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Patricia Johnson: Medicare Rising

Medicare Rising


By Patricia Johnson

How much do you really know about Medicare? Most people assume that at age 65 they are automatically covered by Medicare Part A [Hospital] and if they want Medicare Part B [Doctor] coverage they pay a small premium each month.

While it is true that most of the 41.7 million Medicare beneficiaries do not pay a premium for Part A benefits those that do, pay a huge price. Part A benefits are free to those 65 years of age, or disabled, if they, or a spouse, have met the requirement of 40 quarters of Medicare-covered employment. Seniors, and certain disabled persons under age 65, may obtain Part A benefits by paying the following premiums:

  • If the individual has fewer than 30 quarters of coverage the amount paid for Part A coverage is $343.00/per month.
  • If the individual is a senior with 30-39 quarters of Medicare-covered employment, or if the individual is disabled with 30 or more quarters of Medicare-covered employment, they pay a reduced premium of $189.00/per month.
  • In addition to the Part A premium, you also have various Part A deductibles based on the number of days that you are hospitalized, in each benefit period, plus skilled nursing coinsurance, if required.

    Let’s say that you’re hospitalized on June 15, for six days, and then you’re hospitalized again on September 25, for 63 days. Your Part A deductible for these two hospitalizations will total $2,409.00, $876.00 for the first hospitalization, $876.00 for the second hospitalization, plus $219.00 per day for days 61, 62 and 63 of the second hospitalization.

    Each month you’re already paying $66.60 for Part B coverage and once you’ve met your yearly $100.00 deductible, you are only required to pay 20% of the Medicare approved amount. What does that mean? Let’s say you go to a doctor who charges $120.00 for an office visit. You assume that since you’ve already met your $100 deductible, your portion of the bill will be $24.00 [20% of 120.00]. Medicare doesn’t always allow the full amount of the bill, so if you have a billed amount of $120.00 and Medicare only approves $85.00 for this service, your final outlay is higher. You may reduce your out-of-pocket expenses by utilizing ‘participating’ physicians. A directory of these physicians is located at www.medicare.gov

    In January of 2004 a 2.1% cost of living adjustment [COLA] was provided to Social Security recipients, yet the cost of Part B premiums alone increased 13.5%, with substantial increases in all other categories. When this administration took office in 2001 the Medicare Part B premium was $50.00, while the initial Part A deductible was $792.00. In a three-year period of time this administration has increased the initial out-of-pocket expense for Medicare recipients by over $100.00, in those two deductibles. Considering the average Social Security check [2002] is only $895.00, that’s quite an increase.

    On December 8, 2003, President Bush signed the Medicare Prescription Drug, Improvement and Modernization Act of 2003 which went into effect in June 2004. Can the elderly and disabled in this country really afford improvements and modernization plans put into place by this Administration?

    While raising the amount of out-of-pocket expenses that our elderly, disabled and poor have to pay for medical coverage, this administration is still pursuing permanent tax cuts for the wealthiest of our citizens. Where is the logic?

    MEDICARE RATES

    2004

    2003

    2003-2004

    Increase in Dollars

    2003-2004

    Percent Increase

    Part A: (Hospital Insurance) Premium (pays for inpatient hospital, skilled nursing facility, and some home health care). The premium is based on the number of Medicare-covered quarters of employment with coverage available to those 65 years of age and older, and certain disabled persons.





    • You, or your spouse, have 40 or more quarters of Medicare-covered employment.*

    Free




    • 30-39 quarters of Medicare-covered employment.*

    189.00/month

    174.00/month

    15.00/month

    8.6%

    • Less than 30 quarters of Medicare-covered employment.*

    343.00/month

    316.00/month

    27.00/month

    8.6%

    PART A DEDUCTIBLE AND COINSURANCE FOR EACH BENEFIT PERIOD**

    Varies




    DAYS 1- 60

    876.00

    840.00

    36.00

    4.3%

    DAYS 61- 90

    219.00/day

    210.00/day

    9.00/day

    4.3%

    DAYS 91-150 (LIFETIME RESERVE DAYS)

    438.00/day

    420.00/day

    18.00/day

    4.3%

    DAYS 151 and beyond

    You pay all costs




    SKILLED NURSING FACILITY COINSURANCE (for days 21 through 100

    109.50/day

    105.00/day

    4.50/day

    4.3%

    Part B: (Medical Insurance) Premium Part B: (covers Medicare eligible physician services, outpatient hospital services, certain home health services, durable medical equipment).

    66.60/month

    58.70/month

    7.90/month

    13.5%

    Surcharge – If you didn’t sign up for Medicare Part B when you first became eligible, the cost will go up 10% for each 12-month period that you could have had Medicare Part B, but didn’t take it.

    10%




    PART B DEDUCTIBLE AND COINSURANCE FOR EACH BENEFIT PERIOD**

    100.00/year

    100.00/year

    .00/year

    0%

    20% of the Medicare approved amount for services

    Varies




    * Medicare-covered employment is quarters paid into the paid into the social security system. In 2001, 388,000 beneficiaries were required to pay Part A premiums to receive hospital coverage.

    ** A benefit period begins the day you go to a hospital or skilled nursing facility. The benefit period ends when you haven't received hospital or skilled nursing care for 60 days in a row. If you go into the hospital after one benefit period has ended, a new benefit period begins. You must pay the inpatient hospital deductible for each benefit period.

    © 2004 Patricia L Johnson

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