Medicare and Medicaid: Some Basic Facts

Joyce Remy

How Medicare Works

Medicare is the federally funded program that provides partial health care coverage for most Americans 65 and over and for persons who are disabled.

Medicare: Part A

Medicare Part A covers many in-patient services, including:

• hospital inpatient care
• up to 100 days coverage in a skilled nursing facility
• hospice care for the terminally ill.

Medicare Coverage for Care in a Nursing Home

Under the current system of Medicare payment to hospitals, the hospital's incentive is to release patients as soon as they no longer need hospital services. This means that, in many cases, patients will be well enough to leave the hospital, but not well enough to return home. Medicare helps pay for the cost of care in a skilled nursing facility on a limited basis (up to 100 days) for those in this situation. Nursing home coverage is subject to these limitations:

• The nursing home care must follow a period of at least three consecutive days of hospitalization and relate to the same medical condition.
• The patient must require skilled nursing or rehabilitation services on a daily basis.
• The patient is responsible for a co-payment charge beginning with the 21st day of care.

Remember: Medicare payment is never an option for extended or long-term care in a nursing home.

Medicare: Part B

Medicare Part B is an optional part of the Medicare program. When a person enters the Medicare program, he or she must elect whether or not to subscribe to Part B services. If a person chooses Part B coverage, there is a premium to pay, which is deducted from the person's monthly Social Security check.

Medicare Part B covers, for example:

• physicians' services
• certain preventive care tests and screenings
• outpatient hospital services
• physical and occupational therapy
• speech pathology services
• x-rays, laboratory charges, and other diagnostic tests
• ambulance service
• prosthetic devices
• outpatient surgical and rehabilitation services.

The limitations on coverage through Medicare Part B include an annual deductible and a co-insurance payment based on a percent of the Medicare approved charge.

Medicare Prescription Drug Benefit

This new benefit is called "Medicare Part D." Medicare beneficiaries can now sign up for an optional Medicare drug plan or join a private health plan that includes drug coverage. Premiums average about $35/month, but vary depending on the plan you choose. Coverage, deductible, drugs covered and gaps in coverage also vary from plan to plan. Visit www.medicare.gov and select "Compare Medicare Prescription Drug Plans" for more information.

Preventive Benefits

New screening and preventive coverage has also been recently added to Medicare. People with Medicare can now take advantage of three important new benefits added to the preventive benefits package:

1. A one-time preventive physical exam, which must occur within the first six months of enrolling in Part B.
2. Cardiovascular screening
3. Diabetes screening

These new benefits are in addition to the preventive benefits that were already available, including cancer screening, immunizations, bone mass measurement, glaucoma screening and wellness education.

How Medicaid Works

Medicaid is a joint federal and state program to help pay the cost of medical expenses for persons with limited financial means. Coverage for low-income older adults includes:

• payment of Medicare Part B premiums
• payment of Medicare co-payments and deductibles, if there is no
  supplemental insurance
• extended nursing home care.

Unlike Medicare, Medicaid is not automatically available to people based on reaching age 65 or being disabled. To qualify for Medicaid, a person's monthly income and overall resources must fall below certain specified amounts, which vary from state to state. However, certain resources are exempt or disregarded in determining eligibility.

The procedures for establishing Medicaid eligibility include:

• qualification based on income and resources
• determination of level of care
• completion of required forms.  

© Caresource Healthcare Communications