FOCUS ON: Medicare Basics (2006)

What is Medicare?
Medicare is a Health Insurance Program for (1) people age 65 or older, (2) some people with disabilities under age 65, and (3) people with End-Stage Renal Disease (permanent kidney failure requiring dialysis or a transplant).

Medicare has Two Parts:

• Part A (Hospital Insurance) Most people do not have to pay for Part A.
• Part B (Medical Insurance) Most people pay monthly for Part B.

Skilled Nursing Facility Care
If you need inpatient skilled nursing or rehabilitation services after a hospital stay and you meet certain other conditions, hospital insurance helps pay for up to 100 days in a Medicare-participating skilled nursing facility in each benefit period. Hospital insurance pays for all covered services for the first 20 days. For the next 80 days, it pays for all covered services except for a daily coinsurance amount. NOTE: It is important to know that Medicare does not pay for "custodial care" when that is the only kind of care that you need.

The conditions for obtaining Medicare coverage of a nursing home stay are quite stringent. Here are the main requirements: The Medicare recipient must enter the nursing home no more than 30 days after a hospital stay that itself lasted for at least three days (not counting the day of discharge);

The care provided in the nursing home must be for the same condition that caused the hospitalization (or a condition medically related to it); and
The patient must receive a "skilled" level of care in the nursing facility that cannot be provided at home or on an outpatient basis. In order to be considered "skilled," nursing care must be ordered by a physician and delivered by, or under the supervision of, a professional such as a physical therapist, registered nurse or licensed practical nurse. Moreover, such care must be delivered on a daily basis. (Few nursing home residents receive this level of care.)

Home Health Care
If you are confined at home and meet certain other conditions, Medicare can pay the full approved cost of home health visits from a Medicare-participating home health agency. There is no limit to the number of covered visits you can have. If you need one or more of the covered services, then hospital insurance also covers part-time or intermittent services of home health aides, occupational therapy, physical therapy, medical social services, and medical supplies and equipment. A 20-percent copayment applies to covered durable medical equipment (e.g., wheelchairs and hospital beds).

Hospice Care
A hospice program provides pain relief and other support services for terminally ill people. Medicare hospital insurance can help pay for hospice care for terminally ill beneficiaries if the care is provided by a Medicare-certified hospice and certain other conditions are met.

Special "benefit periods" apply to hospice care. Hospital insurance can pay for hospice care for a maximum of two 90-day periods and one 30-day period and one extension period of indefinite duration when the patient is terminally ill.

Prescription Drug Coverage
(2004) Prescription Drug Discount Card Program
You can get a Medicare-approved drug discount card if you have Medicare Part A and/or Part B; and you don’t have outpatient prescription drug benefits through Medicaid.

If you’re enrolled in a state pharmacy assistance program (not Medicaid), you can still get a card. If you already have prescription drug coverage through your current health insurance, or you already get discounts on your prescriptions, review your coverage closely to see if this discount card will save you more money on your prescriptions. Some Medicare-approved drug discount card sponsors have special arrangements with manufacturers to offer free or low cost medications (which may be important if you have low income).

Benefits
If you are eligible for a Medicare-approved drug discount card, you can save between 15%-25% on many brand name drugs and even more on generic drugs. This benefit is available to you regardless of your income, and has no effect on your existing coverage. You may have to pay up to $30 annually for a drug card.

If you have limited income, you will not have to pay any annual enrollment fee, and you may also be eligible for an additional $600 credit to help you pay for prescriptions. If you don’t qualify for the $600 credit, you can still receive the drug discount card and save money on your prescriptions.

Important Reminder: The Medicare-approved drug discount cards were offered as a transition step to help people with Medicare save money on prescription drugs until Medicare prescription drug plans became available. You can sign up for one of the Medicare-approved drug discount cards only until December 31, 2006 and use it until May 15, 2006 or until you join a Medicare prescription drug plan, whichever occurs first.

(2006) Medicare Part D (optional coverage)
Effective January 1, 2006, private companies will offer Medicare prescription drug coverage (Medicare Part D), insurance that covers brand name and generic prescription drugs at participating pharmacies in your area. Everyone who has Medicare is eligible.

If you want coverage, you must choose a Medicare prescription drug coverage plan. The first day you can join is November 15, 2006. If you join between November 15, 2006 and December 31, 2006, the Medicare prescription drug coverage begins January 1, 2006. Up until May 15, 2006, you will be permitted to change your drug plan. Medicare Part D is optional. However, if you choose to not enroll when you are eligible, you will have to pay a higher premium later.

Drug Coverage:
Medicare drug plans do not have to cover every drug that is included in Medicare prescription drug coverage. They only have to cover every type of drug. You should review what drugs are covered by the Medicare drug plans available in your area and try to join one that covers the same prescriptions you take now. If the plan does not cover your exact prescriptions, the plan is required to have a transition period where your current drugs may be covered for a certain length of time while you work with your doctor to find an alternative prescription drug to take that is covered by the plan.

Plan Costs:
Under Medicare Par D, during a calendar year, prescriptions are paid in five steps.

• First, you pay an annual premium of $37 annual premium in 2006.
• Second, and an annual $250 deductible.
• Third, you pay 25% of the next $2,000 of prescriptions, for a total of $500 out of your pocket.
• Fourth, you pay a $2,850 deductible. At this point, you have paid $3,600 out of your pocket for $5,100 of prescription drugs.
• Fifth, you pay 5% ($2 for generic and $5 for name-brand drugs) of your prescription costs.