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Medicare News
Medicare in 2008 Has Become Costly and Complicated
for Many Senior Citizens
A brief look at the Medicare program and the costs in
2008
 Jan. 21, 2008 - In the beginning Medicare was
pretty simple with few decisions required – no real challenge even for
an aging brain to understand, and a cost too low to worry about. That’s
not the case today. The Medicare program is fraught with complicated
decisions that can be costly, if a senior citizen makes the wrong
choice. Below is a brief explanation of the program and the costs for
2008 prepared by SeniorJournal.com and the Medicare Rights Center.
PART A
Part A (Hospital Insurance) covers most medically
necessary inpatient hospital care, hospice care, and some care
you receive at home or in a skilled nursing facility. If you or your
spouse worked for 10 years or more in the United States, there is no
monthly premium for Part A.
If you or your spouse worked between 7.5 and 10
years, you can buy Part A for a monthly premium of $233; the premium for
people who worked less than 7.5 years is $423 in 2008.
There is a deductible of $1,024 for inpatient
hospital care per benefit period. (A benefit period begins the first day
you enter the hospital and ends when you no longer receive hospital care
for 60 days in a row.)
You will not pay any coinsurance for the first 60
days of inpatient hospital care. There is a $256 daily coinsurance for
days 61 to 90 per benefit period. Each person with Medicare Part A has
an additional 60 days that they can use at any time (lifetime reserve
days), which will cost $512 daily coinsurance in 2008.
There is still no coinsurance requirement for the
first 20 days you stay in a skilled nursing facility, and the daily
coinsurance rate for days 21-100 is $128.
PART B
Part B (Medical Insurance) covers most doctors’
services, laboratory and x-ray services, durable medical equipment (such
as wheelchairs), hospital outpatient services, ambulance services, and
some preventive care and home health care.
Most people pay a Medicare Part B monthly premium,
unless they qualify for government assistance programs (Medicare Saving
Programs) that pay the premium.
Since 2007, if you have very high income, you will
pay more for Part B. (Income is calculated using information from your
most recent tax return and based on modified adjusted gross income.) The
chart below shows the different Part B premiums that will be charged in
2008. These premiums will likely increase from year to year.
|
Individual Annual Income* |
Couple Annual Income* |
2008
Premium |
|
Equal
to or below $82,000 |
Equal
to or below $164,000 |
$96.40 |
|
$82,000-$102,000 |
$164,000-$204,000 |
$122.20 |
|
$102,000-$153,000 |
$204,000-$306,000 |
$160.90 |
|
$153,000-$205,000 |
$306,000-$410,000 |
$199.70 |
|
Above
$205,000 |
Above
$410,000 |
$238.40 |
If you have Medicare Part
B, your Part B deductible (the amount you have to pay before Medicare
will begin to cover services) will be $135 in 2008.
PART C
Part C (Medicare Private Health Plan) is the option
to get your Medicare-covered health care services through a Medicare
private health plan, such as an HMO or PPO. These private health plans
contract with Medicare and are paid a fixed amount to provide Medicare
benefits to their members. You can choose to join a Medicare private
health plan if you have Medicare parts A and B and live in the plan’s
service area.
Medicare private health plans change their costs
every year, so you will need to call your plan to find out how the costs
have changed for 2008.
Medicare private health plans often charge a
premium in addition to the Medicare Part B premium, and they may also
charge a copayment (fixed amount) or coinsurance (percentage) for each
service you receive.
Different plans have different rules for how and
where you can get coverage; be aware that if you do not follow the
plan’s rules carefully—for example, by getting special permission (prior
authorization) when required before you get certain services—your care
may not be covered.
Some plans may provide additional benefits that
Original Medicare does not cover.
PART D
Part D (Outpatient Prescription Drug Insurance)
covers drugs you buy at the pharmacy. There is no Original Medicare
option for Part D - coverage is available only through private plans,
either stand-alone (Part D only) plans or as part of a Medicare private
health plan that includes prescription drug coverage.
Each plan has its own list of covered drugs
(formulary) with different costs. Part D is optional, but if you do not
enroll when you are first eligible, and you do not have other coverage
that is considered to be as good as Medicare drug coverage, you may have
to pay a premium penalty when you do enroll.
You will not, however, have to pay a premium
penalty if you qualify for Extra Help - federal assistance paying for
Part D - and enroll in a plan in 2008, even if you are doing so after
you were first eligible.
