Medicare: How Does It Work?
Medicare is a federal health insurance program. It is for three groups of people:
- People 65 years of age and over
- Some disabled people under the age of 65 years
- People with end-stage renal disease (folks with permanent kidney failure who are using dialysis or have had a kidney transplant)
Everyone receiving Social Security at age 65 automatically gets a Medicare card. If your parents aren't getting Social Security at that age, then they need to apply for it through their Social Security office. There are specific enrollment periods—so don't wait. Dad can apply three months before he turns 65 years old and up to four months after. If he misses the window, Dad could be in for some real hassles and a penalty.
- Part A. This part is not optional. (Nor would you want it to be.) Part A is the hospital coverage part of Medicare. Most of your parents' hospital bills are covered by Medicare. The Social Security office makes it easy for your parents. They deduct the hospital insurance monthly premium from Mom and Dad's Social Security check and zap it over to the Medicare Trust Fund. Just like any other insurance program, your parents have to kick in for deductibles. As of 2000, they'll pay $776 for a hospital stay of 1 to 60 days. Medicare covers semiprivate rooms, meals, general nursing, and other hospital services. Just about the entire hospital bill is covered by Medicare. Part A will also pay for home health care under certain conditions, durable medical equipment (wheelchairs, hospital beds, oxygen, and walkers), hospice care, and blood transfusions.
- Part B. This is the second part of Medicare known as the medical insurance part. This covers doctors' services, clinical laboratory services, outpatient medical and surgical services, supplies, and outpatient hospital services. Under approved conditions, your parents can also receive home health care services. Mom and Dad pay a deductible of $100 and then 20 percent of the bill.
To locate your local Social Security office, call 1-800-772-1213 or check out their top-notch Web site at www.ssa.gov.
Hello? Twenty percent of the bill? Yep. Those 20 percents can really add up. It's what everybody refers to as “the gap” (not the store where your kids shop). Just about everybody buys insurance to close the gap and cover the 20 percent that Medicare doesn't. It's known as Medi-gap insurance (more about that in a moment).
Social Security will also automatically deduct Mom's monthly medical insurance premium (Part B) from her Social Security check. She can refuse Part B, but she has to let Social Security know about this. The only reason she should refuse it is if she's under some other plan that covers her medical insurance. She might be getting it from a retiree package, so she doesn't need to pay for the premium. You absolutely do not want to be without this coverage! Many surgeries are being done at outpatient surgi-centers (for example, cataract surgery)—can you imagine paying for this out of pocket?
Just like Part A, there are certain periods of time when you can enroll in Part B. The general enrollment period is from January 1 through March 31 of every year. Coverage won't start until July.
As you deal with the world of Medicare, there are two different groups you will probably encounter. Here's who they are and what they do:
- Peer Review Organizations (PRO). The federal government pays a group of doctors and other health care experts to monitor and improve care given to Medicare patients. This group will review your parent's complaints about such things as care they've received at a hospital, a hospital's outpatient clinic, nursing home, surgi-center, or home health agency. The PRO will even handle complaints from Medicare managed care plans. Whenever your parents go into the hospital, they'll receive a pamphlet telling them how to make a complaint and the phone number of the PRO to call.
- Fiscal Intermediary. Companies are hired by the federal government to pay all Medicare Part A and Part B bills. The feds contract with different companies throughout the country to pay the bills. Sometimes you'll need to call one of these companies to correct a bill or let that company know that something's wrong. The company's phone number appears on the “Explanation of Benefits” or a “Medicare Summary Notice” your parents get after they receive a service from a health care provider that billed Medicare.
More on: Aging Parents
Excerpted from The Complete Idiot's Guide to Caring for Aging Parents © 2001 by Linda Colvin Rhodes, Ed.D. All rights reserved including the right of reproduction in whole or in part in any form. Used by arrangement with Alpha Books, a member of Penguin Group (USA) Inc.
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