Medicare benefits generally become available at the beginning of the month in which an individual reaches age 65. An individual whose birthday falls on the first day of a month is treated as having reached age 65 on the last day of the month immediately preceding his or her birthday. Assuming an individual is otherwise eligible for Medicare, benefits become available at age 65 even if the individual is still working. Individuals who qualify for Medicare on the basis of disability — other than those who are disabled due to Lou Gehrig’s disease (amyotrophic lateral sclerosis) — must be continuously disabled for 24 months before they will be able to receive Medicare benefits. There is no waiting period for Medicare benefits when eligibility is based on disability due to Lou Gehrig’s disease or on end-stage renal disease.
As enrollment season approaches, here are answers to several core questions your clients may ask. If you have additional queries, please leave them in the comments section.
1. Can a person age 65 or over qualify for Part A (Hospital Insurance) benefits without qualifying for Social Security or Railroad Retirement benefits?
Certain individuals age 65 or over and otherwise ineligible for Part A (Hospital Insurance) may enroll voluntarily and pay a monthly premium if they also enroll in Part B (Medical Insurance). Any such person must also be a resident of the United States and also either a U.S. citizen or an alien lawfully admitted for permanent residence status (who has continuously resided in the United States for at least five years immediately before applying for Medicare benefits).
2. Is there any way that an individual not automatically eligible for Part A (Hospital Insurance) can be enrolled?
Yes, provided the individual (1) has attained age 65, (2) is enrolled in Part B (Medical Insurance), (3) is a resident of the United States and is either (a) a citizen, or (b) an alien lawfully admitted for permanent residence who has resided in the United States continuously during the five years immediately preceding the month in which he applies for enrollment, and (4) is not otherwise entitled to Part A (Hospital Insurance) benefits.
Certain disabled individuals under age 65 may also be able to obtain Part A (Hospital Insurance) coverage by paying monthly premiums. This category of eligibility applies to someone who previously qualified for Medicare coverage on the basis of disability and continues to be disabled, but whose income exceeds the level allowed under Social Security for payment of disability income benefits to disabled persons and thus loses eligibility for Medicare benefits under the normal disability provisions.
Certain government employees who otherwise do not qualify for automatic Part A (Hospital Insurance) may also be able to enroll for Part A coverage by paying a premium.
For individuals who voluntarily enroll in Part A (Hospital Insurance) by paying a premium, the premium is $426 a month in 2014 (but see paragraph below for premium reduction exception). This premium amount increases by up to 10 percent for those who must pay a premium surcharge for late enrollment.
The Part A (Hospital Insurance) premium is reduced — by 45 percent (to $234 a month in 2014) — for individuals with credits for 30 or more quarters paid into the Social Security system (and certain current, surviving and divorced spouses of such individuals). The reduced premium amount increases by up to 10 percent for those who must pay a premium surcharge for late enrollment.
An individual who qualifies for the reduction is an individual who (1) has 30 or more quarters of coverage, (2) has been married for at least the previous one year period to a worker who has 30 or more quarters of coverage, (3) had been married to a worker who had 30 or more quarters of coverage for a period of at least one year before the death of the worker, (4) is divorced from, after at least 10 years of marriage to, a worker who had 30 or more quarters of coverage at the time the divorce became final, or (5) is divorced from, after at least 10 years of marriage to a worker who subsequently died and who had 30 or more quarters of coverage at the time the divorce became final.
3. In general, what benefits are provided under Part A (Hospital Insurance)?
Part A (Hospital Insurance) provides the following main types of benefits:
(1) Inpatient hospital care for up to 90 days in each “benefit period” (also known as a “spell of illness”). The patient pays a deductible of $1,216 in 2014 for the first 60 days and coinsurance of $304 a day for each additional day up to a maximum of 30 days. In addition, each person has a non-renewable lifetime “reserve” of 60 additional hospital days with coinsurance of $608 a day.
(2) Post-hospital extended care in a skilled nursing facility for up to 100 days in each “benefit period.” The patient pays nothing for the first 20 days in 2014. After 20 days the patient pays coinsurance of $152.00 a day for each additional day up to the maximum of 100 days (including the 20 days at no charge).
(3) The first 100 post-hospital home health service visits following a hospital or skilled nursing facility stay. The services must be made under a plan of treatment established by a physician. There is no charge for home health care visits under Part A, except that there is 20 percent cost-sharing payable by the patient for durable medical equipment (other than the purchase of certain used items). The 100-visit and post-institutional care limits apply only to Medicare beneficiaries enrolled in both Parts A and B.
