Over the course of our careers, we have met with numerous clients who are approaching the golden age of Medicare – age 65. Unfortunately, you do not get a phone call from the government explaining in detail what steps you need to take/what you need to do – you are on your own. My goal in this three part article is to explain to you Medicare on a high level so you can understand exactly what you need to do – the last thing you want is to make a mistake on the very first decision of retirement! In this article, we will discuss Medicare on a high level, including what services/products its main components provide for (Part A & Part B). In Part 2 of this article (next month) we will also explain the financial component – what you will be out of pocket (and, unfortunately, that figure may be increasing soon). Last, in Part 3 (September), we will review the gaps in Medicare coverage, and how you should close those gaps in order to get the best care.
Medicare Alphabet Soup
On a high level, Medicare was the federally funded program put in place in 1965 in order to cover healthcare costs for retirees; the government found in their research that over half of Americans had no health insurance after retiring from their employers. It has changed over the years with the political winds, but it has been an incredibly important part of making sure that Americans have the necessary medical coverage in retirement. Below, we discuss each parts of Medicare, including their requirements and the benefits covered.
Part A: Medicare Part A represents the “free” coverage of skilled in-house care (up to an extent). This includes inpatient hospital care, skilled nursing care, home healthcare and hospice care.
- Inpatient Hospital Care includes any hospital stays, including a semi-private room, meals, general nursing, medications, and any hospital services/supplies (unrelated to doctor services, which we will get to in a minute). Medicare covers 90 days each benefit period, plus 60 lifetime reserve days in a general hospital (and also 190 lifetime days for psychiatric inpatient care).
- As the name suggests, the main qualification is that you must be considered an inpatient within the hospital where you are staying. Part A thus requires that you are formally admitted in the hospital – if you are considered outpatient or observation, Part A may not cover you.
- Skilled Facility Nursing Care includes any skilled nursing services (services from a registered nurse, which includes providing medication, tube feedings/catheter changing, wound care, observation/assessment of a patient’s condition, and management/evaluation of a patient’s plan of care) and certain physical/occupational therapy within a facility.
- In order to qualify, you must have been admitted in a hospital (not simply held under observation) for 3 consecutive days in the 30 days prior to admission, and require skilled nursing services 7 days a week as certified by a doctor. If you qualify, Medicare will cover all of/a portion of your care depending on how long you need care, up to a maximum of 100 days for each “benefit period.”
- Home Healthcare is just as it sounds – care in the home. This care includes most of the covered services under Skilled Nursing Care above, except such care is in the home. This includes part time/intermittent nursing care by a registered nurse or home health aide, therapy (physical/occupational/speech), medical social services, and durable medical equipment/supplies (for example, a respirator).
- In order to qualify, you must a) be considered “homebound,” i.e. you need the help of special equipment/others to leave your home, b) you need skilled nursing care (similar to the last bullet), c) a doctor certifies that you are homebound/a plan of care has been developed, and d) you receive care from a Medicare certified home health agency. Finally, such care must be intermittent – 24 hour care is not covered (intermittent is considered care that’s needed or given on fewer than 7 days each week or less than 8 hours each day over a period of 21 days). Also note that Medicare does not cover nonmedical care (help with eating, dressing, walking, meal prep, housekeeping, etc.).
- Hospice Care includes end of life/palliative/pain management care. This type of Medicare coverage is quite expansive – most services/equipment are covered. The main items Medicare will not cover are any types of care with the intention to cure the illness (since this is considered end of life care), and the room/board if such care is not in the home.
- In order to qualify for hospice care, you must meet the following parameters: a) a hospice medical director must certify that you have a terminal illness, b) you (or if you cannot your agent) must sign a document which states that you are seeking end of life/pain management care c) your terminal condition is documented, and d) you receive care from a Medicare certified hospice agency. If you are covered, you will receive two 90 day hospice period benefits, followed by an unlimited amount of 60 day benefits.
