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Medicare

The federal government’s role of providing the nation’s seniors with some degree of financial security was established by the Social Security Act of 1935. In its original form, Social Security was designed to provide retirement benefits for workers, to be drawn upon when he or she reached age 65. Subsequently added to the program were benefits for unemployment compensation, workers’ compensation due to injuries sustained on the job, and personal disability and survivor benefits for a deceased worker’s family. In 1965, the Medicare Act was signed into law. Its purpose was to provide affordable health care for older Americans and to prevent the impoverishment of senior citizens due to health care costs. This is when the Medicare program began.

So, what exactly is Medicare?

Medicare is a federal health insurance program for persons age 65 or older, persons of any age with permanent kidney failure, and certain disabled persons. The Medicare program covers people over age 65 – regardless of their income and assets – as well as certain disabled individuals under age 65. The Medicare program does not provide medical care directly. Instead, it either pays doctors and hospitals directly for their services or reimburses patients who have paid bills themselves.

At this time, Medicare is divided into four parts. These are:

  • Part A – Hospital Coverage
  • Part B – Medical Coverage
  • Part C – Medicare Advantage / HMO & PPO
  • Part D – Prescription Drug Coverage

In a nutshell, Medicare provides Part A coverage, while Part B is optional. Medicare Parts A and B are considered the “Original Medicare Plan”. With the original Medicare plans, you can choose your own doctors.

Medicare Part C combines Part A and Part B. Private insurance companies approved by Medicare provide this coverage. Generally, you must see doctors in the plan, however, your costs may be lower than in Medicare Parts A and B, and you may get extra benefits.

Medicare Part C is also referred to as “Medicare Advantage” and works similar to an HMO or PPO plan. Medicare Part D, prescription drug coverage, is optional and it consists of private drug companies that are approved by Medicare. Part D covers different drugs, but medically necessary drugs must be covered.

Contrary to popular belief, Medicare does not cover all medical expenses. It does not cover routine physicals, eye and hearing exams, dental care, self-administered prescription drugs and many other medical products and services. Many long-term health problems requiring custodial or private nursing care, such as Alzheimer’s disease, are also not covered. Medicare does not cover custodial care – care primarily for the purpose of helping with daily living or meeting personal needs – when that is the only kind of care a patient needs. Much of the care provided in nursing homes to people with chronic, long-term illness or disabilities is considered custodial care. And even if an individual is receiving care from a participating home health agency, Medicare does not pay for services that are not reasonable and necessary for the diagnosis of a specific illness or injury. In addition, if a doctor places an individual in a hospital or skilled nursing facility when the kind of care the person needs could be provided elsewhere, the individual’s stay will not be considered reasonable and necessary, and Medicare will not pay for the stay. In addition:

  • If an individual stays in a hospital or skilled nursing facility longer than considered necessary, Medicare payments will end when inpatient care no longer is reasonable or necessary
  • If a doctor or other practitioner provides treatment to a person, or that person visits the doctor for treatment more often than is considered medically necessary, Medicare will not pay for the “extra” visits
  • Medicare does not pay for services that are performed by immediate relatives or members of a person’s household, nor will Medicare pay for services paid for by other government programs.

Medicare does, however, cover certain medical conditions and items in hospitals and other settings. Some items are covered under Medicare Part A, and some are covered under Medicare Part B. As long as you have both Medicare Part A and Medicare Part B, these services and items are covered whether you have the Original Medicare Plan or you belong to a Medicare Advantage Plan (like an HMO or PPO), with Medicare Part C.

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