Basics of Medicare
Center for Health Care Rights April 2014
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Center for Health Care Rights
(CHCR)
 A non-profit advocacy organization that
provides free information and help with
Medicare and health insurance issues.
 Our services are FREE for Los Angeles County
residents.
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 We are NOT part of Medicare or any insurance
company or HMO.
 We are primarily funded through the Health
Insurance Counseling and Advocacy Program
grants provided by the Los Angeles City
Department of Aging and the County Area
Agency on Aging.
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Medicare
 A federal health insurance program that was created to
provide a safety net for persons who are elderly (65 years
and older) or younger and disabled (under the age of 65)
adults.
 Eligibility for Medicare is not based upon income or
resources.
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Who is Eligible for Medicare?
Automatic Enrollees (Eligible for Free Part A)
 Age 65 and older entitled to Social Security
Retirement Benefits;
 Age 65 and older and the spouse or former spouse of
someone entitled to Social Security or Railroad
Retirement Benefits;
 Age 65 or older and eligible for Federal Civil Service
or Railroad Retirement benefits;
 Under the age of 65 and has been receiving Social
Security Disability for 24 consecutive months.
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Automatic Enrollees (Eligible for Free Part A)
 Have End-Stage Renal Disease (ESRD). Eligible for
Medicare only if they are insured for Social
Security or Railroad Retirement benefits.
 Have Amyotrophic Lateral Sclerosis (ALS) also
known as Lou Gehrig’s disease (individuals with
ALS do not have to wait 24 months for Medicare to
begin). Eligible for Medicare only if they are
insured for Social Security or Railroad Retirement
benefits.
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 Eligibility for Medicare based on age 65
 Persons who elect to receive retirement benefits before age 65
will receive their Medicare card three months before their 65th
birthday.
 Persons who apply for Social Security Retirement at age 65
will generally also apply for Medicare at the same time.
 Starting in 2003, the retirement age for
persons born in 1938 and after has been
increased. Some of these individuals may
become eligible for Medicare (at age 65)
before they are eligible for full Social Security
retirement.
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 Eligibility for Medicare based on disability
 Persons receiving Social Security disability will receive
Medicare after they have received Social Security benefits
for 24 consecutive months.
 They will receive their Medicare card three months before
the month they become eligible.
To apply for Medicare,
contact the Social Security Administration.
1-800-772-1213
www.socialsecurity.gov
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Medicare Premiums for 2014
Automatic
Enrollee
Voluntary
Enrollee
$426/month
if less than 30 work quarters
Part A
(Hospital)
No premium
$234/month
if 30-39 work quarters
Part B
(Medical)
$104.90/month
Center for Health Care Rights April 2014
$104.90/month
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Premium Penalties
Part A
(Hospital)
10% of premium for twice
the number of years late.
Part B
(Medical)
10% for every year late, in
effect for life.
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Medicare Part B and D premiums
based on Income
 Higher income Medicare beneficiaries with annual
incomes over $85,000 (single person) and over
$170,000 (married couple) pay an additional income
related monthly premium for Medicare Parts A and B
that is based on their income.
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Medicare
Enrollment Periods
 Initial Enrollment Period
Begins three months before the month of Medicare
eligibility and ends three months after (seven months
total).
 General Enrollment Period
January through March each year, benefits are effective
July 1st.
 Special Enrollment Period
Begins on the first day of the month the beneficiary is no
longer covered by an employer group health plan and ends
eight months later.
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Do I Have to Apply for Medicare
if I am Working and Have Employer
Insurance?
Medicare Eligible Persons – Age 65
 Persons who are turning 65, working (or whose
spouse is working) and are covered by an employer
health plan do not have to enroll in Medicare Part B.
 They can delay their Medicare enrollment until they
or their spouse retires and will not be charged a
penalty for late enrollment.
 This rule applies only if the employer has 20 or more
employees.
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Do I Have to Apply for Medicare
if I am Working and Have Employer
Insurance?
Medicare Eligible Persons – Under 65
 These individuals can delay their enrollment in
Medicare Part B with no penalty for late enrollment.
 This rule applies only if the employer has 100 or more
employees.
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How Does Medicare Work
with My Employer Insurance?
If a Medicare eligible person is covered by an
employer health plan and he/she enrolls in
Medicare, the employer plan will be primary and
Medicare secondary.
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Medicare Coverage
Part A
Hospital Insurance
Part B
Medical Insurance
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Medicare Part A Benefits
 Hospital
 Skilled Nursing Facility
 Home Health Care
 Hospice
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Coverage Per Benefit Period*
Hospital
Days 1 - 60
$1,216 first day
deductible
Days 61 - 90
$304/day
Days 91 – 150
$608/day
(Lifetime reserve days)
Skilled Nursing
Facility
Days 1 - 20
Covered in full.
Days 21 - 100
$152/day
*A “benefit period” begins the day a beneficiary is admitted to the hospital and
ends when the beneficiary has been out of the hospital or nursing facility for 60
consecutive days.
The 60 “lifetime reserve days” can be used only once.
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Part A
Skilled Nursing Facility Coverage
Requirements for coverage:
 Three day prior hospital stay;
 SNF stay must be ordered by physician;
 SNF must be Medicare certified; and
 You must need skilled care on a daily basis
(minimum five times a week).
