Understanding Medicare- Part One
This is a 3-part series explaining the workings
of Medicare in understandable terms
The Age 65 Milestone
Medicare and Social Security are the huge prizes for US citizens approaching the age 65 milestone. Upon reaching this milestone, the big bulk of one’s healthcare expenses –doctors, hospitalizations and medications- get picked up by Medicare, the federal health insurance agency.
Baby boomers, folks born between1946 and 1964 and currently coming of Medicare age at the rate of 10,000 a day, count the days before reaching that highpoint, for not only do their out-of-pocket healthcare costs drop dramatically, but they also start receiving social security payments from the government (a slightly diminished social security package can be secured starting at age 62). The monthly deductions from their paychecks that they’d incurred during their entire working life finally come back to roost.
Medicare also covers some people who are not yet 65 such as those who have disabilities, as well as those who suffer from end-stage kidney disease.
Overview: The Social Safety Net
Prior to Franklin D. Roosevelt and the run-up to WWII, there was no social safety net. If you were old and sick, you were on your own. If you were young and disabled, you were on your own. The safety net consisted entirely of family and friends, and if your family and friends had no means to assist you financially, you were out of luck.
For a long time following that, Social Security, Medicare and Medicaid formed the American social safety net that protects the poor and the middle classes. This safety net was thus first launched with the Social Security program set up under FDR in 1935, and then followed by Medicare, signed into law by President Johnson in 1965. Medicaid subsequently started providing protections in 1980, consisting of Federal subsidies to individual States for the purpose of providing their poor, who fitted into certain categories of eligibility, with managed care programs.
Medicare Part D then took hold under President Bush in 2006. If you were 65 or older, it was a program aimed at lessening the financial burden of prescription drugs for you. At first, that program, much like the other big government mandates, encountered several hiccups that necessitated tweaks and adjustments. If that reminds you of other later programs that also required periodic adjustments, you are not alone.
Finally, the Patient Protection and Affordable Care Act, aka the ACA -and nicknamed Obamacare- constituted a massive expansion of the safety net and was intended to bridge the large gaps in the protections that these prior programs provided.
Before President Obama signed the ACA into law in 2010, almost 60 million Americans (25% of the 18-64 age population) did not have healthcare insurance. The ACA expanded the existing health care system –particularly Medicaid- in order to accommodate those uninsured. In addition, the ACA also intended to render healthcare more affordable and less exclusive.
The overhaul involves approximately 18% -or 1/6th- of the U.S. Gross National Product, and it brings America closer in line with most other developed nations in terms of the healthcare coverage afforded its poor and middle class populations. It puts in place major health insurance reforms that will keep rolling out through 2020.
The ABCs of Medicare Coverage
Medicare Part B – Professional Services
Medicare Part C – Medicare Advantage
Medicare Part D – Prescription Drug Coverage
Medicare Part A: Taking into consideration that some copayments, coinsurance and annual deductibles may apply, for all practical purposes Medicare part A covers the major part of the costs of hospitalizations, post-hospitalization care, rehabilitation therapists, skilled nursing care, whether in a nursing facility or at home, home health services, hospice services, and some short-term nursing home stays for rehabilitation purposes.
For the purpose of reimbursing healthcare providers, Medicare defines the length and type of services and tests that are provided. Here are three examples where Medicare Part A does not reimburse the full costs:
Hospital care: Inpatient costs, including a semi-private room, are covered, except that you pay $1,216 (and no copayment) for days 1–60, $304 for days 61-90, and $608 per “lifetime reserve day” after day 90.
Home Health Services: If you are home bound, and a doctor certifies that it is medically necessary for you to get services at home, you may be able to receive, free of charge for 20 days, the services of a Medicare-certified Home Health Care agency that can provide you with nursing and therapy care.However, after day 20, you pay $152 per day for days 21-100, and you pay the full cost after that. Also, if you were to need medical equipment from day 1, Medicare would reimburse only 80% of those costs.
Hospice Care: You pay almost nothing for hospice care, for Medicare covers semi-private rooms, meals, general nursing, and drugs as part of your hospital inpatient treatment, and other hospital services and supplies.However, you pay a copayment of up to $5 per prescription for outpatient prescription drugs for pain and symptom management, and you pay 5% of the Medicare-approved amount for inpatient respite care.
Continue reading in “Understanding Medicare” Part Two...
