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 and have a disability insured status under social security law. 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.)
Under certain conditions, spouses, divorced spouses, surviving divorced spouses,
widow(er)s, or a dependent parent may be eligible for Medicare hospital
insurance based on an employee’s work record when the spouse, etc., turns age
65. Also, disabled widow(er)s under age 65, disabled surviving divorced spouses
under age 65, and disabled children may be eligible for Medicare, usually after
a
24-month waiting period.
Medicare coverage at any age 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. (See question #7 for more
information on delayed enrollment.)
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 2011?
For the first 60 days in a benefit period, a Medicare patient is responsible for
paying a deductible which, for 2011, is the first $1,132 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 $283 in 2011. If a beneficiary uses “lifetime reserve” days, he or
she is responsible for paying $566 a day for each reserve day used in 2011.
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 $141.50 in 2011.
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 visiting www.medicare.gov.
There is an annual deductible for Part B services ($162 in 2011). 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
www.palmettogba.com/medicare
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 2011?
The standard premium is $115.40 in 2011. However, most Medicare beneficiaries
did not see an increase in their monthly Part B premiums because of a
“hold-harmless” provision in current law. Monthly premiums for beneficiaries
protected by this provision continue to be $96.40 or $110.50, the same monthly
amount that they paid in 2010.
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 2011 ($115.40 plus a monthly adjustment
amount) are $161.50, $230.70, $299.90, or $369.10, depending on the extent to
which an individual beneficiary’s income exceeds $85,000 (or a married couple’s
income exceeds $170,000), with the highest premium rates only paid by
beneficiaries whose incomes are over $214,000 (or $428,000 for a married
couple). 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 can be found 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 at www.medicare.gov.
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 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 (HMOs), 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.
11. How do Medicare prescription drug plans work?
Medicare offers voluntary insurance coverage for prescription drugs (Part D)
through Medicare prescription drug plans and other health plan options.
Medicare contracts with private companies to offer beneficiaries prescription
drug coverage through a variety of options, with different covered prescriptions
and different costs. Beneficiaries pay a monthly premium (averaging about $32 in
2011), a yearly deductible (up to $310 in 2011) and part of the cost of
prescriptions. Those with limited income and resources may qualify for help in
paying some prescription drug costs.
Beginning in 2011, the Affordable Care Act requires some Part D beneficiaries to
also pay a monthly adjustment amount, depending on a beneficiary’s or married
couple’s modified adjusted gross income. The Part D income-related monthly
adjustment amounts are $12.00, $31.10, $50.10, or $69.10, depending on the
extent to which an individual beneficiary’s modified adjusted gross income
exceeds $85,000 (or a married couple’s income exceeds $170,000), with the
highest amounts only paid by beneficiaries whose incomes are over $214,000 (or
$428,000 for a married couple).
To enroll, individuals must have Medicare Part A or Part B. (They are also
required to live in the prescription drug benefit plan’s service area.)
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, as well as free
personalized information, is available online at www.medicare.gov, or by calling
the Medicare toll-free number, 1-800-633-4227. In addition, free personalized
counseling is available from the local State Health Insurance Assistance Program
(SHIP) and other local and community-based organizations.
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