Part B: While Part A focuses on the facility/nursing expenses, Part B, for a premium, focuses on physician healthcare services. There are two main types of services – treatment that is considered medically necessary in order to treat illness, and preventative services in place in order to keep you healthy.
- Medically Necessary: This includes several services, including (in alphabetical order):
- Ambulatory Services: covers ground ambulance transportation when you a) need to be transported to a hospital/ nursing facility for medically necessary services, and b) transportation in any other vehicle could endanger your health. You can even get coverage for non-emergency ambulatory services if you have a note from a Doctor.
- Blood: If you need blood from a blood bank, Medicare will cover some/all of such blood.
- Chemotherapy: will cover such therapy in a doctor’s office, clinic or outpatient office (note that if you are inpatient, this is covered by Part A).
- Chiropractic Services: covers manipulation of the spine when provided by a chiropractor/other qualified provider.
- Diabetes Services: covers blood sugar testing monitors, blood sugar test strips, lancet devices and lancets, blood sugar control solutions, and therapeutic shoes (in some cases). Medicare only covers insulin if it’s medically necessary and you use an external insulin pump to administer the insulin.
- Doctor Services: Covers medically necessary doctor services, both inpatient and outpatient, as well as services by other providers (physician assistants, nurse practitioners, social workers, physical therapists, and psychologists. You can even receive home health services if you are considered homebound.
- Durable Medical Equipment: Covers items like oxygen equipment and supplies, wheelchairs, walkers, and hospital beds ordered by a doctor or other health care provider enrolled in Medicare for use in the home. Very important to make sure they are enrolled in Medicare in order to get the necessary coverage.
- Emergency Services: These services are covered when you have an injury, a sudden illness, or an illness that quickly gets much worse.
- Eyeglasses: Medicare covers one pair of eyeglasses with standard frames (or one set of contact lenses) after cataract surgery that implants an intraocular lens.
- Sleep Apnea Therapy: covers 3 month trial with a CPAP if you have been diagnosed with Sleep Apnea – may continue coverage if a doctor determines it is helping.
- Kidney Dialysis: Covers 3 treatments per week if you have end stage renal disease. This includes all ESRD-related drugs and biologicals, laboratory tests, home dialysis training, support services, equipment, and supplies. Medicare will also provide you with 6 sessions of kidney disease education if you have Stage IV Chronic Kidney Disease.
- Laboratory Services: covers laboratory services including certain blood tests, urinalysis, certain tests on tissue specimens, and some screening tests.
- Mental Healthcare: covers mental health care services to help with conditions like depression or anxiety. Coverage includes services generally provided in an outpatient setting (like a doctor’s or other health care provider’s office or hospital outpatient department), including visits with a psychiatrist or other doctor, clinical psychologist, nurse practitioner, physician assistant, clinical nurse specialist, or clinical social worker.
- Occupational Therapy: covers evaluation and treatment to help you perform activities of daily living (like dressing or bathing) when your doctor or other health care provider certifies you need it.
- Physical Therapy: covers evaluation and treatment for injuries and diseases that change your ability to function when your doctor or other health care provider certifies your need for it.
- Prescription Drugs (limited): Covers a limited number of drugs like injections you get in a doctor’s office, certain oral anti-cancer drugs, drugs used with some types of durable medical equipment (like a nebulizer or external infusion pump), immunosuppressant drugs.
- Prosthetic/Orthotic Items: covers arm, leg, back, and neck braces; artificial eyes; artificial limbs (and their replacement parts); some types of breast prostheses (after mastectomy); and prosthetic devices needed to replace an internal body part or function when ordered by a doctor.
- Speech Pathology: covers evaluation and treatment to regain and strengthen speech and language skills, including cognitive and swallowing skills, when your doctor or other health care provider certifies you need it.
- Surgical Dressing Services: covers medically necessary treatment of a surgical or surgically treated wound.
- Other Tests: covers X-rays, MRIs, CT scans, EKG/ECGs, and some other diagnostic tests.
