What is Medicare?

Medicare is the Federal health insurance program for:

• people age 65 or older;
• people of any age with permanent kidney failure; and
• certain disabled people

As a Federal employee, you are eligible to participate in Medicare regardless of which retirement system you were covered by. Medicare has two parts -- hospital insurance (Part A) and physicians' services and other medical items (Part B).

Who pays for Medicare?

You and NASA are each paying an amount equal to 1.45 percent of your annual wages for Medicare coverage. This amount is shown on your leave and earnings statement as the hospital insurance tax (HIT). It is part of the Social Security tax on your earned wages. Your Federal employment counts towards eligibility for Medicare hospital protection.

You are eligible for Medicare hospital insurance (Part A) at age 65 at no cost if you have enough work under Social Security to qualify for benefits (usually 10 years). Since the HIT tax began in 1983, Federal employees have been earning credit for Medicare.

How do I get Medicare?

You may visit your local Social Security office or call 1-800-772-1213 for assistance with processing your application for Medicare. Social Security also will help your survivors with Medicare claims, payments, as well as providing information about the program.

In addition to yourself, the following people may be eligible for Medicare hospital insurance:

At age 65: Spouses, divorced spouses, widows or widowers, or dependent parents.
Under age 65: Disabled widows and widowers, disabled surviving divorced spouses and disabled children 18 or older.

Hospital insurance coverage at 65 automatically begins if you are already receiving a Social Security check; otherwise, you need to file an application -- about 3 months before you reach 65. Because of Medicare eligibility requirements, your spouse and your children may have to rely on your Federal Health Benefits Program. You do not need to retire to have hospital insurance protection at 65; however, if you continue to work after age 65, you will continue to pay the hospital insurance tax.

Hospital Insurance Benefits (Part A)

Medicare hospital insurance pays for three kinds of care by Medicare-participating facilities: (a) doctor-prescribed inpatient hospital care (semi-private room) when a hospital setting is necessary for treatment of your illness or injury; (b) medically-necessary inpatient care in a skilled nursing facility after an approved hospital stay; and (c) home health services (including hospice care).

Benefit Periods

Hospital insurance helps pay for up to 90 days of medically-necessary inpatient hospital care in each benefit period. A benefit period starts the first time you enter a hospital after your hospital insurance begins. It ends when you have been out of the hospital for 60 continuous days. There is no limit to your number of benefit periods.

• From the 1st through the 60th day in each benefit period, hospital insurance pays for all covered services except the hospital deductible. The deductible for 1997 is $760.
• From the 61st day through the 90th day, hospital insurance pays for all covered services except for a certain dollar amount per day -- $190 in 1997.
• You also have 60 lifetime (nonrenewable) reserve days if you are in the hospital longer than 90 days. Hospital insurance will pay for all covered services during the reserve days except $380 a day in 1997.

Skilled Nursing Facility

After a hospital stay, hospital insurance pays for up to 100 days in a participating skilled nursing facility in each benefit period. You must have been in the hospital for at least 3 days and meet certain other conditions. Hospital insurance pays for all covered services for the first 20 days and all but $95 a day (in 1997) for up to 80 more days. Covered services include semi-private room, all meals, regular nursing services, rehabilitation services, drugs, and medical supplies and appliances.

Medical Insurance (Part B)

You may enroll for the medical insurance portion (Part B) of Medicare when you are eligible for the hospital insurance at age 65. The monthly premium for 2001 is $50.00.

Enrollment in Medicare Part B

All persons are eligible to enroll in Medicare Part B at age 65 -- even if you are working; however, if you are not working and you do not apply for Part B during the initial enrollment period (3 month before to 3 months after age 65), but enroll during the general enrollment period (January through March), you cannot benefit from Part B until the upcoming July. If you are over age 65 when you apply during the general enrollment period, you will have a penalty equal to 10 percent of the monthly premium for each year you are older than 65. For example, at age 66 there would be a 10% penalty, at age 67 a 20% penalty, at age 72 a 70% penalty. There is no limit on the amount of the penalty. The percentage locks in when you apply for Part B, but the dollar amount of the penalty is based on the Part B premium for that year. The penalty is due each month that you continue to participate in Part B. It is not a one-time penalty.

Important note: Recent changes in the Federal Employees Health Benefit Plans create an additional incentive to enroll Medicare Part B. You are strongly encouraged to talk with a service representative if you are considering declining enrollment in Part B.

Special 7-month Enrollment Period

There is a special enrollment period if you are age 65 or over, continue to work, and continue to participate in either your own or your spouse's employer-sponsored group health plan.

The special enrollment period allows you to drop or delay enrolling in Part B of Medicare without a penalty or surcharge. The special enrollment period is a 7-month period coinciding with when you stop working or drop the employer health plan.

