by: Sandy Altman & Mark Starkman
Host: Hello and welcome to Upfront and Legal. The series that brings you information about the laws that affect all of us in one way or another. One of those ways involves a variety of government programs designed to help Americans pay their bills. For example, medical bills and with the baby boomers segment of our population about to retire, that's an issue a lot of middle-aging workers are concerned about. Here from the firm of Jacobowitz & Gubits, with offices in Walden and Monticello, are Sandy Altman and Mark Starkman to discuss Medicare. Here's Sandy Altman.
SRA: Hi Mark, how you doing today? MTS: Fine Sandy. Thank you.
SRA: Back to you. Welcome to the show. Today we are going to be talking about Medicare. Very important to everyone and let's start with the basics. What is Medicare?
MTS: Essentially, Medicare is a federal health program designed to help elderly persons and some disabled people pay their medical bills.
SRA: And how's it work? How do you qualify for Medicare?
MTS: First, you need to have enrolled in Social Security. Anyone who turns age 65 is eligible for Medicare. Medicare has a number of parts to it, there's what's known as Part A and something known as Part B. Automatically enrolled in Part A coverage upon turning age 65 if you've enrolled in Social Security.
SRA: And what is Part A Medicare?
MTS: Essentially, Part A provides the hospital inpatient coverage. It also provides certain other things, some skilled nursing care in limited circumstances which we can talk about later, some home health care and even some hospice care. But it's basically a hospital portion of Medicare coverage.
SRA: Now that's automatic. What about Part B? Part B Medicare?
MTS: Part B, you need to enroll in. You do it at the same time, or you should do it at the same time you enroll and your eligible for Part A. Part B essentially provides for physician services, doctors, certain durable medical equipment, certain out patient services, certain home care even. It's a little bit different that Part A in that you enroll in it, there is a premium associated with Part B.
SRA: What kind of premium are we talking about here?
MTS: It varies. Currently the monthly premium for Part B services is about $100.00 a month. It does increase a little bit depending on your income. It's about $100.00 a month for
everybody.
SRA: And where does that come from?
MTS: Well, they take it directly out of your Social Security payments. SRA: Everything single month it comes out?
MTS: That's correct.
SRA: Now, does this cover all of your doctor visits completely or is something that basically once you have that Medicare A and Medicare B, then your totally covered for their deductibles and the kind of thing that we might of seen during the time that you had private coverage?
MTS: Let's talk about that. It's a little different for each part. Part A has it's own rules. For instance, before Medicare pays anything of Part A, there's a $992.00 deductible at the present time. Everybody must pay the first $992.00 of their hospital stay.
SRA: Per stay, per year, per life, what is that?
MTS: That's per spell of illness. And that's a term that's used by Medicare. It's essentially a hospital stay. After that, Medicare then pays for the next 60 days of care. All inclusive. Covers them completely. Now that doesn't mean that your gonna end of staying in the hospital for 60 days, but they will pay the first 60 days of your hospital stay.
SRA: And what about doctor's visits? That would be under Part B. Does that cover everything?
MTS: Well, in addition to the monthly premium we talked about, Medicare will pay a participating provider at a particular rate at what's known as a reasonable and customary rate. Not necessarily the doctor's full rate. But they will pay 80% of the reasonable and customary rate. So for instance, a doctor might charge $150.00 for an office visit, Medicare may decide that the reasonable and customary rate for that service is $100.00. They'll pay that provider $80.00. The Medicare recipient, the Medicare Part B recipient, is responsible for the remaining 20.00. They don't have to pay the amount between the reasonable and customary rate that the doctor's actual charge. They only have to pay up through the Medicare's determination of your reasonable and customary rate. It's 20%.
SRA: Now this is only what you call participating doctors? MTS: That's correct.
SRA: Now tell us a little bit about supplemental coverage or Medigap coverage. How does that play into all of this.
