugs under each plan. This tool also estimates what you would pay for premiums and cost sharing for your drugs for the coming year.
- Is there any way to avoid the drug coverage gap or get help with costs when I'm in it?
Yes. You won't be affected by the coverage gap if your drug costs are no more than $2,700 in 2009.
You might also qualify for help with costs in the coverage gap.
- If you qualify for retiree health benefits from your former employer, your retiree benefits might cover some or all of the costs of your drugs while you're in the Part D coverage gap.
- If you have low income, there is an Extra Help program that covers all costs in the coverage gap.
- Also, many states have state pharmacy assistance programs that can help pay your Part D premiums and cost sharing (see section on Pharmacy Assistance Programs).
- Some Part D plans offer some coverage for some drug expenses (usually just for generic drugs) when you are in the coverage gap.
- Finally, if you are in the coverage gap and you don't qualify for other help, it is ok for a family member, a friend, or a charity to help pay for your prescription drug cost sharing.
- What is Extra Help? If I have low income, what other programs might help with my Part D premiums and drug costs?
Extra Help is a financial assistance program run by the Social Security Administration. It can help you pay your Medicare Part D drug plan premiums and cost sharing. To qualify for the program, your income and savings must be below certain limits. Also, you must enroll in a Part D drug plan before you apply for Extra Help. To see if you are eligible for Extra Help, contact the Social Security Administration at 1-800-772-1213 or visit them online.
In addition, you may be eligible for help in reducing the cost of your medications through a prescription assistance program offered by your state. To see if your state has one of these programs, contact your local SHIP program or visit MAP-Rx (Medicare Access for Patients Rx).
- Medicare Part C: Medicare Advantage Plans
Medicare Part C is an option that lets you buy Medicare coverage from private health insurance companies, mostly managed care plans. By joining a "Medicare Advantage Plan" (MAP) you agree to allow a private insurer to manage all of your Medicare medical benefits and get care from their network of doctors and hospitals. Some Medicare Advantage plans have premiums and cost-sharing that are lower than what you would pay for traditional Medicare. In addition, some plans offer expanded benefits.
Some questions to ask before joining a Medicare Advantage Plan:
- Will all of your providers be covered under the under the MAP?
- Will all of your medical needs be covered under the MAP?
- Will all of your medications be covered under the MAP?
- How are you covered under the MAP if you become sick on an out-of-state vacation?
It is important to do your homework before joining a Medicare Advantage Plan. The Medicare Rights Center offers a comprehensive list of questions you should ask before joining a Medicare Advantage Plan. You can also find more information about Medicare Advantage Plans Advantage plans.
In addition, to find and compare your Medicare health plan options, visit the Medicare Options Compare Database. Your state SHIP program counselor can also help you compare Medicare Advantage Plans and figure out if this option is right for you.
How does the Medicaid program help people on Medicare?
Medicaid is another government program that provides health insurance coverage for certain people with very low income. It works somewhat differently in each state.
In most states, to qualify for Medicaid, an elderly or disabled person on Medicare must have extremely low income, usually below the federal poverty level.
If you are eligible for Medicaid and Medicare, you are considered a "dual eligible" person. Depending on your state, the two programs together should cover virtually all of your health care needs with little or no cost sharing.
If your income is low, but not low enough to qualify for Medicaid, there are other ways Medicaid can help.
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If your household income is below the poverty level, Medicaid will pay your Medicare monthly premium and your Medicare deductibles and coinsurance. This is called the Qualified Medicare Beneficiary (QMB) program.
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If your household income is above 100% but below 120% of the poverty level, Medicaid will pay for your monthly Medicare premiums only. This is called the Specified Low-Income Medicare Beneficiary (SLMB) program.
To learn more about Medicaid help for "dual eligible" persons and the QMB and SLMB program, read this fact sheet.
Also, see the section on Medicaid for more information about Medicaid in your state.
Another interactive and consumer-friendly source of information about these programs is available from a nonprofit organization, the Medicare Rights Center.
In addition, a Web site run by the nonprofit National Council on Aging can help you figure out if you may be eligible for Medicaid and other assistance. The SHIP program in your state has counselors who can help you sign up for assistance from Medicaid. To find a SHIP counselor in your state, visit their Web site.
What happens if Medicare denies coverage for something that you need?
If Medicare denies coverage for something that you need and that is otherwise covered by Medicare, you may have to appeal the decision. Very often, denials are overturned on appeal. Consider the following steps:
- Step 1: Resubmit the original claim
Make sure that your provider filled out the Medicare paperwork correctly. If not, ask your provider to correct the paperwork and re-submit the claim. If the paper work was filled out correctly the first time or you receive a second denial, consider appealing the decision.
- Step 2: Appeal the original denial within 120 days
The Medicare Summary Notice stating the original denial will have specific instructions on how to appeal a decision. Make sure to follow these instructions carefully. Your initial appeal must be mailed within 120 days of receiving the denial. If your first appeal is denied, consider further appeals.
- Step 3: Appeal again
After the original appeal, there are four more levels of appeals for Medicare Part A and B. There are specific instructions to follow and deadlines to meet for each level of appeal. It is important to follow the instructions and meet all deadlines.
There are separate procedures for appealing denials under Medicare Part D and for those covered under a Part C, Medicare Advantage Plan.
Learn more about Medicare appeals.
Know all your rights to appeal a Medicare denial. The Medicare Rights Center (MRC) offers one-on-one counseling to help you navigate the Medicare appeals process. Contact the Medicare Rights Center at 1-800-333-4114 or visit MRC online.
Where can I go for more help and information about Medicare?
- Your State Health Insurance Assistance Programs (SHIP) should be a starting point for you and your family to get answers from trained counselors to general questions about Medicare, local Medigap plans, Medicare Part D Plans and Medicare Advantage Plans. In addition, your SHIP may also be able to provide you with information about local programs such as Medicaid and the state prescription assistance program. For more information and contact information for the SHIP in your state, go to www.shiptalk.org.
- The Centers for Medicare and Medicaid Services (CMS) administers the Medicare program. CMS maintains the official U.S. Government Web site for Medicare. This is the most authoritative resource online with information on Medicare eligibility, benefits and programs. To contact CMS about Medicare, call 1-800-MEDICARE or visit the official Web site.
- The Medicare Rights Center (MRC) is a national, nonprofit consumer services organization that provides one-on-one counseling to people regarding their Medicare rights and options. MRC can also help you appeal denied claims. In addition MRC has a Medicare Interactive Counselor, available online. This electronic service provides answers to hundreds of questions a range of Medicare topics. Contact the Medicare Rights Center at 1-800-333-4114 or visit MRC online.
