All About Medicare

What Is Medicare?

Medicare is a government health insurance program for seniors (individuals 65 and older) and people with disabilities. It is divided into two parts, Part A and Part B. Part A covers hospital insurance, including hospital, skilled nursing facility, home health, and hospice services. Part B covers supplemental medical equipment, laboratory tests, therapy services, ambulance services, and other medical supplies and services.

Who Is Eligible?

Medicare is automatically available to all persons--regardless of income--who meet the following criteria:
  • They are 65 or older and eligible for Social Security, Widow's, or Railroad Retirement (RR) benefits; or

  • They are disabled and have been receiving Social Security Disability Income, Widow's, or RR disability benefits for at least 24 months; or

  • They have End Stage Renal Disease

Individuals 65 or older who are United States citizens (and not automatically eligible) or permanent legal aliens who have resided in the United States continuously for five or more years are also eligible for Medicare.

How And When To Enroll?

To enroll in Medicare, all eligible individuals should file an application with the local Social Security Office. Enrollment is automatic for persons eligible for Social Security or Railroad Retirement Benefits; however, it is still advisable to contact the Social Security office to ensure enrollment.

Seniors may enroll in Medicare as early as three months prior to their 65th birthday. Working seniors and their spouses covered under the employer group health plan of a company with 20 or more employees may enroll within seven months following disenrollment from the employer group health plan.

Individuals who don't enroll when initially eligible may enroll between January 1st and March 31st of each year.

What Does Medicare Cost?

Medicare Part A is free for all individuals who are automatically eligible for the benefit.

There is a monthly Medicare Part A premium for permanent legal residents and citizens who are not automatically eligible for the benefit.

Everyone must pay a monthly Medicare Part B premium ($46.10 in 1995). Individuals who do not enroll when initially eligible must pay a ten percent (10%) premium penalty for each year they delay their enrollment.

What Does Medicare Cover?

Medicare covers most reasonable and necessary health care services, but does not cover custodial or long-term care, experimental procedures, and most prescription drugs.

Medicare Part A:

  • Inpatient Hospital Care:

    Medicare covers part of the cost of up to 90 days of hospital care per benefit period. The patient pays for the first day ($716 in 1995) for each benefit period. Medicare pays for days 2 through 60 in full and days 61 through 90 in part. The patient pays a copayment for days 61 through 90 ($179 in 1995). Medicare also pays in part for 60 additional hospital days in a patient's lifetime--"lifetime reserve" days. Medicare pays for these days only after the patient has exhausted the Medicare coverage through day 90. The patient pays a daily copayment ($358 in 1995).

    Note: A benefit period begins when a Medicare patient is admitted to the hospital and ends when the patient has been out of the hospital or skilled nursing facility for 60 consecutive days.

  • Skilled Nursing Facility Care:

    Medicare covers up to 100 days of care in a Medicare-certified skilled nursing facility (SNF), per benefit period, for individuals who require daily skilled services and who are hospitalized for at least three days in the 30 days prior to SNF admission. Medicare covers days 1 through 20 in full. There is a daily copayment for days 21 through 100 ($89.50 in 1995).

  • Home Health Care:

    Medicare generally covers up to 35 hours per week of skilled nursing and home health aide services, as well as skilled therapy services for individuals who are homebound and require intermittent skilled services. To be eligible for coverage, patients must receive care from a Medicare-certified home health agency (CHHA). Medicare pays the full cost of this care. There is no deductible or copayment.

  • Hospice Care:

    Medicare covers care for patients who are terminally ill and who opt for hospice care instead of hospitalization. Patients must receive care from a Medicare-certified hospice. There is a five percent (5%) copayment for each medication and for the cost of care.

Medicare Part B:

Before Medicare will cover services under Part B, the patient must incur $100 worth of medical services and pay out-of-pocket (or through other insurance) for those services. Once the patient meets this $100 deductible, Medicare pays eighty percent (80%) of the Medicare-approved charge for almost all Part B services.

Medicare providers who accept "assignment" may not charge patients more than Medicare's approved charge for their services. (Medicare pays 80 percent and the patient or Medigap policy pays the remaining 20 percent.) It is always a good idea to ask providers whether they will take assignment.

  • Physician Services:

    Medicare covers most reasonable and necessary physician services, except preventive services. (Note: Medicare now covers flu shots.) Although Medicare pays only 80 percent of its approved charge, under federal law, physicians who do not take assignment may not charge Medicare patients more than 15 percent above Medicare's approved amount. Some states have stricter limits on physician charges.

  • Durable Medical Equipment:

    Medicare covers most reasonable and necessary medical equipment purchased from Medicare-certified suppliers. (Note: Medicare does not cover items necessary for medical purposes that are not medical in nature. For example, Medicare does not pay for air conditioners or humidifiers, even if recommended by a physician.)