MTS: Well, Medigap coverage, or supplemental coverages, are also controlled by the federal government. There's only certain types of plans that can be offered. Not every insurance carrier offers all the different types of plans, but those plans essentially are designed to provide payment for the things that Medicare does not cover. Such as the hospital deductible. Such as the Part B co-payment. Such as additional days over and above the allowed limit by
Medicare. Skilled nursing facility co-payments. All those things might be covered by a particular Medigap policy.
SRA: Regarding skilled nursing homes or skilled nursing facilities. What does Medicare cover?
MTS: That's a great question Sandy. A lot of people think that Medicare covers long term care. It does not. Medicare covers limited stays in a skilled nursing facility for limited purposes. For instance, if you have a hospital stay of at least 3 days, you can be transferred within 30 days after that hospital stay to a skilled nursing facility. When you get to that skilled nursing facility, your care that they provide must be designed to improve your condition. Not some long term care where you stay and they maintain you for the rest of your life. A very limited amount of time your allowed to stay in a skilled nursing facility for improvement in your care. For instance, if you've had a hip replacement or you've fractured your hip, you might need a certain number of days for rehabilitation in a skilled nursing facility. Medicare will cover that up to 20 days provided the other criteria are met.
SRA: What happens after the 20 days?
MTS: Well, after the 20 days end, on the 21st day, you can still stay in the nursing home, but you have a deductible of a $124.00 a day up to a hundred days.
SRA: So the supplemental insurance you talked about before. Does that play into the co-pay there?
MTS: Yes. The skilled nursing facility deductible, from day 21 on, is usually covered by the Medigap policies.
SRA: At a $124.00 a day, that can really mount up. So, it sounds like Medigap insurance and supplemental insurance is really worth looking into.
MTS: It's definitely worth looking into. There are a number of different plans. Each plan offers a different level of benefits but they are very, very regulated by the federal government. So you got to look at different carriers, see what they're offering, try other carriers that may be offering other things, to see if you can get the best plan and something that you can afford. There is, of course, a plus premium to buy those private policies. You want to make sure you can afford it.
SRA: So, can you tell us Mark, what does Medicare not cover?
MTS: Thanks a lot for asking that question. It's important to a lot of people. We know it covers most hospital care and we know it covers most physician care. But there's a whole number of things that are actually not covered that you might of otherwise had covered in other plans before you retired. For instance, it doesn't cover routine eye exams. It doesn't cover dentures, it doesn't cover any procedures that are experimental. It doesn't cover routine dental services. It doesn't cover cosmetic surgery or even routine hearing examinations, or even hearing aids. It won't cover anything over the counter, no over the counter medications and it doesn't cover routine physical exams.
MTS: That's correct.
SRA: Now, if Medicare decides they are not covering a certain procedure or one of those areas that you mentioned, do you have any recourse?
MTS: Well, you might be able to buy a private policy that covers those services. You might be able to pay out of pocket for those services. A routine physical examination may not be all that expensive. I'm not suggesting that everybody can afford it, but you may want to pay for that out of your pocket rather than go without having that routine exam.
SRA: So, if Medicare turns you down for a particular procedure, is there any recourse?
MTS: Well certainly. There's a number of things that can happen. The hospital might want to discharge you early. Medicare may not want to cover services or they may as you said, deny a particular procedure. For instance, if it's, if they think it's experimental, or they think it's not medically necessary, you always have the right to appeal Medicare's decision. Your entitled to a fair hearing on the issues that they raise.
SRA: Now, all these exceptions, is Medicare still a good deal for us?
MTS: As a general rule, Medicare is an excellent deal for most people. There's no premium for the Part A hospital services and those are often very, very expensive services. Hospital stays, even a stay of 3-5 days can be anywhere from $7,500.00 to $10,000.00. Excluding the physician's fees. So that's covered without premium. And covering 80% of physician costs is also a fairly good deal as well. Now, considering the relatively low premium that you pay per month, private insurance policies cost $7,000.00 or $10,000.00 a year in many cases. Medicare, for far, far less than that, will provide most of the essential coverage that somebody needs.
Host: Are you approaching retirement age? Well Mark Starkman and Sandy Altman will return with additional information about Medicare. They'll also take your calls. 765-4321. That's 765-4321. But first, a commercial break.
