Medicare and Military Insurance | Federal Government Programs

Medicare is the “H” in OASDHI. Medicare is a four-part program; Part A, B, C and D.

Medicare Part A

Individuals are eligible for Part A Medicare benefits as of the first day of the month in which they attain age 65, or if they are on dialysis or have been receiving Social Security disability benefits for at least 2 years.

When an individual is eligible for coverage under an employer’s plan as well as under Medicare, Medicare may be the secondary payer to any group health plan provided by an employer.

Part A provides coverage for inpatient hospital services, post-hospital skilled nursing care, and post-hospital home health services during recovery. Part A does not cover physicians’ services.

Enrollment in Part A is automatic for individuals entitled to Social Security benefits. These persons are eligible for Part A benefits on the first day of the month in which they attain age 65.

Part A provides coverage for four different kinds of care:

Inpatient hospital care
Skilled nursing
Home health care
Hospice care

Inpatient Hospital Care

Medicare’s inpatient hospital care benefit helps pay the reasonable charges that result from hospitalization in a semi-private room for medically necessary care. This coverage includes meals, regular nursing services, special care units, drugs taken in the hospital, tests, medical supplies, operating room costs, and other supplies and services.

Medicare covers up to 90 days of inpatient hospital services in each “benefit period,” plus an additional 60 “lifetime reserve” days. A benefit period begins when a beneficiary is admitted to the hospital and ends when the beneficiary has been out of the hospital for 60 days, or has not received Medicare-covered care in a skilled nursing facility for 60 consecutive days.

These 60 lifetime reserve days can be used only once. (Very few people remain in a hospital for 150 consecutive days. In the rare event this happens, every Medigap policy contains a benefit for an additional 365 hospital lifetime days.)

Skilled Nursing Care

Medicare defines the skilled nursing facility benefit quite narrowly. The patient must be receiving medically necessary services provided by a skilled staff in a Medicare-approved facility, following a prior hospital stay of at least 3 days. The care must be performed by or under the supervision of licensed nursing personnel under a doctor’s orders. Any type of custodial, as opposed to skilled, nursing care is not covered. Medicare covers up to 100 days of care in a skilled nursing facility for each benefit period if all of Medicare’s requirements are met.

Home Health Care

Medicare covers up to 100 home health visits per spell of illness following a hospital stay under the Part A benefit. If a patient is confined at home, the home health care benefit provides for certain services performed by a participating home health care agency. This may be a public or private agency that provides skilled nursing or therapeutic services in the home. Eligible expenses include:

Intermittent part-time nursing care
Physical, occupational, or speech therapy
Home health aides
Medical social services
Medical supplies
Certain durable medical equipment, such as wheelchairs or hospital beds

Hospice Care

A hospice is organized primarily for the purpose of providing support services to terminally ill patients and their families. For terminally ill patients, the hospice care benefit provides inpatient and outpatient hospice care.

What Part A Does Not Cover

Private duty nursing
Charges for a private room, unless medically necessary
Conveniences, such as a telephone or television in a hospital room
The first 3 pints of blood received during a calendar year

Medicare Part B

Medicare Part B is available to anyone covered under Part A. Medicare Part B provides coverage for doctors’ services and outpatient medical services and supplies. Part B is optional and requires subscribers to pay a monthly premium, deductibles, and a 20% co-pay on all charges for covered services. Part B pays (up to certain limits) for professional medical services and other services if prescribed by a physician.

While enrollment in Part B is voluntary, when individuals become eligible for Part A they will be enrolled and their premium payment established unless they sign a form indicating they do not want the Part B coverage.

People who choose not to enroll in Part B during their initial enrollment period may do so later. An open enrollment period occurs each year from January 1st through March 31st. When enrollment occurs during this period, coverage begins on July 1st.

The most common reason to “opt out” of Part B coverage is that the individual is still working and covered by a group plan which offers better benefits than Part B.

Sidenote

Know this...

Employers with fewer than 20 employees may disqualify an employee from group plan eligibility if they are eligible for Medicare.

Doctor’s Services

Part B covers most physician’s services and supplies furnished as part of such services. Some of the specific covered services include:

Medical and surgical services, including anesthesia
Office visits, house calls, and hospital calls
Radiological and pathological services provided by a physician
Medical supplies furnished as part of a physician’s professional services
Second opinions before surgery
Diagnostic tests that are part of the patient’s treatment
Services of the doctor’s office nurse
Physical, occupational, and speech therapy services
Blood transfusions
Drugs that cannot be self-administered

Outpatient Medical Services and Supplies

Medicare Part B will help pay for certain services received as an outpatient from a Medicare-certified hospital including:

Outpatient clinic services
Emergency room services
X-rays, whether for therapy or diagnosis, billed by the hospital
Medically necessary ambulance services
Purchase or rental of durable medical equipment used in the patient’s home
Artificial limbs and eyes
Artificial replacements for internal organs (for example, colostomy bags and supplies)
Braces for neck, back, or limbs
Casts, splints, and surgical dressings
Blood transfusions (after the first 3 pints)
Physical, occupational, and speech therapy provided in a therapist’s office, or in the patient’s home
Drugs that cannot be self-administered
Mammograms, pap smears, and colon-rectal screenings
Diabetes glucose monitoring and education
Flu shots

