Medicare and Medicare Resources

Medicare is a federal government health insurance program that covers some 41.7 million people age 65 and over and those under 65 with specific disabilities or permanent kidney failure (end-stage renal disease). It does not pay for all medical expenses but, rather, provides a fixed amount of coverage (adjusted annually for inflation) that can be supplemented with other plans, called Medigap policies, that are designed to wrap around it. In other words, it is a base to build upon.

Medicare coverage consists of several distinct components:

1. Part A (hospital insurance) covers hospital services such as bed and board, nursing services, drugs and injections (while hospitalized), equipment and medical supplies, inpatient physical therapy, skilled nursing care and hospice services. Eligibility conditions and annually adjusted deductibles and co-payments apply. Part A coverage is premium-free for most Medicare beneficiaries because it is paid for by payroll taxes collected from employers and people who are currently working.
2. Part B (supplemental medical insurance) includes physician services, outpatient health care, emergency care, and laboratory services. Again, there are eligibility conditions and annually adjusted deductibles and co-payments. Beneficiaries are charged a monthly premium for Medicare Part B coverage, which is deducted from their Social Security check or billed quarterly. In 2006, the monthly premium for Part B is $88.50 and the Part B deductible is $124. People who work past age 65 and have adequate employer health benefits may decide to postpone enrollment in Part B since their medical coverage is already provided.
3. Added in January 2006, Part D (prescription drug coverage) is a voluntary outpatient prescription drug benefit offered by hundreds of private insurance plans nationwide that meet standards established by Medicare. Beneficiaries pay a monthly premium, a yearly deductible, and part of the cost of their prescriptions (i.e., co-insurance or co-payments). Part D coverage was created under the Medicare Modernization Act of 2003. Options include stand-alone prescription drug plans that provide drug coverage only and Medicare Advantage plans that provide both drug coverage and medical coverage, typically in a managed care plan format (e.g., HMOs and PPOs). Medicare Advantage plans replaced the Medicare + Choice program under Medicare Part C.

Additional information about the Medicare program and Medicare Part D coverage for prescription drugs can be found by calling 1-800-MEDICARE or visiting these web sites:

1. The Official U.S. Government Site for Medicare
2. Centers for Medicare and Medicaid Services (from the US Department of Health and Human Services)
3. Medicare Rights Center
4. Medicare Resource Center (from AARP)
5. Center for Medicare Advocacy
6. Social Security Administration
7. Benefits Check Up (from the National Council on Aging)

There is also information in the following publications from the Centers For Medicare & Medicaid Services (CMS), the federal government agency responsible for administering the Medicare program.

• Introducing Medicare's New Coverage for Prescription Drugs (CMS Publication 11103) (609k PDF)
• Comparing Medicare Prescription Drug Coverage (CMS Publication 11110) (360k PDF)

Another helpful resource to learn more about Medicare and Medicare Part D prescription drug plans is the State Health Insurance program (SHIP), where trained counselors can provide assistance at no charge. The number for local SHIP offices can be obtained from county offices of senior services, from 800-633-4227 (the CMS Medicare Help Line) or 800-792-8820 (the New Jersey Senior Citizen Hotline), or from the Web site www.shiptalk.org. In addition, www.MyMedicareMatters.org, a site sponsored by The National Council on Aging, is available to provide educational materials on Medicare Part D.