Medicare and Medicaid
Medicare, administered by The Centers for Medicare & Medicaid Services (CMS), is the U.S.’s largest health insurance program covering about 40 million people. It was created as part of the Social Security Act in 1965.
Medicare pays for the first 80% of medical costs; the remaining 20% is paid by the patient out of their own pocket or with a private supplemental insurance plan.
The basic qualifications are:
- Must be a legal resident of the U.S. for the last five years.
- Age 65 and older
- Under 65 with certain disabilities
- People of any age with End-Stage Renal Disease.
The program has two parts:
- Part A is hospital insurance and is premium-free for most people and becomes available automatically as soon as you turn 65.
- Part B is optional medical insurance paid on a monthly basis. The sign up period is 7-month period that begins 3 months before you turn 65.
Part A helps pay for inpatient hospital care (room, tests, food, and doctor’s fees), critical access hospitals (small rural facilities), skilled nursing facilities, hospice, and some home health. You must meet the following to qualify for stays in the skilled nursing facility:
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- Care rendered must be skilled (not cooking, cleaning, etc.).
- Your preceding hospital stay must be at least three days.
- Your stay must be for something diagnosed at your previous hospital stay.
The maximum stay per ailment is 100 days with the first 20 days paid by Medicare; the remaining 80 days require a co-pay.
Part B covers doctors’ services (x-rays, laboratory and diagnostic tests, flu and pneumonia vaccinations, blood transfusions, some ambulance transportation, chemotherapy, and other services), outpatient care, physical and occupational therapists, and some home health. It generally pays for medically necessary services and supplies. The 2011 monthly premium is $115.40 but could be higher if you’re income is above $85,000 (single; $170,000 joint).
Part B also covers durable medical equipment (canes, walkers, wheelchairs, etc.), prosthetics and orthotics, surgical dressings, and therapeutic shoes and inserts. According to the CMS website, “Coverage is equal to 80 percent of the lower of either the actual charge for the item or the fee schedule amount calculated for the item, less any unmet deductible. The beneficiary is responsible for 20 percent of the lower of either the actual charge for the item or the fee schedule amount calculated for the item, plus any unmet deductible.”
Medicaid is a federal health insurance program designed for people with low incomes, the disabled, blind, aged and those with limited resources (usually $2,000 in assets). Each state operates its own program though funding is matched by the federal government starting at 50%. The program and its requirements vary from state to state. For those who don’t qualify for Medicaid, states have their own medical assistance.
In 2008 there were 49 million people receiving Medicaid. The program cost $204 billion that year.
The CMS encourages the following groups of people to apply for coverage:
- Pregnant women whether married or single.
- Parents or guardians of children under 18 (21 in some states) if on a limited income.
- A teenager living on his own.
- A person 65 or older, blind, or disabled with limited income.
- Children if he or she is a U.S. citizen or a lawfully admitted immigrant, even if the parent(s) is not.
- People approved for Supplemental Security Income are usually automatically eligible.
Beginning in 2014 as part of the Patient Protection and Affordable Care Act (2010), people with income up to 133% of the poverty level qualify for Medicaid.
Updated: Feb 09, 2011