Prepared by Public Affairs 312-751-4777
The Federal Medicare program provides hospital and medical insurance
protection for railroad retirement annuitants and their families, just as it
does for social security beneficiaries. Medicare has the following parts:
- Medicare Part A
(hospital insurance) helps cover inpatient care in hospitals and skilled
nursing facilities (following a hospital stay), some home health care, and
hospice care. Part A is financed through payroll taxes paid by employees
and employers.
- Medicare Part B
(medical insurance) helps cover medically-necessary services like doctors’
services and outpatient care. Part B also helps cover some preventive services.
Part B is financed by premiums paid by participants and by Federal general
revenue funds.
- Medicare Part C
(Medicare Advantage Plans) is another way to get Medicare benefits. It combines
Part A, Part B, and sometimes, Part D (prescription drug) coverage. Medicare
Advantage Plans are managed by private insurance companies approved by Medicare.
- Medicare Part D
(Medicare prescription drug coverage) helps cover prescription drugs.
The following questions and answers provide basic information on Medicare
eligibility and coverage, as well as other information on the Medicare program.
1. Who is eligible for Medicare?
All railroad retirement beneficiaries age 65 or over and other persons who are
directly or potentially eligible for railroad retirement benefits are covered by
the program. Although the age requirements for some unreduced railroad
retirement benefits have risen just like the social security requirements,
beneficiaries are still eligible for Medicare at age 65.
Coverage before age 65 is available for disabled employee annuitants who have
been entitled to monthly benefits based on total disability for at least 24
months. There is no 24-month waiting period for those who have ALS (Amyotrophic
Lateral Sclerosis) also known as Lou Gehrig’s disease.
If entitled to monthly benefits based on an occupational disability,
and the
individual has been granted a disability freeze, he or she is eligible for
Medicare starting with the 30th month after the freeze date or, if later, the
25th month after he or she became entitled to monthly benefits. If receiving
benefits due to occupational disability and the person has not been granted a
disability freeze, he or she is generally eligible for Medicare at age 65. The
standards for a disability freeze determination follow social security law and
are comparable to the medical criteria for granting total disability. Disabled
widow(er)s under age 65, disabled surviving divorced spouses under age 65, and
disabled children may also be eligible.
Medicare coverage before age 65 on the basis of permanent kidney failure is also
available to employee annuitants, employees who have not retired but meet
certain minimum service requirements, spouses, and dependent children who suffer
from permanent kidney failure requiring hemodialysis or a kidney transplant. The
Social Security Administration has jurisdiction of Medicare for those eligible
on the basis of permanent kidney failure. Therefore a social security office
should be contacted for information on coverage for kidney disease.
2. How do persons enroll in Medicare?
If a retired employee or a family member is receiving a railroad retirement
annuity, enrollment for both Medicare Part A and Part B is generally automatic
and coverage begins when the person reaches age 65. For beneficiaries who are
totally and permanently disabled, both Medicare Part A and Part B start
automatically with the 30th month after the beneficiary became disabled or, if
later, the 25th month after the beneficiary became entitled to monthly benefits.
Even though enrollment is automatic, an individual may decline Part B, if so
desired; this does not preclude him or her from applying for Part B at a later
date. Premiums may be higher if enrollment is delayed.
If an individual is eligible for but not receiving an annuity, he or she should
contact the nearest Railroad Retirement Board (RRB) office before attaining age
65 and apply for both Part A and Part B. (This does not mean that the individual
must retire if presently working.) The best time to apply is during the 3 months
before the month in which the individual reaches age 65. He or she will then
have both Part A and Part B protection beginning with the month age 65 is
reached. If the individual does not enroll for Part B in the 3 months before
attaining age 65, he or she can enroll in the month age 65 is reached or during
the next 3 months, but there will be a delay of 1 to 3 months before Part B is
effective. Individuals who do not enroll during this Initial Enrollment Period
may sign up in any General Enrollment Period (January 1 – March 31 each year).
Coverage for such individuals begins July 1 of the year of enrollment.
3. What is covered by Part A (hospital insurance) of the Original Medicare Plan,
the traditional fee-for-service plan available nationwide?