What Part B Does Not Cover

Routine physical exams
Eye exams, fitting of eyeglasses or contact lenses
Hearing exams, fitting of hearing aids
Most immunizations
Routine foot care and treatment of flat feet
Cosmetic surgery (unless needed due to an accidental injury)
Skilled nursing home care costs over 100 days per benefit period
Intermediate nursing home care
Physician charges above Medicare’s approved amount
Most outpatient prescription drugs
Care received outside the United States
Custodial care received in the home
Acupuncture
Orthopedic shoes
The first 3 pints of blood

Medicare Part C

Advantage Plans

Many HMOs and PPOs have contracted with the federal government to offer Medicare advantage plans. These plans often provide for broader benefits than Part A and Part B combined. Medicare beneficiaries who have Part A and Part B can join one of many Part C plans and receive Medicare covered benefits through the plan. In addition to the monthly Medicare Part B premiums, Medicare advantage plan subscribers pay an additional premium for the extra benefits the advantage plan offers. The benefits of Part C include elimination of the need to purchase a Medicare supplement (Medigap) policy, since Medicare advantage plans generally cover the same benefits that a Medigap policy would.

Medicare Part D

Prescription Drug Insurance

Medicare Part D prescription drug plans are open to all people who are eligible for Medicare. Although participation is voluntary, no one may be denied coverage for health reasons. Part D plans are underwritten by private insurance companies. Typically, the federal government pays 75-80% of the beneficiary’s prescription drug costs. Calendar year benefits are typically subject to a $250 deductible and co-insurance.

Medicare determines a reasonable charge for a particular service. If the actual charge is more than that, the patient must pay the difference, unless the doctor or supplier agrees to accept an assignment. Assignment means that the doctor or supplier will accept Medicare’s approved amounts as full payment and cannot legally bill the patient for anything above that amount. Doctors and suppliers are not required to accept assignment, but most do. If Medicare decides that an expense is not necessary, the patient must pay the entire cost.

Government insurance programs

TRICARE and CHAMPUS

TRICARE is regionally managed health care for domestic active duty military personnel and their families, retirees and their families, and survivors of all military service personnel who are not eligible for Medicare.

TRICARE offers eligible beneficiaries 3 choices for their health care:

TRICARE Prime, with military treatment facilities being the principal source of health care.
TRICARE Extra, which is a preferred provider option similar to PPO.
TRICARE Standard, which is a fee-for-service option.

Active duty personnel and family members may enroll in TRICARE Prime. TRICARE Prime coverage for active duty members and their families is first dollar coverage with no deductibles or co-payments.

CHAMPUS is the same as TRICARE, but is for military personnel stationed abroad.

Active and retired military personnel are also eligible for life insurance benefits through SGLI (Servicemen’s Group Life Insurance).

Lesson Summary

Medicare is part of OASDHI with four parts: Part A, B, C, and D.

Medicare Part A covers:

Inpatient hospital care
Skilled nursing care
Home health care
Hospice care

Part B covers doctors’ services and outpatient medical services and supplies, with enrollment being optional. Medicare Part C Advantage Plans offer broader benefits, eliminating the need for a Medigap policy. Part D provides prescription drug coverage.

TRICARE and CHAMPUS offer health care for active duty military personnel, retirees, survivors, and their families, with options like TRICARE Prime, Extra, and Standard. These programs are also supplemented by SGLI for life insurance benefits for active and retired military personnel.

Definitions

Hospital Benefits: Benefits payable for charges incurred while the insured is confined to, or treated in, a hospital–as defined in the policy. Also, Medicare Part A is sometimes referred to as “Hospital Benefits”.
Inpatient: A person who is admitted to a hospital as a resident case.
Medicare: A state assistance program, passed under Title XVIII of the Social Security Amendments of 1965, to provide hospital and medical expense insurance to those over 65 years of age.
Medicare Advantage Plan: An HMO, PPO, or Private Fee-For Service Plan that contracts with Medicare Advantage Prescription Drug Plan also includes drug benefits. The plan may provide extra coverage such as vision, hearing, dental, and/or health and wellness programs. Medicare pays a fixed amount for insured’s care every month to the companies offering Medicare Advantage plans.
Medicare Part D: Part D coverage written through individual contracts; stand-alone Part D coverage written through group contracts and certificates; and Part D coverage written on employer groups where the reporting entity is responsible for reporting claims to the Centers for Medicare & Medicaid Services (CMS).
Open Enrollment Period: (1) With group insurance, this is a period during which employees can elect to enter a group plan, usually without providing evidence of insurability. (2) With Medicare, people who choose not to enroll in Part B during their initial enrollment period, may do in subsequent years from January 1st through March 31st.