Merritt Personal Lines Manual: Medicare Parts A and B

Medicare is made up of two parts: Part A is Hospital Insurance and Part B is Medical Expense Insurance.

Medicare Part A covers costs associated with inpatient care in a hospital and skilled nursing facility care after a hospital stay. It also covers home health care and hospice care. It pays for the cost of whole blood or units of packed cells, after the first three pints during a covered stay in a hospital or skilled nursing facility. In addition, it pays 80 percent of durable medical equipment -- such as wheelchairs and walkers -- when approved.

Just about every working person will receive Medicare at age 65. Under Part A, any person eligible for Social Security will automatically be eligible for hospital insurance at no charge. You will be automatically enrolled if you're receiving benefits before you reach 65 from either the Railroad Retirement Board or Social Security Administration.

Your Medicare card will be mailed to you approximately three months before your reach your 65th birthday and coverage begins on the first day of the month in which you turn 65.

Some Medicare reform efforts have suggested raising the Part A enrollment age to 67...or some other point. But these reforms remain more speculative than practical.

If you're disabled and receiving benefits from either organization for 24 months, your card will be automatically mailed as well.

However, if you're not receiving retirement benefits, you must apply directly to either the Social Security Administration or Railroad Retirement Board. Be sure to do so at least three months before you reach 65, to avoid any delays in coverage. You only have seven months to enroll, beginning three months prior to your 65th birthday; otherwise, you'll have to wait until January 1 though March 31 just to enroll. In that case, your benefits don't kick in until July 1.

So, be sure you know your dates.

You are also eligible for benefits if you are one of the following:

• a disabled person who has been receiving Social Security disability benefits for at least 24 months;
• a person who is diagnosed as having permanent kidney failure which requires dialysis or a kidney transplant;
• an individual born prior to 1909 who has no quarters of coverage under Social Security; or
• a retired railroad worker.

Furthermore, if you don't qualify for Medicare hospital insurance (you don't have the required work credits, etc.), you can buy coverage for a monthly premium. If you plan to take this route, you must also enroll in Part B Medicare, be a resident of the United States and either a citizen or a lawfully admitted alien.

Hospital insurance under Medicare Part A does not cover the following:

• private duty nursing;
• charges for a private room, unless medically necessary;
• conveniences, such as a telephone or television in your room;
• the first three pints of blood received during a calendar year (unless replaced by a blood plan).

Medicare Part B is Medical Expense insurance covering costs associated with doctors' services, outpatient care, laboratory tests, x-rays, mammograms and pap smears and medical supplies. You'll have to pay the first $100, which is the annual deductible, then Medicare will pay 80 percent of all approved charges for any eligible medical expense. The approved charge may or may not be close to the actual fee charged by your provider and you are responsible for the difference...as well as the additional 20 percent of the approved charge

Fortunately, when doctors accept a Medicare assignment, they agree to charge no more than Medicare's approved charge.

Here's what Part B covers:

• doctors services provided on an inpatient or outpatient basis, no matter where received in the United States and including surgical services, diagnostic tests and x-rays, medical supplies furnished in a doctor's office and services of the office nurse;
• services of clinical psychologists, chiropractors, podiatrists and optometrists;
• outpatient diagnostic services and medical lab fees, such as care in an emergency room or outpatient clinic of a hospital;
• outpatient physical and speech therapy;
• certified nurse-midwife services for pregnancies (of course, this benefit isn't used much by those over 65);
• dental work which is required due to accident or disease;
• the use of outpatient medical equipment such as iron lungs, braces, colostomy bags and prosthetic devices such as artificial heart valves;
• ambulance service, if the patient's condition requires it;
• outpatient psychiatric care (there is a 50 percent copayment instead of 20 percent);
• the cost of certain vaccines and antigens. (Only medicines which are administered at the hospital or at a doctor's office are covered by Medicare. Drugs which can be self-administered -- taken at home -- are not covered, even if prescribed by a doctor.);
• an unlimited number of home health care visits, if all required conditions are met and you do not have Medicare hospital (Part A) coverage;
• preventive health care expenses such as pap smears and mammography (however, mammograms are covered only when performed in a Medicare-approved facility);
• one pair of eyeglasses following cataract surgery.

Blood is a covered expense under Part B (also Part A). In essence, there is a "3-pint deductible" for blood. Which means that you are responsible for either paying for the first 3 pints of blood or replacing the blood. The blood deductible for Part B can be used to satisfy the blood deductible for Part A. Thus, only one 3-pint deductible is required. However, any blood provided under Part B is still subject to the 20 percent copayment.

Under Part B, there are a number of services that do not require a deductible or a copayment, including:

• the cost of a second opinion required by Medicare for surgery;
• home health services (except the 20 percent copayment applies to the use of certain medical equipment);
• pneumococcal vaccine (flu shots);
• outpatient clinical diagnostic lab tests conducted by Medicare-certified facilities or doctors who accept assignments.

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