Medicare Part A and B - Traditional Medicare

Medicare Parts A and B, which are also known as Traditional Medicare is provided to most Social Security recipients at no cost because they or their spouses paid Medicare taxes while they worked. If the beneficiary or spouse didn’t pay enough to be fully vested into the system, SSA will calculate the premium, which will be withheld from his Social Security check every month. The amount varies according to the number of quarters the person paid, with the current (2011) maximum premium amount set at about $450.00 per month. Medicare Part A pays for hospitalization, hospice care, home health care, rehabilitation, and skilled nursing in an inpatient rehabilitation center or nursing home.

When using the Medicare Part A hospitalization benefit, there is a co-payment that can either be paid out of pocket or can be paid by a Medicare supplemental policy, also known as a Medigap policy. Under Medicare Part A, the senior’s shares of cost (also known as out-of-pocket costs, or deductibles) for hospitalization in 2012 are as follows:

Days 1-60 $1,156.00 Total Days 61-90 $289.00 per day Days 91-150 $578.00* per day Days 150 – ongoing All Costs Skilled Nursing First 20 days No Cost to Senior Skilled Nursing days 21-100 $144.50

*Medicare also covers an additional 60 days after the 150 days have been used – but they can only be used one time in a patient’s lifetime. These are called “lifetime” days.. Medicare Part A allows a senior to go to any hospital or provider that accepts Medicare, no matter where the facility is located – Traditional Medicare doesn’t require in-plan providers. When considering the costs of hospitalization, it’s important to remember that ancillary costs such as x-rays, laboratory fees, and physician charges are not covered under Medicare Part A – they will be covered under Medicare Part B, with different copayments and deductibles. The hospital billing may include parts A&B items, or they might be billed separately.

Under Medicare guidelines, a senior who has been discharged from an acute hospital following a qualifying three-day admission (over three midnights) within the past 30 days can enter a SNF using the Part A benefit. He will receive skilled nursing services, physical, occupational and speech therapies at a higher level than can be provided in the home as he works toward recovery.

Medicare will pay the charges in full for the first 20 days in the nursing home, and as the senior continues to progress toward recovery Medicare will pay a portion of the charges for the next 80 days. The 2012 co-payment amount is $144.50 per day. Please note that some medigap policies cover some or all of the cost of the co-payments to the facility. The nursing home will have verified the amount that a medigap policy pays before the senior is admitted for therapies, and will have notified the senior and/or family about required co-payments before they are required to pay. Most SNFs accept assignment and bill the Medicare approved amounts in order to remain competitive with other local providers.

If a senior is receiving services in a SNF under the Medicare Part A Benefit, the payment will continue up to a total of 100 days as long as the senior is progressing or healing. A senior is considered to have a custodial need when he plateaus and isn’t likely to progress further - at that point Medicare will no longer pay for the senior’s room and board in the nursing home. Unless the senior has another skilled need such as wound care, IV’s, etc, Medicare will not pay for the senior to stay in the nursing home even if he isn’t ready to go home. Once the 100 day benefit has been depleted, Medicare will no longer pay whether or not the senior is ready to return home. The resident will either have to return home or pay privately to remain in the nursing home.

Sometimes a senior is admitted into a nursing home for custodial care because he can’t live alone. This type of care provides 24-hour care to meet the client’s basic needs, such as bathing, medication management, transferring assistance, meal preparation and/or assistance with eating. Medicare does not pay for custodial care, whether or not the senior was recently discharged from the hospital. This type of care requires a long-term payment source, such as Medicaid, Long-Term Care Insurance, paying privately, or some other type of payment source .

Hospice & Home Healthcare Medicare Part A pays for the senior to receive home healthcare and hospice at virtually no cost to them. Hospice is a type of care designed to make people who have been diagnosed with a terminal condition comfortable at the end of their life. Hospices can charge a co-payment for medications and inpatient respite care, but most don’t charge the seniors for these services in order to remain competitive with other hospice providers in the community. Home healthcare is provided with no co-payment to the senior, it is designed to rehabilitate the senior back to his former level of functioning and to ensure his safety in the home by providing skilled nursing services, physical therapy, occupational therapy, and speech therapies. Home healthcare is provided in the home on a short-term basis.

Durable Medical Equipment (DME)

Medicare Part A pays for necessary equipment that enables seniors to function at home. Not all medical equipment is covered however – and Medicare requires a doctor’s order and proof of a medical need before much of the equipment is delivered to the senior. Types of DME include front wheeled walkers, four wheeled walkers (with brakes & a seat), wheelchairs, hospital beds, bedside commodes, oxygen concentrators, and certain types of specialty equipment. Scooters and motorized wheelchairs are also covered, although they require additional paperwork from the doctor and a physical therapist.

Medicare Part B works in concert with Part A – it covers the rest of the medical bills that Medicare Part A doesn’t.  For most seniors, the Part B premium of $99.90 is automatically deducted from the senior’s Social Security payment before it’s directly deposited into the beneficiary’s account.  Even though Part B is a voluntary plan, those beneficiaries who have coverage through TRICARE (military benefits), or Railroad Retirement benefits are usually required to pay for Medicare Part B.  Although Part B isn’t a requirement for most recipients, it really doesn’t make sense not to sign up – Part B pays for many services that would otherwise be out-of-pocket. 

The Medicare Part B premium amount is graduated for seniors in higher income brackets: 

As mentioned above, Medicare Part B pays for much of the medical care that PartA doesn’t cover, including visits to the doctor’s office, durable medical equipment (DME) outpatient surgeries, transportation by ambulance, tests, prosthetic devices, etc. The only time that prescription medications are provided under Part B is when they are administered to the senior in the hospital or skilled nursing facility. There are co-payments and/or annual deductibles for everything except preventive medical care. (re: your comment – it’s explained in the paragraph).

Medicare Part A and B do not pay for healthcare-related items such as eyeglasses, hearing aids, and dental care. These items must be paid out of the senior’s pocket, might be covered by Medigap or Advantage Plans, or might possibly be covered under state Medicaid plans. Each state has the option of providing these items to their Medicaid seniors, but many don’t.