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, also referred to as Hospital Insurance, pays for inpatient hospital care, some skilled nursing, hospice, and home health care (if prescribed). Part A is premium-free for 99% of beneficiaries, due to paying Medicare taxes while employed.
2) Medicare Part B, also referred to as Medical Insurance, covers outpatient physician and hospital services, some home health services, and durable medical equipment. For most seniors, Part B costs about $135.50 / month in 2019.
3) Medicare Part C, also referred to as Medicare Advantage (MA) Plans, allows private companies like HMOs and PPOs to offer health insurance that provide at least the same benefits of Parts A & B, but usually additional benefits, such as dental and vision. In addition, some MA plans now offer long-term home and community based services, like adult day care, in-home personal care assistance, and respite care, under certain conditions. (Learn more here). Most MA plans also offer cover prescription drugs. To manage costs, they offer a limited choice of providers.
4) Medicare Part D, Medicare’s Prescription Drug plan, offers prescription drug benefits through private insurance companies at the cost of additional monthly premiums. As of 2019, monthly premiums range between $12 and $100.
Medicare is the primary medical care insurance for a large number of seniors. Many are shocked to discover that Original Medicare (Medicare Part A & Part B), also called Traditional 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 Traditional Medicare is not a long term care solution, there are benefits for seniors with recoverable conditions on a short term basis. Also, as mentioned previously, some Medicare Advantage Plans (Medicare Part C) now offer some home and community based long term care benefits under specific circumstances.
Skilled Nursing Facilities
Medicare will pay for 100% of the cost of care up to 20 days at a skilled nursing facility and approximately 80% of the cost up to 80 more days. The care must be for recovery following an inpatient 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 (personal care) or the room and board cost of assisted living. Some Medicare Advantage plans may pay for personal care assistance for persons residing in assisted living or memory care, but will not contribute towards the cost of room and board.
In Home Care
Medicare will cover skilled nursing care 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. This is formally referred to as “homebound“. However, non-medical, in-home personal care assistance may be available through some Medicare Advantage plans.
Adult Day Care
Original Medicare does not pay for adult day care services, but some Medicare Advantage plans may cover the cost.
Alzheimer’s / Dementia Care
Unfortunately, most care associated with Alzheimer’s is considered personal care, and therefore, not paid for by Medicare. That said, some Medicare Advantage plans may cover the cost of personal care assistance. Medical care associated with Alzheimer’s is covered by Original Medicare and Medicare Advantage. 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. Although in most cases hospice care is given in-home, it’s possible for one to opt for inpatient care.
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 $135.50 / month in 2019, 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 $189.60 to $460.50 / 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. 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.