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About Medicare

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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About Medicaid

What is Medicaid?
Medicaid is a health insurance program for people with low income. It was created in 1965 as a joint federal-state program to provide medical assistance to aged, disabled, or blind individuals (or to needy, dependent children) who could not otherwise afford the necessary medical care.

Who administers Medicaid?
Each state administers its own Medicaid programs based on broad federal guidelines and regulations. Within these guidelines, each state (1) determines its own eligibility requirements, (2) prescribes the amount, duration, and types of services, (3) chooses the rate of reimbursement for services, and (4) oversees its own program.

How do you qualify for Medicaid?
Approximately 39 million people receive Medicaid benefits. To qualify for Medicaid, you must meet two basic eligibility requirements. First, you must be considered categorically needy because you are blind, disabled, or elderly. Second, you must be financially needy. This means that your income and your assets must fall under a certain limit set by the state in which you live.

How do you apply for Medicaid?
You can apply for Medicaid at your state welfare office, public health department or state social service agency.

What types of benefits are available?
Medicaid pays for a number of medical costs, including hospital bills, physician services, home health care, and long-term nursing home care. States may elect to provide other services for which federal matching funds are available. Some of the most frequently covered optional services are clinic services, medical transportation, services for the mentally retarded in intermediate care facilities, prescribed drugs, optometrist services and eyeglasses, occupational therapy, prosthetic devices, and speech therapy. Check with your state's Medicaid representative to see what coverage your state offers.

Medicaid and long-term nursing home care
Over 60 percent of all nursing home residents receive Medicaid benefits that help pay for their care. An aging population and the increased cost of long-term care have made Medicaid planning an important topic. If you're interested in Medicaid planning, here are some things you should know.

In years past, attorneys and financial planners devised strategies for the middle class and people of means to qualify for Medicaid by transferring funds to family members and by establishing trusts. Consequently, Congress tightened the Medicaid rules regarding the transfer of assets.

The Omnibus Reconciliation Act of 1993 makes qualifying for Medicaid more difficult for those people who transfer their assets away without receiving fair value in return. If you transfer assets away for less than fair consideration within 36 months of your application for Medicaid, the law creates a waiting period before you can collect Medicaid benefits. Transfers into certain trusts within 60 months of your Medicaid application also will also cause a period of ineligibility.

However, it's still possible to plan for long-term care and comply with the various Medicaid rules. Trusts, transfers of the family home, purchase of exempt assets, outright transfers under the "half-a-loaf strategy," and the purchase of long-term care insurance, among others, can be effective planning tools and strategies for this purpose. For details, see your financial adviser or an attorney experienced with Medicaid planning.

About Medigap Insurance

Because Medicare won't cover all your health-care costs during retirement, you may want to consider purchasing a supplemental medical insurance policy called Medigap. Medigap is specifically designed to fill some of the gaps in your Medicare coverage.

When's the best time to buy a Medigap policy?
The best time to buy a Medigap policy is during your open enrollment period, since you can't be turned down or charged more because you are in poor health. If you are age 65 or older, your open enrollment period starts when you first enroll in Medicare Part B. Or, if you are not yet 65, your open enrollment period starts when you turn 65, and then lasts for six months. A few states also require that a limited open enrollment period be offered to Medicare beneficiaries under age 65.

If you don't buy a Medigap policy during your open enrollment period, you may not be able to buy the policy you want later.

Note: If you are currently age 62 or younger, you should be aware that your eligibility for Medicare may be affected by the increase in the normal retirement age for Social Security. Starting in 2000, the age for collecting full Social Security benefits will gradually increase from age 65 to age 67 over a 22-year period. This means that the age at which you can begin receiving Medicare benefits may be greater than 65 (if current law still applies) because the date you become eligible for Medicare is the date you reach normal retirement age. However, neither the Social Security Administration nor the Health Care Financing Administration has yet published information on how the change in normal retirement age will affect Medicare eligibility.

What does a Medigap policy cover?
Under federal law, only ten standardized plans can be offered as Medigap plans. All ten must cover certain services, no matter in which state you live. Medigap policies pay most, if not all, Medicare coinsurance amounts. Some also provide coverage for deductibles and services that are not covered by Medicare such as prescription drugs and preventive care.

Each Medigap policy is labeled with the letter "A" through "J". You can buy the Medigap plan that best suits your needs. Plan "A" is the basic benefit plan, while Plan "J" offers the most coverage. However, it is important to note that not all ten plans are available in every state.

What is Medicare SELECT?
Medicare SELECT is another Medicare supplemental health insurance product. It's almost identical to standard Medigap insurance. When you buy a Medicare SELECT policy, you are buying a standard Medigap plan. The only difference between a Medicare SELECT plan and a Medigap plan is that Medicare SELECT is a managed care plan. In order to be eligible for full benefits, you must use specific hospitals, and sometimes specific doctors. That's why Medicare SELECT premiums are usually lower than premiums for Medigap policies that do not require the use of managed care.

bus Reconciliation Act of 1993 makes qualifying for Medicaid more difficult for those people who transfer their assets away without receiving fair value in return. If you transfer assets away for less than fair consideration within 36 months of your application for Medicaid, the law creates a waiting period before you can collect Medicaid benefits. Transfers into certain trusts within 60 months of your Medicaid application also will also cause a period of ineligibility.

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Please Note: The information contained in this Web site is provided solely as a source of general information and resource. It is a not a statement of contract and coverage may not apply in all areas or circumstances. For a complete description of coverages, always read the insurance policy, including all endorsements Medicare Rx

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