- Transplants: Medicare covers doctor services for heart, lung, kidney, pancreas, intestine, and liver transplants under certain conditions and only in Medicare-certified facilities. Medicare covers bone marrow and cornea transplants under certain conditions.
- Urgent Care: covers urgently needed care to treat a sudden illness or injury that isn’t a medical emergency.
- Preventative Services: This include several services, including (in alphabetical order):
- Abdominal Aortic Aneurysm Screenings: One time screening if you are considered at risk (which means you have family history of such issues, or if you are a man between 65-75 and smoked at least 100 cigarettes in your lifetime)
- Alcohol Misuse/Counseling: One alcohol misuse screening per year if you use alcohol but are not considered dependent. If you are considered dependent (doctor determines you are misusing alcohol), you can get 4 sessions. Such sessions must be in a primary care setting (like a doctor’s office).
- Breast Cancer Screening: Covers mammograms once every 12 months if you are 40 or older (and a single mammogram if you are between 35-39).
- Cardiac Rehab: Covers exercise, education, and counseling if you either a) had a heart attack in the last 12 months, b) had coronary bypass surgery, c) have angina, d) had a heart valve repair/replacement, d) had coronary angioplasty/stenting or e) had a heart/lung transplant.
- Cardiovascular Disease Behavioral Therapy: Covers one visit per year to a primary care doctor in a primary care setting to help lower your risk for such disease. This includes checking your blood pressure, discuss aspirin use, and provide tips for lowering your risk of such disease. They will also cover blood testing once every 5 years for checking your cholesterol/triglyceride levels.
- Cancer Screenings: covers screenings for precancerous growths or find cancer early, including DNA testing, fecal testing, blood testing, colonoscopy screening, etc.
- Depression Screening: Covers one screening per year in a primary care facility (doctor’s office) that can provide follow up treatment/referrals.
- Diabetes Screening: Covers screening if a doctor determines you are at risk for diabetes, with eligibility of 2 screenings per year. Will also cover outpatient self-management training to help you cope with diabetes.
- EKG/ECG Screening: Covers a one time screening if referred by a doctor/healthcare provider as part of your one-time “Welcome to Medicare” preventive visit.
- Flu/Pneumonia Shots: Covers one per flu season and two annual pneumonia shots.
- Glaucoma Testing: Covers one test per 12 months for those who have a high risk for Glaucoma (high risk if you have diabetes, family history of glaucoma, etc.)
- Hepatitis B/C Testing: Covers both B and C testing if you are considered high risk. You are high risk for HepB if you have hemophilia, End Stage Renal Disease, diabetes, or you live with someone/work with someone who has HepB. You are High Risk for HepC if you have a history with illicit injection drug use, had a blood transfusion before ’92, or if you were born between 1945-65.
- HIV Screening: one screen per 12 months for those between 15-65 and those who are considered high risk.
- Obesity Screening: Covers face-to-face behavioral therapy to help you lose weight if you have a BMI index of 30 or more if it is done in a primary care setting (doctor’s office).
- Prostate Cancer Screenings: Covers a PSA test and digital rectal exam once per year for men over 50.
- Pulmonary Rehab: covers a comprehensive pulmonary rehabilitation program if you have moderate to very severe chronic obstructive pulmonary disease (COPD) and have a referral from the doctor treating this chronic respiratory disease.
- Sexually Transmitted Infection/Counseling: Covers STI screenings s for chlamydia, gonorrhea, syphilis, and Hepatitis B. These screenings are covered for people who are pregnant and for certain people who are at increased risk for an STI when the tests are ordered by a primary care doctor or other primary care practitioner.
- Smoking and Tobacco Cessation: covers up to 8 face-to-face visits in a 12-month period.
Karen DeRose and Anthony DeRose are registered representatives of Lincoln Financial Advisors.
Securities and advisory services offered through Lincoln Financial Advisors Corp., a broker/dealer (Member SIPC) and registered investment advisor. Insurance offered through Lincoln affiliates and other fine companies. DeRose Financial Planning Group is not an affiliate of Lincoln Financial Advisors.