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Medicare

Medicare is a government sponsored health insurance program for:

  • people age 65 or older,
  • people under age 65 with certain disabilities, and
  • people of all ages with End-Stage Renal Disease (permanent kidney failure requiring dialysis or a kidney transplant).

Medicare has:

Part A Hospital Insurance - Most people don't pay a premium for Part A because they or a spouse already paid for it through their payroll taxes while working. Medicare Part A (Hospital Insurance) helps cover inpatient care in hospitals, including critical access hospitals, and skilled nursing facilities (not custodial or long-term care). It also helps cover hospice care and some home health care. Beneficiaries must meet certain conditions to get these benefits.

Part B Medical Insurance - Most people pay a monthly premium for Part B. Medicare Part B (Medical Insurance) helps cover doctors' services and outpatient care. It also covers some other medical services that Part A doesn't cover, such as some of the services of physical and occupational therapists, and some home health care. Part B helps pay for these covered services and supplies when they are medically necessary.

Prescription Drug Coverage - Most people will pay a monthly premium for this coverage. Starting January 1, 2006, new Medicare prescription drug coverage will be available to everyone with Medicare. Everyone with Medicare can get this coverage that may help lower prescription drug costs and help protect against higher costs in the future. Medicare Prescription Drug Coverage is insurance. Private companies provide the coverage. Beneficiaries choose the drug plan and pay a monthly premium. Like other insurance, if a beneficiary decides not to enroll in a drug plan when they are first eligible, they may pay a penalty if they choose to join later.

Premiums

Most Medicare enrollees do not pay a monthly Part A premium, because they (or a spouse) have had 40 or more quarters in which they paid Federal Insurance Contributions Act taxes. Medicare-eligible persons who do not have 40 or more quarters of Medicare-covered employment may purchase Part A for a monthly premium of:

* $226.00 per month (2007) for those with 30-39 quarters of Medicare-covered employment, or
* $410.00 per month (in 2007) for those with less than 30 quarters of Medicare-covered employment and who are not otherwise eligible for premium-free Part A coverage.

All Medicare Part B enrollees pay an insurance premium for this coverage; the standard Part B premium for 2007 is $93.50 per month. A new income-based premium schema has been in effect for 2007, wherein Part B premiums are higher for beneficiaries with incomes exceeding $80,000 for individuals or $160,000 for married couples. Depending on the extent to which beneficiary earnings exceed the base income, these higher Part B premiums are $105.80, $124.40, $142.90, or $161.40 for 2007, with the highest premium paid by individuals earning more than $200,000, or married couples earning more than $400,000.

Medicare Part B premiums are commonly deducted automatically from beneficiaries' monthly Social Security checks.

Part C and D plans may or may not charge premiums, at the programs' discretion. Part C plans may also choose to rebate a portion of the Part B premium to the member.

Deductible and Coinsurance

Part A — For each benefit period, a beneficiary will pay:

* A Part A deductible of $992 (in 2007) for a hospital stay of 1-60 days.
* A $248 per day co-pay (in 2007) for days 61-90 of a hospital stay.
* A $496 per day co-pay (in 2007) for days 91-150 of a hospital stay, as part of their limited Lifetime Reserve Days.
* All costs for each day beyond 150 days

* Coinsurance for a Skilled Nursing Facility is $124.00 per day (in 2007) for days 21 through 100 for each benefit period.

* A blood deductible of the first 3 pints of blood needed in a calendar year, unless replaced.

Part B — After a beneficiary meets the yearly deductible of $131.00 (in 2007), they will be required to pay a co-insurance of 20% of the Medicare-approved amount for all services covered by Part B. They are also required to pay an excess charge of 15% for services rendered by non-particpiating Medicare providers.

The deductibles and coinsurance charges for Part C and D plans vary from plan to plan.

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