(4) Hospice care for terminally ill patients.
4. Specifically, what inpatient hospital services are paid for under Part A (Hospital Insurance)?
Subject to a deductible and coinsurance, Medicare Part A (Hospital Insurance) pays for inpatient hospital service for up to 90 days in each “benefit period” (also called a “spell of illness”). Medicare will also pay (except for a coinsurance amount) for 60 additional hospital days over each person’s lifetime (called the “lifetime reserve” days).
Medicare pays for hospital care if the patient meets the following four conditions: (1) a physician prescribes inpatient hospital care for treatment of an illness or injury, (2) the patient requires the kind of care that can be provided only as an inpatient in a hospital, (3) the hospital is participating in Medicare (except in certain emergency situations), and (4) the utilization review committee of the hospital, a Quality Improvement Organization (QIO), or the applicable Medicare Administrative Contractor (MAC) does not disapprove of the stay.
The patient must pay a deductible of $1,216 in 2014 for the first 60 days in each benefit period. If the stay is longer than 60 days during a benefit period, coinsurance of $304 a day must be paid for each additional day up to a maximum of 30 days.
Thus, a 90-day stay in 2014 would cost the patient $10,336. After 90 days, the patient pays the full bill unless the lifetime reserve of 60 days is drawn upon. The patient must pay coinsurance of $608 a day for each of the 60 additional lifetime reserve days.
The coinsurance amounts are based on those in effect when services are furnished, rather than on those in effect at the beginning of the beneficiary’s benefit period.
A “benefit period” is a way of measuring the patient’s use of services under Part A (Hospital Insurance). A new 90-day benefit period starts with each new spell of illness, beginning with the day a patient begins receiving inpatient hospital care. A benefit period ends when the patient has been out of a hospital or other facility primarily providing skilled nursing or rehabilitative services for 60 days in a row (including the day of discharge). After one benefit period has ended, another one will start whenever the patient again receives inpatient hospital care.
There is no limit to the number of 90-day benefit periods a person can have in a lifetime (except in the case of hospitalization in a psychiatric hospital for mental illness), but the lifetime reserve of 60 days is not renewable. Also, special limited benefit periods apply to hospice care.
Example 1. Mr. Smith enters the hospital on February 5. He is discharged on February 15. He has used 10 days of his first benefit period. Mr. Smith is not hospitalized again until August 20. Since more than 60 days have elapsed between his hospital stays, he begins a new benefit period in August. Part A (Hospital Insurance) will again pay for up to 60 days of inpatient hospital coverage, subject to Mr. Smith’s payment of the deductible, and another 30 days subject to Mr. Smith’s payment of coinsurance.
Example 2. Mr. Jones enters the hospital on September 14. He is discharged on September 24. He also has used 10 days of his first benefit period. He is then readmitted to the hospital on October 20. Because fewer than 60 days have elapsed between hospital stays, Mr. Jones remains in the same benefit period and will not be required to pay another hospital deductible when he re-enters the hospital on October 20. This means that the first day of his second admission is counted as the eleventh day of hospital care in that benefit period. Mr. Jones will not begin a new benefit period until he has been out of the hospital (and has not received any skilled care in a skilled nursing facility) for 60 consecutive days.
“Lifetime reserve” days include an extra 60 hospital days a patient can use if the patient has a long illness and needs to stay in the hospital for more than 90 days. A patient has only 60 reserve days in a lifetime. For example, if a patient uses 8 reserve days in that individual’s first hospital stay covered under Medicare Part A, he or she will have only 52 reserve days left to use during subsequent hospital stays, whether or not such stays fall within new benefit periods. A patient can decide when and whether to use lifetime reserve days.
If a patient does not want to use lifetime reserve days, the patient must tell the hospital in writing, either at the time of admission or at any time up to 90 days after discharge. If a patient uses reserve days and then decides that he or she did not want to use them, the patient must request approval from the hospital to have the lifetime reserve days restored. A patient must pay the full hospital costs for any day after the first 90 days in a benefit period if the patient is not using lifetime reserve days to offset the costs after the 90 days. During 2014, Part A (Hospital Insurance) pays for all covered services except $608 a day for each reserve day the patient uses.
