Medicare Basics
What is Medicare? Who is eligible?
Medicare is a federal insurance program for people 65 years and older. Younger people also may be eligible because of disability or permanent kidney failure. The program is run by the Centers for Medicare & Medicaid Services (CMS). The Social Security Administration (SSA) is responsible for the application and eligibility processes.
What is original Medicare?
Original Medicare has two parts--A & B.
Medicare Part A-hospital insurance covers care in hospitals and skilled nursing facilities. It also covers some outpatient services, home health care and hospice. If you are eligible, Medicare Part A is premium-free because you or your spouse paid Medicare taxes while you were working.
Medicare Part B covers doctor visits in the hospital or in the office, laboratory tests, x-rays, ambulance transports and durable medical equipment. It also covers physical, speech and occupational therapy. You automatically are eligible for Part B if you are eligible for Part A. The Medicare Part B premium is paid monthly through your Social Security check. In 2007, the monthly premium for Part B is $93.50.
Original Medicare is a traditional pay-per-visit arrangement. Each time you receive a service from a Medicare provider, a claim is submitted for payment. You can go to any doctor, hospital, or provider that accepts Medicare. By law, all individuals who provide a service to a Medicare beneficiary are required to submit a claim to the appropriate Medicare carrier for processing. In most cases, Medicare pays 80% of the allowed amount and you are responsible for the deductible and co-insurance.
Your Medicare card and number
Once you are eligible for Medicare you will receive a Medicare card in the mail from the Social Security Administration. The card is red, white and blue and contains your name, Medicare number and what you are entitled to (A, B, or both) and your effective dates for these benefits. An alpha character follows most Medicare numbers. The most common characters are A (wage earner), B (spouse of a wage earner) and D and D5 (indication your spouse is deceased). These characters tell the Social Security Administration how you qualified for Medicare and also make your Medicare number unique to you. Your card is very important and should be treated like a charge card. Don't lend out your card to anyone, keep it in a safe place, and replace it if the card is lost or stolen. You can get a new copy of your card by calling the Social Security Administration at (800) 772-1213.
Important definitions
Deductible: The upfront amount you must pay before Medicare makes payment to you or your providers. Medicare deductibles apply to Part A and Part B. The deductible for Part B for 2007 is $131. The deductible for a Part A inpatient hospital stay for 2007 is $992 each benefit period.
Co-insurance: After you have paid the annual deductible, you will owe a share of the Medicare approved amount. This applies to Part A and Part B. Your co-insurance for Part B is 20% of the allowed amount. Your co-insurance amount for Part A varies with the type of service rendered.
Page Last Updated: Thursday, 17-Jul-2008 10:11:17 CDT
