The Medicare Program
The Original Medicare Program, also known as Fee-For-Service (FFS) Medicare, consists of:
• Part A, hospital insurance; and
• Part B, medical insurance.
Under FFS Medicare, eligible individuals may enroll in Part A, Part B, or both Part A and Part B. Most individuals choose
to enroll in both Part A and Part B.
FFS Medicare was expanded in 1973 to include:
• Individuals who are under age 65 with certain disabilities; and
• Individuals with End-Stage Renal Disease.
Two parts were added to the Medicare Program in 1997 and 2006, respectively:
• Part C, Medicare Advantage (MA) (first known as Medicare+Choice); and
• Part D, the Prescription Drug Benefit.
MA is another health plan choice available to beneficiaries. It is a program run by Medicare-approved private insurance companies. Most MA organizations arrange for or directly provide health care items or services to the beneficiary who:
• Is entitled to Part A and enrolled in Part B;
• Permanently resides in the service area of the MA Plan; and
• Elects to enroll in a MA Plan.
The Prescription Drug Benefit provides prescription drug coverage to all beneficiaries enrolled in Part A and/or Part B who elect to enroll in a Medicare Prescription Drug Plan (PDP) or a MA Prescription Drug Plan. Insurance companies or other companies approved by Medicare provide prescription drug coverage to such individuals who live in the Plan’s service area. Medicare beneficiaries who meet certain income and resource limits may qualify for the Extra Help Program, which helps pay for PDP costs.
The Medicaid Program
The Medicaid Program is a cooperative venture funded by Federal and State governments that pays for medical assistance for certain individuals and families with low incomes and limited resources. Within broad national guidelines established by Federal statutes, regulations, and policies, each State:
• Establishes its own eligibility standards;
• Determines the type, amount, duration, and scope of services;
• Sets the rate of payment for services; and
• Administers its own program.
Deductibles, Coinsurance, and Copayments
You must collect unmet deductibles, coinsurance, and copayments from the beneficiary. The deductible is the amount a beneficiary must pay before Medicare begins to pay for covered services and supplies. These amounts can change every year. Under FFS Medicare and MA Private FFS Plans, coinsurance is a percentage of covered charges the
beneficiary may pay after he or she has met the applicable deductible. You should determine whether the beneficiary has supplemental insurance that will pay for the deductible and coinsurance before billing him or her for them.
In some Medicare health plans, a copayment is the amount the beneficiary pays for each medical service.If a beneficiary is unable to pay these charges, he or she should sign a waiver that explains the financial hardship. If a waiver is not assigned, the beneficiary’s medical record should reflect normal and reasonable attempts to collect the charges before they are written off. The same attempts to collect charges must be applied to both Medicare beneficiaries and non-Medicare
beneficiaries. Consistently waiving deductibles, coinsurance, and copayments may be interpreted as abuse.