Medicare Part A is designed to help pay the bills when an insured person is
hospitalized. The program also provides payments for required professional
services in a skilled nursing facility (but not for custodial care) following a
hospital stay, some home health care, and hospice care.
There is a limit on how many days of hospital or skilled nursing care Medicare
helps pay for in each “benefit period.” A benefit period begins the day a
patient goes to a hospital or skilled nursing facility. It ends after a person
has not received any hospital or skilled nursing care for 60 days in a row. There
is no limit to the number of benefit periods a person can have.
When a patient receives Part A benefits, he or she is billed by the hospital
only for the deductible amount, any coinsurance amount and any noncovered
services. The remainder of the bill from the hospital, as well as bills for
services in skilled nursing facilities or home health visits, is sent to
Medicare to pay its share.
Benefits are ordinarily paid only for services received in the United States or
Canada. Part A also covers hospital stays in Mexico under very limited
conditions.
4. What are the Medicare Part A deductible and coinsurance charges in 2008?
For the first 60 days in a benefit period, a Medicare patient is responsible for
paying a deductible, which for 2008 is the first $1,024 of all covered inpatient
hospital services. The daily coinsurance charge that a Medicare beneficiary is
responsible for paying for hospital care for the 61st through the 90th day is
$256 in 2008. If a beneficiary uses “lifetime reserve” days, he or she is
responsible for paying $512 a day for each reserve day used in 2008. Lifetime
reserve days are an extra 60 hospital days a beneficiary can use if illness
keeps him or her in the hospital for more than 90 days; a beneficiary has only
60 reserve days during his or her lifetime and the beneficiary decides when to
use them.
In addition, the daily coinsurance charge a beneficiary is responsible for
paying for care in a skilled nursing facility for the 21st through the 100th day
is $128 in 2008.
5. What are some of the services covered by Part B (medical insurance) of the
Original Medicare Plan?
Part B covers physicians’ services, outpatient medical and surgical services,
and many other medical and health services in and out of medical institutions.
More information on specific services is available by calling 1-800-MEDICARE
(1-800-633-4227) or by looking at www.medicare.gov and selecting “Find Out What
Medicare Covers.”
There is an annual deductible for Part B services ($135 in 2008). After the
deductible is paid, Medicare will generally pay 80 percent of the approved
charges for covered services during the rest of the year; the beneficiary is
responsible for paying the remaining 20 percent of the cost.
Claims for Part B benefits filed on behalf of railroad retirement beneficiaries
in the Original Medicare Plan are generally handled by Palmetto GBA on a
nationwide basis. Palmetto GBA is a private company that contracts with the RRB
and Medicare to pay Part B claims for railroad retirement beneficiaries.
Palmetto GBA
Railroad Medicare Part B Office
P.O. Box 10066
Augusta, GA 30999-0001
1-800-833-4455
Part B generally does not pay for services outside the United States. There are
rare emergency cases where Part B can pay for care in Canada or Mexico.
6. What is the Medicare Part B premium in 2008?
The standard premium is $96.40 in 2008. Monthly premiums for some beneficiaries
are greater, depending on a beneficiary’s or married couple’s modified adjusted
gross income. The income-related Part B premiums for 2008 are $122.20, $160.90,
$199.70, or $238.40, depending on the extent to which an individual
beneficiary’s income exceeds $82,000 (or a married couple’s income exceeds
$164,000), with the highest premium rates only paid by beneficiaries whose
incomes are over $205,000 (or $410,000 for a married couple). The income
thresholds increase annually by indexing to the Consumer Price Index. Some
individuals also pay premium surcharges because they enrolled late for Part B.
7. How much can Medicare Part B premiums increase for delayed enrollment?
Premiums for Part B are increased 10 percent for each 12-month period the
individual could have been, but was not, enrolled. However, individuals age 65
or older who wait to enroll in Part B because they have group health plan
coverage based on their own or their spouse’s current employment may not have to
pay higher premiums because they may be eligible for special enrollment periods.
The same special enrollment period rules apply to disabled individuals, except
that the group health insurance may be based on the current employment of the
individual, his or her spouse, or a family member.
