Health Care Systems - Medicare

Medicare is the federal health insurance program for senior citizens and for some younger individuals who are disabled. Nearly all Americans age sixty-five or older are covered under Medicare. Medicare is a component of the Social Security program, and anyone who is eligible for Social Security benefits will be automatically enrolled. (Social Security is a government program that provides financial assistance to senior citizens, the unemployed, or the disabled. Money is funneled into the program by a tax on employers and employees.)

This is not to say that health care choices become simpler for senior citizens. While Medicare has a great deal to offer, it does not cover all the medical care an individual will generally need.

Medicare has two parts. Medicare Part A is hospital insurance and applies to hospital costs, nursing facilities, psychiatric hospitals, and hospice care (care for the terminally ill). If an individual qualifies for Medicare, Part A is free of cost. If an individual does not automatically qualify for Medicare, Part A can be purchased for a monthly fee.


Medicare offers two programs for low-income people over age sixty-five and for the disabled. Under the Qualified Medicare Beneficiaries Program (QMB), people with incomes at or below the federal poverty level do not have to pay the standard Medicare copayments and deductibles. The poverty level varies by the size of the household and is updated every year. Savings and assets cannot exceed four thousand dollars for one person and six thousand dollars for a couple. The state picks up the Medicare costs for those individuals who qualify for QMB.

The Specified Low Income Medicare Beneficiary (SLMB) Program assists people with incomes at or near the poverty level. The SLMB program covers the costs for Medicare Part B.

For more information on these programs, contact the local Department of Social Services or Area Agency on Aging or call the Medicare Hotline at 1-800-683-6833.

Medicare Part B is medical insurance that covers certain doctors' fees, lab tests, X rays, many outpatient services, home health care, and in-home use of medical equipment. Individuals who qualify for Medicare are automatically enrolled in Part B unless it is declined. Part B has a monthly cost that will be deducted from a person's Social Security check.

Medicare pays for many health care expenses but not all of them. In particular, Medicare does not cover most nursing home care, long-term care in the home, routine foot care, most dental care or dentures, most immunization shots (except flu shots), most routine checkups and related tests, or prescription drugs outside the hospital. Many senior citizens will require services that Medicare does not cover. Medicare also requires copayments and deductibles for covered services, and these costs can add up over time.

To limit the risk of having to pay for medical services, a person should first always ask doctors if they accept Medicare. It's also important to ask if the doctors accept Medicare assignment. Medicare assignment is the amount of money that Medicare has designated for certain services. If the doctor does not agree with the amount of the Medicare assignment, then the doctor will bill the patients, who must then make up the difference with their own money. Finally, patients should ask their doctors if Medicare covers the services planned for their visits.


Medigap is private insurance that people buy to supplement Medicare. Medigap literally fills in the gap when Medicare doesn't pay for something, such as prescription drugs not used in a hospital. It also helps to pay for some of the extra costs that Medicare requires, such as copayments. Medigap should be seriously considered if the individual can afford the cost. In most states, there are ten Medigap programs from which to choose, labeled A through J. All insurers offering Medigap insurance are minimally required to offer plan A and can offer other plans at their discretion.


The ten Medigap plans vary significantly in their coverage of services and in their costs. As with all insurance, individuals should choose the plan that most fits their health care needs. In selecting a Medigap plan, one must remember that Medicare pays only for services determined to be medically necessary and only the amount determined to be reasonable. If Medicare won't pay for a specific service, chances are that Medigap won't either. As explained above, Medigap helps pay for outpatient prescription drugs or the copayments that go along with Medicare. It may not cover services that are not covered by Medicare, but it will help lessen the total costs of health care. The Medigap premium will depend either on an age-entry rating or an attainedage rating. Using an age-entry rating, the premium will be higher the older one is upon entering the plan, but does not change as one ages. Using an attained-age rating, the premium will increase every year.

Medicare and HMOs

Medicare normally operates on a fee-for-service basis. Patients are billed for each visit to a health care provider. In a growing number of places, though, HMOs are available to Medicare enrollees as well.

HMO coverage can be more comprehensive, and thus preferable, to a fee-for-service plan. However, HMOs require that members see only providers within the HMO network. A member who sees a doctor outside of the network is likely to pay more money.

HMOs provide many benefits to complement Medicare coverage: costs are low, there is no paperwork, and primary care physicians coordinate the care. On the downside, HMOs may limit services due to cost, members must get a referral in order to see a specialist, members must see doctors from a plan-approved list, and the health care is confined to a specific location. Senior citizens who spend the winter months away from home, for example, might find an HMO unsuitable because the plan does not cover their health care costs during that time.


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