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Medicare Home Health Benefits
If you meet the Medicare requirements,
Medicare will pay for the same type of service
received in a Skilled Nursing Facility at home:
 Nursing care
 Physical therapy
 Speech therapy
 Occupational therapy
 Medical social services
 Home health aide services
 Medical supplies and durable medical equipment
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Medicare Home Health Benefits
Medicare will pay only if all of the following
conditions are met:
1. Patient needs intermittent skilled nursing care,
physical therapy or speech therapy;
2. Patient is homebound;
3. Physician determines patient needs home health
and sets up a plan of care; and
4. Home health agency providing the services is a
Medicare provider.
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Medicare Part B Benefits
 Physician services
 Ambulance
 Outpatient speech, physical and
occupational therapy
 Medical equipment
 Mental health services
 Laboratory, x-rays, diagnostic tests
 Preventive services (e.g., flu shots)
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2014 Medicare Part B Costs
Service
Beneficiary Cost
$147 annual deductible
Most Part B Services
20% of Medicare-approved charges
15% excess charges
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Medicare Preventive Benefits
 Free annual mammograms for women age 40 and over;
 Screening pap smears and pelvic exams every two
years;
 Free colorectal cancer screening for persons age 50 or
older;
 Free flu and pneumococcal vaccines each year
 Diabetic screening, supplies and self management
services;
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Medicare Preventive Benefits
 Free annual prostate cancer screening for men over age
50;
 Annual glucose screening for persons at-risk for
glaucoma;
 Cardiovascular disease blood tests;
 A one time physical exam within the first
12 months of becoming eligible for Part B.
 After the first year of Medicare eligibility, Medicare
will also now pay for an annual wellness visit that will
include a comprehensive risk assessment.
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Medicare Part D Drug Plan Choices
 Prescription Drug Plan
(PDP)
 Medicare Advantage Plan
(MA-PD)
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Prescription Drug Plan (PDP)
 Obtain Medicare Part D
coverage by enrolling in
a PDP
 Continue to use original
Medicare to obtain Part
A and B services
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Medicare Advantage Plan (MA-PD)
 Obtain Medicare Part D
coverage by enrolling in a
MA-PD
 When you enroll into a
MA-PD plan, you must
receive all Medicare Parts
A, B and D services from
the plan
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 Types of Medicare Advantage Plans
 MA Health Maintenance Organizations (HMOs)
 MA Preferred Provider Organizations (PPOs)
 MA Special Needs Plans (SNPs)
 MA Private Fee For Service Plans (PFFSPs)
 MA HMOs, PPOs and SNPs are all managed care plans
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2014 Medicare Part D
Drug Coverage
 Monthly premiums for 2014 Prescription Drug and Medicare
Advantage plans range from $0 to $147 per month
 The 2014 national base premium is $32.42
 Higher-income Medicare beneficiaries pay higher Part D
premiums. Persons whose incomes are:
 $85,000/individual
 $170,000/couple
 In 2014, the Part D annual deductible is no more than $310. (The
deductible is the amount you pay before your drug plan starts to
pay anything.)
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2014 Medicare Part D Drug Coverage
 Initial Coverage Period
After you pay your deductible, you pay 25% of the total
retail cost of your prescription drugs until the total cost
reaches $2,850 for the year
 Coverage Gap
When your total drug costs reach $2,851, you pay 47.5% of
brand name prescription costs and 72% generic drug costs
until the total cost reaches $ 6,455
 This gap in coverage is called the “doughnut hole”
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 Catastrophic Coverage
Once your total drug costs are greater than $ 6,455, you
pay $2.55 to $6.35, or 5% of the cost for each
prescription drug
By 2020, you will pay only a 25% copayment
for prescriptions you fill when you are in
the doughnut hole.
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Medicare Part A and Part B
Appeals Process
Initial Determination
Claim determinations made by intermediaries (Part A claims)
and carriers (Part B claims).
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 Redeterminations made by the carriers and
intermediaries.
 Reconsiderations by Medicare Qualified Independent
Contractors (QICs).
 Administrative Law Judge Hearing
A beneficiary must have at least $130 at issue to appeal to
this level.
 Medicare Appeals Council (MAC)
 Federal District Court
A beneficiary must have at least $1,300 at issue to appeal
to this level.
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Fast Track Appeals
for Service Denials
Medicare beneficiaries have the right to request a fast
track appeal in certain situations when Medicare
services are denied.
Fast track appeals apply to:
 Hospital discharges; and
 Termination of skilled nursing facility and home health
services.
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Fast Track Appeals
for Hospital Discharges
Example: Client is being discharged from an acute care
hospital because the hospital does not believe that a
continued stay will be covered by Medicare.
• If the client disagrees with the hospital’s decision,
he/she has the right to receive a notice from the
hospital that provides information on why the stay is
no longer covered and his/her appeal rights.
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• The client has the right to fast track appeal and should
contact the Quality Improvement Organization
(QIO) as soon as possible. In California, the QIO is
Health Services Advisory Group and the number to
call is 1-800-841-1602.
• Persons in a Medicare Advantage HMO have the right
to a fast track review.
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For questions about Medicare or
other health insurance call the
Center for Health Care Rights
at
1-800-824-0780.
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