Health Insurance/ Medicare & Medicaid

• About Medicare
• About Medicaid

Medicare is the federal health insurance program for people age 65 and older. Younger individuals who have received Social Security disability benefits for two years, and people who have end-stage renal disease, also qualify for Medicare. Local Social Security offices are involved with Medicare enrollment. The federal agency that operates the Medicare Program is called the Centers for Medicare and Medicaid Services (CMS). Its website address is www.medicare.gov 

Original Medicare consists of Part A (hospital insurance) and Part B (medical insurance), which cover basic services, but not all costs. About 80% of people on Medicare have Original Medicare, which allows them to use almost any doctor that accepts Medicare. Original Medicare pays doctors and health care providers directly. 

The Medicare + Choice program pays private insurance companies to provide Medicare coverage. People with Original Medicare can (but don’t have to) sign up for a Medicare + Choice plan that is available in their area. Most of the Medicare + Choice plans are managed care plans. People with Original Medicare who live in an area where Medicare + Choice plans are available should weigh the advantages and disadvantages carefully before signing up for one of these plans. (More information about Medicare + Choice plans appears below.)

Most people don’t have to pay a premium for Medicare Part A, because they (or a spouse) paid Medicare taxes while they were working. Medicare Part A pays for in-patient hospital charges. People with Medicare have to pay a deductible ($792 during 2001) for each episode of inpatient hospital care, and a hefty daily co-insurance after a 60-day hospital stay. Under certain circumstances, Part A pays for skilled nursing care or therapy, either in a nursing home or at home. Part A also pays for Hospice Care for people who have a terminal illness. 

Medicare Part B is medical insurance that pays for doctors, outpatient hospital care, and home health visits not covered under Part A. Part B also covers lab tests (for example, x-rays and blood work); medical equipment (for example, wheelchairs and walkers); outpatient physical therapy; mental health care; and ambulance services. Most people pay a premium ($50.00 per month during 2001) for Part B coverage. The premium for Part B is usually deducted from the Social Security check. (People with low income and assets might qualify for a Medicare Savings Program that helps with the costs of Medicare. For information about Medicare Savings Programs, see “Help with Health Care Costs” at this website.)

What Original Medicare doesn’t cover: Medicare Parts A and B don’t cover all health care expenses. Some of the uncovered costs include out-patient prescription drugs; routine or yearly physical exams; dental care; eye exams; eyeglasses; hearing aids; care provided outside the United States; and long-term care at home or in a nursing home.

People who don’t receive information about their Medicare enrollment by the third month before the month in which they will turn 65 are advised to call 1-800-772-1213, or visit their local Social Security office, to enroll in Medicare. The seven month initial enrollment period for Medicare begins three months before the month you turn 65; includes your birthday month, and extends for three more months. 

Individuals who don’t sign up for Medicare Part B during the initial enrollment period risk having to pay a permanent 10% penalty for each year that they could have enrolled, but didn’t enroll in Part B. People who work beyond age 65 and have employer-sponsored or union-sponsored health coverage through their current employment (or retired individuals covered through their spouse’s current employment), can usually delay enrolling in Medicare Part B without incurring a penalty. This is true when the employer that sponsors the group health plan coverage has 20 or more employees. (People who have retiree coverage through former employ-ment are not exempt from the penalty for delaying enrollment in Part B.)

Most people with Original Medicare (Parts A and B) buy Medicare sup-plement insurance (nicknamed “medigap”) to help cover the gaps in Medi-care, such as the Part A and Part B deductibles and co-insurance amounts. The best time to buy a Medicare supplement policy is during the six month period that starts with the date your Medicare Part B coverage takes effect, and ends six months from that date. During this crucial open enrollment period for Medicare supplement insurance, people can’t be turned down or charged a higher premium because of health status or medical history. 

People who have employer-sponsored health insurance (from an employer with 20 or more employees) through their own current employment or their spouse’s current employment can consider delaying enrollment in Medicare Part B, to preserve their open enrollment period for Medicare supplement insurance. People who delay enrolling in Part B for this reason are not subject to the 10% penalty for late enrollment in Part B. (Again, people who have retiree coverage through former employment are not exempt from the penalty for delaying enrollment in Part B.)

Medicare + Choice Plans: In some parts of Virginia and other states, private companies contract with Medicare to offer new Medicare choices. People who choose one of the newer Medicare plans still pay the monthly Medicare Part B premium ($50 per month during 2001), and will receive all Medicare Part A and Part B covered services. Additional benefits, such as some level of coverage for prescription drugs, or for eyeglasses are included in some of the plan choices. People who participate in a Medicare + Choice plan don’t need to buy Medicare supplement insurance. 

Bear in mind, however, that each Medicare + Choice plan can raise premiums, cut benefits, or opt out of their contract with Medicare and stop providing coverage to people on Medicare. People whose Medicare + Choice plan doesn’t renew its contract with Medicare will be covered by Original Medicare, but their ability to buy a Medicare supplement policy with coverage for prescription drugs might be hampered because of their health status.

