Page Reviewed / Updated - Mar. 2016
Medicare is a federal health insurance program for the elderly aged over 65. There are 4 parts, referred to as Medicare Part A, B, C & D. Medicare is also known as Title XVIII of the Social Security Act.
1) Medicare Part A pays for inpatient hospital care, some skilled nursing, hospice, and home care (if prescribed). Part A is premium-free for 99% of beneficiaries.
2) Medicare Part B covers outpatient physician and hospital services, some home health services and medical equipment. For most seniors, Part B costs about $121.80 / month in 2016.
3) Medicare Part C allows private companies like HMOs and PPOs to offer health insurance that provide at least the same benefits of Parts A & B, but usually more like dental and vision. To manage costs, they offer a limited choice of providers.
4) Medicare Part D offers prescription drug benefits through private insurance companies at the cost of additional monthly premiums.
Medicare is the primary medical care insurance for a large number of seniors. Many are shocked to discover that Medicare does not cover costs for most types of long term care including Alzheimer's and dementia care. When it does pay, it is only in a very limited capacity. While Medicare is not a long term care solution, there are benefits for seniors with recoverable conditions on a short term basis.
Skilled Nursing Facilities
Medicare will pay for 100% of the cost of care for 20 days at a skilled nursing facility and 80% of the cost for 80 more days. The care must be for recovery following a hospital stay.
Assisted Living Communities
Medicare does not cover any cost of assisted living. It will pay for most medical costs incurred while the senior is in assisted living, but will pay nothing toward custodial care or the room and board cost of assisted living.
In Home Care
Medicare will cover skilled nursing care given in the home for a limited time period, but not non-medical care. Care must be prescribed by a doctor and needed part-time only. The senior must be “confined” meaning they are unable to leave the home without the assistance of another person.
Adult Day Care
Medicare does not pay for adult day care services.
Alzheimer's / Dementia Care
Unfortunately, most care associated with Alzheimer's is considered personal care and therefore not paid for by Medicare. Medical care associated with Alzheimer's is covered. For very late stage Alzheimer's patients, there is a hospice benefit that may be applicable to Medicare beneficiaries. Read more about paying for Alzheimer's care.
Medicare offers hospice coverage for terminally ill individuals whom doctors determine have less than 6 months to live. While Medicare hospice does not typically pay for room and board, it does cover medical expenses, prescription drugs and homemaker services which are typically not paid for by Medicare.
Seniors are eligible for Medicare at age 65. They can receive Medicare at an earlier age only if they are entitled to Social Security disability benefits.
Seniors with any level of financial resources are eligible. Seniors with limited financial resources may be eligible for Medicare Savings Programs.
For 99% of Medicare enrollees, Medicare Part A is a free service. Medicare Part B costs most seniors a standard rate of $121.80 / month in 2016, should their annual income be less than $85,000. For individuals whose Modified Adjusted Gross Income (MAGI) exceeds $85,000 / year, Part B premiums are based on a sliding scale from approximately $170 to $390 / month. There are no fixed rates for Medicare Part C and Part D. The costs depend on the plan in which the individual enrolls.
Seniors are automatically enrolled in Medicare when they start receiving Social Security benefits. Medicare Part A is free for most but Part B has a premium associated with it and therefore seniors will be offered the opportunity to decline Part B. Seniors can postpone Social Security, but still enroll in Medicare when they turn 65, they can do so online, at a local Social Security office or by calling 1-800-772-1213. Enroll in Medicare Online or find your local Social Security Office.