Individuals deciding when to enroll in Medicare Part B must consider how this
will affect eligibility for health insurance policies which supplement Medicare
coverage. These include “Medigap” insurance and prescription drug coverage and
are explained in the answers to questions 8 through 11.
8. What is Medigap insurance?
Many private insurance companies sell insurance to help pay for services not
covered by the Original Medicare Plan. This kind of insurance is called
“Medigap” for short. Policies may cover deductibles, coinsurance, copayments,
health care outside the United States and more. Generally, individuals need
Medicare Part A and Part B to enroll. A monthly premium is charged.
When someone first enrolls in Medicare Part B at age 65 or older, he or she has
a 6-month “Medigap open enrollment period.” During that time, the individual has
a right to buy the Medigap policy of his or her choice regardless of any health
problems. The company cannot refuse a policy or charge the individual more than
all other open enrollment applicants. If an individual does not buy a policy
when first eligible, the cost may go up or the desired policy may not be
available.
More detailed information about Medigap policies is available in the publication
Choosing a Medigap Policy:
A Guide to Health Insurance for People with Medicare,
available by calling the Medicare toll-free number 1-800-633-4227 or going to www.medicare.gov and clicking on “Find a Medicare Publication.”
9. Do Medicare beneficiaries have choices available for receiving health care
services?
Yes. Under the Original Medicare Plan, a beneficiary can see any doctor or
provider who accepts Medicare and is accepting new Medicare patients. Or a
beneficiary can choose a Medicare Advantage Plan (Part C). In limited instances,
other Medicare Health Plans may be available. To find out which plans are
available in an area, beneficiaries should go to www.medicare.gov and select
“Search Tools” at the top of the page and then “Compare Health Plans and Medigap
Policies in Your Area.” Or, they can call 1-800-633-4227.
10. What is Medicare Advantage?
Medicare Advantage Plans combine Medicare Part A and Part B coverage, and are
available in most areas of the country. A beneficiary must have both Medicare
Part A and Part B to join a Medicare Advantage Plan, and the individual must
live in the plan’s service area. Medicare Advantage Plan choices include
regional preferred provider organizations (PPOs), health maintenance
organizations (HMO’s), private fee-for-service plans and others. A PPO is a plan
under which a beneficiary uses doctors, hospitals, and providers belonging to a
network; beneficiaries can use doctors, hospitals, and providers outside the
network for an additional cost. Under a Medicare Advantage Plan, a beneficiary
may pay lower copayments and receive extra benefits. Most plans also include
Medicare prescription drug coverage (Part D).
For those in a Medicare Advantage Plan, information on out-of-pocket cost is
available by calling 1-800-633-4227 or by going to
www.medicare.gov, selecting “Search Tools”
and then “Compare Health Plans and Medigap Policies in Your Area.”
11. How do Medicare prescription drug plans work?
Medicare offers voluntary insurance coverage for prescription drugs through
Medicare prescription drug plans and other health plan options.
Medicare contracts with private companies to offer beneficiaries prescription
drug coverage. These companies offer a variety of options, with different
covered prescriptions, and different costs. Beneficiaries pay a monthly premium,
a yearly deductible and part of the cost of prescriptions. Those with limited
income and resources may qualify for help in paying some prescription drug
costs.
Medicare prescription drug plans are voluntary. To enroll, individuals must have
Medicare Part A and/or Part B. Beneficiaries can join during the period that
starts 3 months before Medicare coverage starts and ends 3 months after the
first month of Medicare coverage. There may be a higher premium if an individual
doesn’t join a Medicare drug plan when first eligible, and he or she does not
have other prescription drug coverage that, on average, covers at least as much
as standard Medicare prescription drug coverage. In most cases, there is no
automatic enrollment to get a Medicare prescription drug plan. Individuals
enrolled in Medicare Advantage Plans will generally get their prescription drug
coverage through their plan.
More information about Medicare prescription drug plans is available in the
publication Your Guide to Medicare Drug Coverage. The
Medicare and You handbook
lists the Medicare prescription drug plans available in a beneficiary’s area.
Free personalized information is available online or by calling the Medicare
toll-free number. Free personalized counseling is also available from the local
State Health Insurance Assistance Program (SHIP) and other local and
community-based organizations.
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