Part D plan costs also change every year. You will
generally pay a Medicare Part D monthly premium and a copayment (fixed
amount) or coinsurance (percentage) for each prescription you fill.
| |
Summary of Basic Medicare Premiums for 2008 (By Medicare) |
|
| |
Part A: (Hospital Insurance) Premium
● Most people do not pay a
monthly Part A premium because they or a spouse has 40 or more
quarters of Medicare-covered employment.
● The Part A premium
is $233.00 per month for people having 30-39 quarters of
Medicare-covered employment.
● The Part A premium is
$423.00 per month for people who are not otherwise eligible for
premium-free hospital insurance and have less than 30 quarters
of Medicare-covered employment.
Part B: (Medical Insurance) Premium
$96.40 per month*
Medicare Deductible and Coinsurance Amounts for 2008:
Part A: (pays
for inpatient hospital, skilled nursing facility, and some home
health care) For each benefit period Medicare pays all covered
costs except the Medicare Part A deductible (2008 = $1,024)
during the first 60 days and coinsurance amounts for hospital
stays that last beyond 60 days and no more than 150 days.
For each benefit period you pay:
● A total of $1,024 for a
hospital stay of 1-60 days.
● $256 per day for days 61-90
of a hospital stay.
● $512 per day for days
91-150 of a hospital stay (Lifetime Reserve Days).
● All costs for each day
beyond 150 days
Skilled Nursing Facility Coinsurance
● $128.00 per day for days 21
through 100 each benefit period.
Part B:
(covers Medicare eligible physician services, outpatient
hospital services, certain home health services, durable medical
equipment)
●
$135.00 per year. (Note: You pay 20% of the Medicare-approved
amount for services after you meet the $135.00 deductible.)
Additional information about the Medicare premiums, deductibles,
and coinsurance rates for 2008 is available in the October
1, 2007 Fact Sheet titled, "CMS
Announces Medicare Premiums, Deductibles for 2008" on the www.cms.gov
website.
*Note:
If your income is above $82,000 (single) or $164,000 (married
couple), then your Medicare Part B premium may be higher than
$96.40 per month. For additional details, see our FAQ titled: "Medicare
Part B Monthly Premiums in 2008"
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You can join a drug plan when you are first
eligible for Medicare. In most cases, if you don't join during this
period, your next chance to join will be between November 15th and
December 31st each year, and you will have to pay a penalty. This means
you pay a higher monthly premium for as long as you have Medicare
prescription drug coverage.
Medicare Advantage Plans
Medicare Advantage Plans are health plan options
that are part of the Medicare program. If you join one of these plans,
you generally get all your Medicare-covered health care through that
plan. This coverage can include prescription drug coverage. Medicare
Advantage Plans include:
● Medicare Health Maintenance Organization (HMOs)
● Preferred Provider Organizations (PPO)
● Private Fee-for-Service Plans
● Medicare Special Needs Plans
When you join a Medicare Advantage Plan, you use
the health insurance card that you get from the plan for your health
care. In most of these plans, generally there are extra benefits and
lower copayments than in the Original Medicare Plan. However, you may
have to see doctors that belong to the plan or go to certain hospitals
to get services.
To join a Medicare Advantage Plan, you must have
Medicare Part A and Part B. You will have to pay your monthly Medicare
Part B premium to Medicare. In addition, you might have to pay a monthly
premium to your Medicare Advantage Plan for the extra benefits that they
offer.
If you join a Medicare Advantage Plan, your Medigap
policy won’t work. This means it won’t pay any deductibles, copayments,
or other cost-sharing under your Medicare Health Plan. Therefore, you
may want to drop your Medigap policy (see Medigap below) if you join a
Medicare Advantage Plan.
Medigap (Medicare Supplement Insurance) Policies
These Medigap policies help pay some of the health
care costs that the Original Medicare Plan doesn’t cover. If you are in
the Original Medicare Plan, you could get a Medigap policy to help cover
the extra health care costs.
Medigap policies are health insurance policies sold
by private insurance companies to fill "gaps" in Original Medicare Plan
coverage. In general, with a Medigap policy:
● You get help paying for some of the health
care costs that the Original Medicare Plan doesn’t cover.
● You also get benefits not covered by
Original Medicare, like emergency health care outside the United States.
● You pay a monthly premium to the private
health insurance company that sells you the policy. Medicare and the
Medigap policy both pay their shares of covered health care costs.
These policies are regulated by Medicare and all
plans are identical, regardless of the which private insurance company
issues the insurance. In other words, a Plan F, the most popular, is the
same for all companies.
Editor's Notes: To learn more about the costs and coverage under
Medicare parts A through D, or to find out how to qualify for a Medicare
Savings Program, log on to Medicare Interactive at the Medicare Rights
Center’s website at
www.medicarerights.org/help.html.
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