The new Medicare choices include Medicare HMOs (and other Medicare managed care plans: PSOs -- provider-sponsored organizations, and PPOs -- preferred provider organizations); and Medicare private fee-for-service plans offered through private insurance companies. Of these choices, Medicare HMOs have been around the longest; the others are relatively new. Medicare managed care plan members must use the plan’s doctors in order to be covered. With a Medicare HMO or PSO, the primary care doctor decides whether the patient should see a specialist, and to which specialist the patient will be referred.

You can find out more about Medicare + Choice plans by calling 1-800-633 4227. To find out whether any of these plans are available in your area, call your Area Agency on Aging, or visit the Medicare Compare web site, www.medicare.gov/mphcompare/home.asp 

Many people don’t realize that Medicare provides very limited coverage for long-term care. Medicare coverage for home care and nursing home costs is intended for a transitional period between hospitalization and recovery. Many people who need help with basic activities of daily living don’t meet the requirements for Medicare coverage, because they’re not recuperating after a hospital stay. The need for help with basic activities such as moving about, bathing, and dressing often comes from chronic conditions, like arthritis or emphysema. 

For skilled nursing care or therapy provided in a Medicare-certified skilled nursing facility (many, but not all, nursing homes meet this definition), Medicare pays the basic costs in full for 20 days, if the individual had a hospital stay of at least three days within 30 days of entering a Medicare-certified skilled nursing facility, and if the individual’s doctor says he or she needs skilled nursing care or therapy. After 20 days, Medicare partially pays for the 21st day through the 100th day, with the individual responsible for a substantial co-payment ($99 per day during 2001), if the doctor continues to document the need for skilled nursing care or therapy.

For Medicare to cover skilled nursing care or therapy at home, a prior hospital stay isn’t required, but the patient must be homebound. This is defined as being normally unable to leave home; leaving home must be a major effort. Absences from the home must be infrequent and of short duration.

When the doctor decides that a patient who is homebound needs home health services (usually skilled nursing care or therapy), Medicare will pay a Medicare-certified home health agency to provide intermittent (not full-time) care fewer than 7 days a week, for fewer than 8 hours a day (often a lot fewer than 8 hours a day) – for up to 21 days; longer in some situations. Physical therapy, speech language pathology services and occupational therapy can continue for as long as the doctor says they’re needed.

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About Medicaid

Medicaid is not a single program; it’s a collection of programs that have different requirements, and pay different benefits. Medicaid pays health care costs for people whose income is very low, and who don’t have a lot in savings or other valuable assets. People who qualify for both Medicare and Medicaid have coverage through both programs.

Medicaid is a joint federal and state program. In Virginia, Medicaid is administered by the Virginia Department of Medical Assistance Services. Eligibility for Medicaid is determined by local Departments of Social Services. An application for Medicaid can be obtained in person or through the mail from the local Department of Social Services.

The following Medicaid programs can help older adults who qualify:

• “Medicare Savings Programs” are really Medicaid programs that help with the costs of Medicare. For information about Medicare Savings Programs, see “Help with Health Care Costs” at this website.
  
• Medicaid’s “Medically Needy” Program might help pay unusually high medical expenses for some people who receive Social Security benefits (either retirement or disability). To qualify for Medically Needy Medicaid, a single individual must have less than $2,000 in financial resources. The combined financial resources of a couple must be less than $3,000. The following don’t count as resources: the home, one car, and ordinary household and personal belongings.
  
• Full coverage Medicaid includes hospital inpatient and outpatient services, doctor services, prescription drugs, lab and x-ray services.
  Full coverage Medicaid is available to people who are 65 or older, and younger disabled adults, whose income and financial resources are within the levels described below.
  
  Income:
  • A single individual can have income up to $593 per month.
    
  • Couples can have up to $794 per month.
    
  • SSI (Supplemental Security Income) payments don’t count as income.
    
  Assets or financial resources:
  
  • Single individuals must have less than $2,000 in financial resources.
    
  • For couples, the combined resources of husband and wife must be less than $3,000.
    
  • In addition to the resource limits of $2,000 for an individual and $3,000 for a couple, up to $3,500 can be set aside for burial purposes, through life insurance, burial arrnagements, or burial insurance.
    
  • The home, one car, and ordinary household and personal belongings don’t count as financial resources.
    
  • The amount of land around the home no longer counts as a resource. This is a recent change that will allow more older and disabled Virginians who own farm property to qualify for Medicaid.
    
  • Property owned jointly with another person can be exempt if sale of the property would cause undue hardship (loss of housing) to the co-owner.
    
• Medicaid for nursing home costs 

To qualify for Medicaid to pay nursing home costs, a single person (unmarried, widowed or divorced) must have less than $2,000 in financial resources (as described above), and the individual’s gross monthly income must be less than the monthly private rate for nursing home care. The value of the home, and one car, are not considered as financial resources unless the applicant has been in a nursing home for six months and is not expected to return home.

When one partner of a married couple needs Medicaid coverage for nursing home care, the at-home spouse can keep the home, a car, and half of the other assets owned jointly by the couple. There’s a maximum amount of assets that the at-home spouse can keep: it’s approximately $84,000.

The at-home spouse can keep his or her own monthly income. The at-home spouse’s income is compared to Medicaid’s income standard for this coverage, which is approximately $1,400 per month. If the at-home spouse’s income is below that level, he or she can keep a portion of the income of the spouse in the nursing home, to bring the total income level of the at-home spouse up to the standard.