For a better understanding of the "basics" of Medicare, read Senior Services’ "Medicare Primer." It describes the differences between traditional Medicare and Medicare Advantage and notes some of the advantages and disadvantages of each. In the Primer you can also find the  2008 Medicare Deductibles, Coinsurance, and Premiums for traditional Medicare services.

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MEDICARE PRIMER

Congress created Medicare in 1965 as an amendment to the Social Security Act to guarantee a minimum amount of health care for people age 65 or older. The law created a health insurance program for seniors and linked the program with the retirement and survivors’ benefits available to eligible persons through Social Security.

In 1973, Congress expanded Medicare eligibility to include persons who receive Social Security disability benefits or Railroad Retirement disability benefits for 24 months or longer. Coverage also became available to persons diagnosed with end-stage renal disease (ESRD) who require continuing dialysis or a kidney transplant. People aged 65 or older who are not eligible for Medicare due to an insufficient work history are able to purchase or "buy into" the Medicare program.

Traditional Medicare has two parts:

Hospital Insurance, known as Part A, covers hospitalization, skilled nursing facility care, certain home health care, hospice care, and blood.

Medical Insurance, known as Part B, covers medical expenses (like physicians’ services, medical services and supplies, physical, occupational, and speech therapy, diagnostic tests, and durable medical equipment); clinical laboratory services; certain home health care; outpatient hospital treatment; dialysis; medically necessary ambulance services; blood; and Preventive Screening Benefits.

Most beneficiaries receive Part A coverage at no cost because they have already paid into the Part A trust fund through their payroll taxes while they, or their spouses, were working. However, beneficiaries typically must pay a monthly premium for Part B coverage.

In 2006, the Medicare Prescription Drug benefit (Part D) became available for the first time.  Part D plans are administered by insurance companies.  Since many Part D plans are available, consumers should research each plan to determine which will cover the drugs they need and which will most likely cost them the least in out-of-pocket expenses.  SHIBA can help.       

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Medicare Costs

1. Traditional Medicare

2008 Medicare Deductibles, Coinsurance, and Premiums for Traditional Medicare

Hospital Insurance (Part A)

(dollar amounts listed below are to be paid by the beneficiary)

Medical Insurance (Part B)

Medigap Policies

Some beneficiaries who choose traditional Medicare will also choose to pay monthly premiums for supplemental health insurance sold by private insurance companies. These policies are called "Medigap" policies because they fill the "gaps" for certain services or costs that Medicare does not cover.

2. Medicare Advantage

Another way Medicare beneficiaries may receive their benefits is through a Medicare Advantage plan. By enrolling in a managed care plan, beneficiaries receive the same benefits as they would in traditional Medicare.  In addition, they may receive other benefits such as for dental, eyeglasses, or hearing aids.  The difference is that they receive the benefits through the specific health care providers or facilities associated with the plan. This is usually referred to as the plan’s "network."

One of the benefits of joining a Medicare managed care plan is that there maybe less costs to members, although that is not always the case.  Ask a SHIBA Counselor for more information and consider all options carefully before choosing coverage. 

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Medicare Savings Programs for low income beneficiaries

Medicare Savings Programs help people on Medicare pay for some or all Medicare-related costs. These programs are for Medicare beneficiaries who are low income and have limited assets.

To qualify...

Your income must fall within the guidelines below

	Individual	Couple
QMB	$851	$1141
SLMB	$1021	$1369
QI-1	$1,149	$1,541

AND...

Your assets* must be less than $4,000 for an individual or $6,000 for a couple.

* Assets include: Cash Bank Accounts Certificates of Deposit Savings Bonds Stocks Real Property (except the house you live in) Recreational Vehicles

* Assets do NOT include: The home you live in One car if used for medical appointments Burial Plots Furniture Life insurance with a cash surrender value of $1500 or less.

What are the Medicare Savings Program Benefits?

QMB- Part A and B Medicare premiums, co-insurance and deductibles
SLMB-Part B Premium
QI-1- Part B Premium

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