Medical Insurance Benefits

Medicare medical insurance helps pay for your doctors' services and a variety of other medical services and supplies that are not covered by hospital insurance. After meeting the $100 deductible, medical insurance will pay 80% of the approved Medicare amount. Your share is 20% plus the charges above the approved amount. If your doctor or supplier is Medicare- participating, they agree to accept the Medicare approved amount ("the assignment ") as total payment. You pay only the remaining 20%.

Covered doctors' services include hospital visits, office visits, house calls, surgical services, medical supplies furnished in the doctor's office, and drugs administered as part of your treatment that cannot be self-administered.

Medical insurance covers outpatient hospital services you receive for treatment and diagnosis (such as emergency room or outpatient clinic care).

When you no longer need part-time skilled nursing care, physical therapy, or speech therapy (all covered under Part A), medical insurance can continue to pay for home health visits if you need occupational therapy.

Also, under certain conditions, medical insurance can cover ambulance transportation, artificial limbs or eyes, durable medical equipment, home dialysis equipment, physical therapy, oral surgery, x-rays and radiation treatments, outpatient psychiatric services, some services of chiropractors and podiatrists, surgical dressings, splints, casts, colostomy supplies and braces, and optometrists' services for fitting corrective lenses after cataract surgery.

Some health care expenses which Medicare Part B does not cover are acupuncture, Christian Science practitioners' services, custodial care, dentures and routine dental care, eye glasses and related examinations, hearing aids and related examinations, injections which can be self-controlled (for example, insulin), orthopedic shoes, prescription drugs, routine physicals and their related tests, personal comfort items in the hospital (for example, telephone and TV), private room, and private duty nurses.

Medicare and Your Federal Employees Health Benefits Plan

In general, plans under the Federal Employees Health Benefits Program (FEHBP) afford Federal employees and annuitants protection against the same expenses as Medicare; however, many of the plans provide benefits for expenses beyond and in addition to Medicare. For example, many plans cover more hospital days than Medicare Hospital insurance does and without the deductible and coinsurance required. These plans usually cover expenses for prescription drugs which Medicare does not. In addition, Medicare does not have catastrophic protection.

Anti-duplication Provision

To prevent the receipt of benefits from Medicare and a Federal employee plan which amounts to more than medical expenses, all Federal employee plans apply an anti-duplication provision. This means that all plans adjust their benefits so in effect they supplement, rather than duplicate, the benefits provided by Medicare. If a person has coverage under Medicare's hospital or medical insurance, or both, and under a Federal employee plan, the plan will provide its benefits in full or in a reduced amount which, when added to the benefits payable under Medicare, will cover up to, but no more than, 100% of allowable expenses.

If you have coverage under both Medicare and a FEHBP plan and are still a Federal employee, you should first submit a benefits claim to your FEHBP plan which has the primary coverage. Your FEHBP is responsible for paying its portion of the medical expenses, within the limits of the plan, and Medicare is responsible for expenses not covered by your FEHBP. For retired Federal employees, Medicare is primary and FEHBP is secondary.

Because of the anti-duplication provision, employees and annuitants eligible for Medicare will need to assess their health insurance needs. In doing so, there is some general advice that we can provide.

Family Protection

• Presently, Medicare's hospital and medical insurance together offer fairly good protection at a reasonable premium. Hospital insurance coverage alone or medical insurance coverage alone is inadequate protection. Reminder: Medicare does not provide a self and family enrollment as do Federal health plans -- you and your spouse will each be eligible for coverage when age 65.
• Most standard (low) options of Federal employee plans adequately supplement full Medicare coverage at less cost than the high options. Therefore, as an employee or annuitant you may change to the low option of any available plan 31 days before gaining Medicare coverage or at any time after becoming covered under Medicare. Keep in mind again that your spouse under age 65 or children under age 22 may have to rely on your Federal employee plan alone because they are not eligible for Medicare. In that case, a reduction in your Federal employees’ Health Insurance coverage may not be advisable.
• Medicare benefits and rates change on a yearly basis as do the rates and benefits of plans in the Federal employee program. You need to keep current with the changes and reassess your health insurance needs as these changes occur.
• If Medicare is your primary coverage, your FEHBP must waive its appropriate deductibles, coinsurance, and co-payments. Your FEHBP plan has no requirement to waive its deductibles, coinsurance, and co-payments on expenses it covers, but Medicare doesn't cover -- like outpatient prescriptions. Some FEHBP plans do not apply this last standard and will waive deductibles, coinsurance, and co-payments on expenses they cover, but Medicare does not. Remember this provision when you select your FEHBP plan.