Medicare FAQ

by Nolo.com
From the Nolo.com Retirement & Elder Care Center

Answers to frequently asked questions about who is eligible for Medicare and what medical expenses Medicare covers.

What's Below:

What is Medicare?
Who is eligible for Medicare Part A coverage?
How much of my bill will Medicare Part A pay?
What kinds of costs does Medicare Part B cover?
How much of my bill will Medicare Part B pay?

At present, the Medicare system provides some healthcare coverage for almost 40 million people, most of them seniors. Medicare pays for most of the cost of hospitalization and much other medical care for older Americans -- about half of all medical costs for people over 65.

Despite its broad coverage, Medicare does not pay for many types of medical services, and pays only a portion of the costs of other services. To take maximum advantage of the benefits Medicare does provide, to protect yourself against the gaps in Medicare coverage and to understand the current political debate about the program's future, you must become well-informed about how the Medicare system works.

What is Medicare?

Medicare is a federal government program that helps older and some disabled people pay their medical bills. The program is divided into two parts: Part A and Part B. Part A is called hospital insurance and covers most hospital stay costs, as well as some follow-up costs. Part B, medical insurance, pays some doctor and outpatient medical care costs.

Who is eligible for Medicare Part A coverage?

There are two types of eligibility for Medicare Part A hospital insurance. Most people age 65 and over are covered for free, based on their work records or on their spouse's work records. People over 65 who are not eligible for free Medicare Part A coverage can enroll in it and pay a monthly fee for the same coverage. The premium increases by 10% for each year after your 65th birthday during which you are not enrolled. If you enroll in paid Part A hospital insurance, you must also enroll in Part B medical insurance, for which you pay an additional monthly premium.

How much of my bill will Medicare Part A pay?

All rules about how much Medicare Part A pays depend on how many days of inpatient care you have during what is called a benefit period or spell of illness. The benefit period begins the day you enter the hospital or skilled nursing facility as an inpatient and continues until you have been out for 60 consecutive days. If you are in and out of the hospital or nursing facility several times but have not stayed out completely for 60 consecutive days, all your inpatient bills for that time will be figured as part of the same benefit period. Medicare Part A pays only certain amounts of a hospital bill for any one benefit period -- and the rules are slightly different depending on whether the care facility is a hospital, psychiatric hospital, skilled nursing facility or care received at home or through a hospice.

All those covered by Medicare Part A must pay an initial amount before Medicare will pay anything. This is called the hospital insurance deductible. The deductible is increased every January 1.

What kinds of costs does Medicare Part B cover?

Part B is medical insurance. It is intended to help pay doctor bills for treatment in or out of the hospital. It also covers many other medical expenses you incur when you are not in the hospital, such as the costs of necessary medical equipment and tests.

The rules of eligibility for Part B medical insurance are much simpler than for Part A: If you are age 65 or over and a citizen of the United States, or you are a resident of the United States who has been here lawfully for five consecutive years, you are eligible to enroll in Medicare Part B medical insurance. This is true whether or not you are eligible for Part A hospital insurance.

Part B medical insurance is intended to cover basic medical services provided by doctors, clinics and laboratories. The lists of services specifically covered and not covered are long, and do not always make a lot of common sense. Making the effort to learn what is and is not covered can be important. You may get the most benefits by fitting your medical treatments into the covered categories whenever possible.

Part B insurance pays for:

doctor services (including surgery) provided at a hospital, doctor's office or your home
mammograms, pelvic exams, bone density tests and PAP smears for women
medical services provided by nurses, surgical assistants, or laboratory or X-ray technicians
outpatient hospital treatment, such as emergency room or clinic charges, X-rays and injections
an ambulance, if required for a trip to or from a hospital or skilled nursing facility
drugs or other medicine administered to you at a hospital or doctor's office
medical equipment and supplies, such as splints, casts, prosthetic devices, body braces, heart pacemakers, corrective lenses after a cataract operation, glucose monitoring equipment and therapeutic shoes for diabetics and equipment such as ventilators, wheelchairs and hospital beds
some kinds of oral surgery
some of the cost of outpatient physical and speech therapy
a limited number of services by podiatrists and optometrists
some care and counseling by psychologists, social workers and daycare personnel
some preventative cancer screening exams
manual manipulation of out-of-place vertebrae by a chiropractor, and
part-time skilled nursing care, physical therapy and speech therapy provided in your home.

How much of my bill will Medicare Part B pay?

When all your medical bills are added up, you will see that Medicare pays, on average, only about half the total. There are three major reasons why Part B medical insurance pays for so little.

First, Medicare does not cover a number of major medical expenses, such as routine physical examinations, medications, glasses, hearing aids, dentures and a number of other costly medical services.

Second, Medicare only pays a portion of what it decides is the proper amount -- called the approved charges -- for medical services. When Medicare decides that a particular service is covered and determines the approved charges for it, Part B medical insurance usually pays only 80% of those approved charges; you are responsible for the remaining 20%.

Note, however, that there are now several types of treatments and medical providers for which Medicare Part B pays 100% of the approved charges rather than the usual 80%. These categories of care include: home health care, clinical laboratory services and flu and pneumonia vaccines.

Finally, the approved amount may seem reasonable to Medicare, but it is often considerably less than what doctors actually charge. If your doctor or other medical provider does not accept assignment of the Medicare charges, you are personally responsible for the difference.