  • Therapy Services:

    Medicare covers physical, occupational, and speech therapy services when ordered by the physician for as long as medically necessary.

  • Laboratory Tests:

    Medicare covers many reasonable and necessary laboratory tests.

What If Medicare Does Not Pay?

Never Assume that Medicare does not cover a service, even if Medicare or a health care provider states that Medicare does not cover the service. Make sure that Medicare processes the claim and, even if Medicare denies the claim, if the service is renewable and necessary and not explicitly excluded from coverage, it's worthwhile to seek a review. To ask for a review, send a copy of the Medicare denial back to Medicare with a signed note asking for a review. There is a good chance that Medicare will pay the claim. Medicare patients who appeal their denials receive additional payments over 50 percent of the time.

The Qualified Medicare Beneficiary Program

Under the Qualified Medicare Beneficiary Program (sometimes called the Medicare Buy-In Program) the state Medicaid program pays Medicare premiums, deductibles, and copayments for Medicare beneficiaries with low incomes and very limited assete. For more information about this program, contact your local Department of Social Services or call 1-800-638-6833.

Medicare (Part A)

Hospital Insurance--Covered Services Per Benefit*



Medicare Pays

You Pay


Semiprivate room and board,
general nursing, and
miscellaneous hospital services
and supplies

First 60 days

61st to 90th day

91st to 150th day

Beyond 150 days

All but $716

All but $179 a day

All but $358 a day



$179 a day

$358 a day

All costs
Post Hospital
Skilled Nursing Facility Care

In a facility approved by
Medicare. You must have
been in a hospital
for at least 3 days and
enter the facility within
30 days after hospital

First 20 days

Additional 80 days

Beyond 100 days

100% of approved

All but $89.50 a day



$89.50 a day

All costs
Home Health Care
As long as skilled service needs exist.

Full cost

Hospice Care
No limit for care of terminally ill patient

5% of medication cost up to $5, 5% of the cost of care

The Balance
As long as skilled service needs exist

Full cost


These figures are for 1995 and are subject to change each year.
60 Reserve Days may be used only once; days used are not renewable
*A Benefit Period begins on the first day your elder receives services as an inpatient in a hospital and ends after your elder has been out of the hospital or skilled nursing facility for 60 days in a row.
**Medicare and private insurance will not pay for most nursing home care. Your elder must pay for custodial care and most care in a nursing home is considered custodial care

Medicare (Part B***)

Medical Insurance--Covered Services Per Calender Year



Medicare Pays

You Pay

Medical Expenses

(Physician's services, inpatient and outpatient medical services and supplies, physical and speech therapy, mammography, ambulance, etc.)

Medicare pays for medical services in or out of the hospital. Some insurance policies pay less (or nothing) for hospital outpatient medical services or services in a doctor's office

80% of approved amount (after $100 deductible)

$100 deductible**** plus 20% of balance of approved amount (plus any charge over approved amount)
Home Health Care

Unlimited visits as medically necessary

Full cost

Outpatient Hospital Treatment
Unlimited visits for skilled care as defined by Medicare

80% of approved amount (after $100 deductible)

Subject to deductible plus 20% of balance of approved amount

80$ of approved amount (after $100 deductible and starting with 4th pint)

First 3 pints plus 20% of approved amount (after $100 deductible)

***1995 Part B monthly premium is $46.10
****Once you have had $100 of expenses for covered services in 1995, Medicare will pay 80% of it's approved charge for all additional services you receive in 1995.

Medicare Does NOT Cover The Following Services:

  • Private duty nursing
  • Drugs (other than drugs prescribed for outpatient symptom management or pain relief provided by a hospice program)
  • Skilled nursing home care costs (beyond what Medicare covers)
  • Intermediate care nursing home costs
  • Custodial care nursing home costs
  • Routine dental care, including dentures
  • Hearing aids
  • Routine eyeglasses and eye examinations
  • Routine foot care
  • Cosmetic surgery
  • Routine immunizations
  • Care received outside th U.S., except under certain conditions in Canada and Mexico
  • Acupuncture
  • Chiropractic services, except that Medicare will pay for manual manipulation of the spine in limited cases
  • Television, telephone, or radio in hospital or skilled nursing facility
  • Custodial care at home
  • Private room in hospital or skilled nursing facility, unless medically necessary
  • Experimental procedures

For more information or a list of other Heritage Planning educational materials on helping your parents, contact:

Richard Smith or Roger Erickson
Professional Educators Benefits Company
Post Office Box 37102
Tallahassee, Florida 32315-7102

Telephone: Richard Smith: 850-385-2627, Roger Erickson: 850-385-5135
In Florida, outside Leon County call: 1-800-260-6573