Medicare beneficiaries have the right to receive all the hospital care that is necessary for the proper diagnosis and treatment of their illness or injury. Under federal law, a beneficiary’s discharge date must be determined solely by medical needs, not by the diagnosis-related group (DRG) or Medicare payments. Beneficiaries have the right to be fully informed about decisions affecting their Medicare coverage and payment for their hospital stay and for any post-hospital services. They also have the right to request a review by a quality improvement organization (QIO) of any written notice of noncoverage they receive from the hospital stating that Medicare will no longer pay for their hospital care. QIOs are usually groups of physicians who are paid by the federal government to review medical necessity, appropriateness and quality of hospital treatment furnished to Medicare patients.
The following inpatient services are covered by Part A (Hospital Insurance):
- Bed and board in a semi-private room (two to four beds) or a ward (five or more beds). Part A (Hospital Insurance) will pay the cost of a private room only if it is required for medical reasons (e.g., the patient needs isolation for medical reasons or needs immediate hospitalization and no other accommodations are available). If the patient requests a private room, Part A will pay the cost of semi-private accommodations; the patient must pay the extra charge for the private room. The patient or family must be told the amount of this extra charge when a private room is requested. Normally, Medicare patients are assigned to semi-private rooms. Ward assignments are made only under extraordinary circumstances.
- All meals, including special diets.
- Nursing services provided by or under the supervision of licensed nursing personnel (other than the services of a private duty nurse or attendant).
- Services of the hospital’s medical social workers.
- Use of regular hospital equipment, supplies, and appliances, such as oxygen tents, wheel chairs, crutches, casts, surgical dressings, splints, and hospital “admission packs” (toilet articles) when routinely furnished by the hospital to all patients. Certain equipment, supplies and appliances used by the patient in the hospital continue to be covered after the patient has been discharged. Examples include a cardiac pacemaker and an artificial limb.
- Drugs and biologicals ordinarily furnished by the hospital. A limited supply of drugs needed for use outside the hospital is also covered, but only if medically necessary in order to facilitate the patient’s departure from the hospital and the supply is necessary until the patient can obtain a continuing supply. Drugs and biologicals that the hospital obtains for the patient from a private source (community pharmacy) are covered when the hospital is responsible for making payment to the supplier.
- Diagnostic or therapeutic items and services ordinarily furnished by the hospital or by others (including clinical psychologists, as defined by the Centers for Medicare & Medicaid Services), under arrangements made with the hospital.
- Operating and recovery room costs, including hospital costs for anesthesia services.
- Services of interns and residents in training under an approved teaching program.
- Blood transfusions, after the first three pints. Part A (Hospital Insurance) helps pay for blood (whole blood or units of packed red blood cells), blood components, and the cost of blood processing and administration. If the patient receives blood as an inpatient of a hospital or skilled nursing facility, Part A will pay for these blood costs, except for any nonreplacement fees charged for the first three pints of whole blood or units of packed red cells per calendar year. The nonreplacement fee is the amount that some hospitals and skilled nursing facilities charge for blood that is not replaced. The patient is responsible for the nonreplacement fees for the first three pints or units of blood furnished by a hospital or skilled nursing facility. If the patient is charged nonreplacement fees, the patient has the option of either paying the fees or having the blood replaced. If the patient chooses to have the blood replaced, the patient can either replace the blood personally or arrange to have another person or an organization replace it. A hospital or skilled nursing facility cannot charge a patient for any of the first three pints of blood that the patient replaces or arranges to replace. If the patient has already paid for or replaced blood under Part B (Medical Insurance) of Medicare during the calendar year, the patient does not have to meet those costs again under Part A.
- X-rays and other radiology services, including radiation therapy, billed by the hospital.
- Lab tests.
- Respiratory or inhalation therapy.
- Independent clinical laboratory services under arrangement with the hospital.
- Alcohol detoxification and rehabilitation services when furnished as inpatient hospital services. Alcohol detoxification and rehabilitation services may also be covered under Part B (Medical Insurance) when furnished as physician services.
- Dental services when the patient requires hospitalization because of the severity of the dental procedure or because of the patient’s underlying medical condition and clinical status.
- Cost of special care units, such as an intensive care unit, coronary care unit, etc.
- Rehabilitation services, such as physical therapy, occupational therapy, and speech pathology services.
- Appliances (such as pacemakers, colostomy fittings, and artificial limbs) that are permanently installed while the patient is in the hospital.
- Lung and heart-lung transplants.
Part A (Hospital Insurance) does not pay for:
- Services of physicians and surgeons, including the services of pathologists, radiologists, anesthesiologists, and physiatrists. (Part A (Hospital Insurance) also does not pay for the services of a resident physician or intern other than those provided by an intern or resident in training under an approved teaching program.)
- Services of a private duty nurse or attendant, unless the patient’s condition requires such services and the nurse or attendant is a bona fide employee of the hospital.
- Personal convenience (comfort) items supplied at the patient’s request, such as television rental, radio rental, or telephone.
- The first three pints of whole blood (or packed red blood cells) received in a calendar year.
- Supplies, appliances and equipment for use outside the hospital, unless continued use is required (e.g., a pacemaker).
5. Can patients choose their own hospitals?
Except for certain emergency cases, Medicare will make payments only to “qualified” hospitals, skilled nursing facilities, home health agencies, and hospices.
Medicare generally does not pay for hospital or medical services outside the United States. (Puerto Rico, the U.S. Virgin Islands, Guam, American Samoa, and the Northern Mariana Islands are considered part of the United States.)
Medicare will pay for both emergency and nonemergency inpatient hospital care in a foreign hospital if the foreign hospital is closer to, or substantially more accessible than the nearest U.S. hospital (that is adequately equipped and available to handle the patient’s care) to, the patient’s U.S. residence,. Medicare also authorizes payment for emergency care in a Canadian hospital when the emergency occurred in transit between Alaska and another U.S. state without unreasonable delay and by the most direct route. Necessary physicians’ services in connection with Mexican or Canadian hospitalization that qualifies for Medicare coverage are also authorized under Medicare. If a person receives emergency treatment in a Canadian or Mexican hospital or lives near a Canadian or Mexican hospital, he should have the hospital help him contact a Medicare administrative contractor.
6. How is hospice care covered under Part A (Hospital Insurance)?
Under the Part A (Hospital Insurance) hospice benefit, Medicare pays for hospice services every day and also permits a hospice to provide appropriate custodial care, including homemaker services and counseling. Hospice care under Medicare includes both home care and inpatient care, when needed, and a variety of services not otherwise covered under Medicare (such as custodial care).
Medicare payments to a hospice are based on one of four prospectively determined rates for each day in which a qualified Medicare beneficiary is under the care of the hospice. The four rate categories are routine home care, continuous home care, inpatient respite care, and general inpatient care. Payment rates are adjusted to reflect local differences in area wage levels.
Hospice care is covered under Part A (Hospital Insurance) when the beneficiary (1) is eligible for Part A benefits, (2) is certified by a physician as terminally ill (i.e., have a life expectancy of six months or less), and (3) files a statement electing to waive all other Medicare coverage for hospice care from hospice programs other than the one chosen, and elects not to receive other services related to treatment of the terminal condition. (The beneficiary can later revoke the election.)
The following are covered hospice services:
- Nursing care provided by or under the supervision of a registered professional nurse.
- Medical social services provided by a social worker under a physician’s direction.
- Counseling (including dietary counseling) with respect to care of the terminally ill patient and adjustment to the patient’s approaching death.
- Short-term inpatient care (including both respite care and procedures necessary for pain control and acute and chronic symptom management) provided in a participating hospice, hospital, or skilled nursing facility. The respite care may be provided only on an intermittent, nonroutine, and occasional basis and may not be provided consecutively over longer than five days.
- Medical appliances and supplies.
- Services of a home health aide and homemaker services.
- Drugs, including outpatient drugs for pain relief and symptom management.
- Physical therapy, occupational therapy, and speech-language pathology services to control symptoms or to enable the patient to maintain activities of daily living and basic functional skills.
Services of a home health aide, homemaker services, and nursing care provided by or under the supervision of a registered professional nurse, may be provided on a 24-hour, continuous basis only during periods of crisis and only as necessary to maintain the terminally ill patient at home.
The definition of hospice care also includes any other item or service which is specified in the patient’s plan of care and for which Medicare may pay.
A “hospice program” for Medicare purposes is a public agency or private organization that is primarily engaged in providing the care and services listed above and makes the services available (as needed) on a 24-hour basis. A hospice program also provides bereavement counseling for the immediate family of the terminally ill patient. The care and services must be provided in the patient’s home, on an outpatient basis, and on a short-term inpatient basis. The nursing, physician, counseling, and medical social service benefits must be provided directly on a routine basis. The remaining hospice benefits may be provided through arrangements with other hospice programs (provided the agency or organization maintains professional management responsibility for all services).
The Centers for Medicare & Medicaid Services (CMS) may waive certain service requirements for hospices not located in urbanized areas that can demonstrate that they have been unable, despite diligent efforts, to recruit appropriate personnel. For these hospices, CMS may waive the provision requiring physical or occupational therapy or speech-language pathology services and dietary counseling.