Medicare is a federal health insurance program that covers over 44 million individuals who are eligible due to age (over 65), disability through Social Security Disability Insurance (SSDI), or permanent kidney failure known as End Stage Renal Disease (ESRD). This section addresses Medicare for SSDI beneficiaries and those under age 65 with ESRD.

HISTORY

In 1965, Medicare was enacted as part of the Social Security Act to provide health coverage to individuals over age 65. In 1972, the program was extended to Social Security Disability Insurance beneficiaries and individuals with End-Stage Renal Diseases (ESRD). On July 1, 2001, the program waived the waiting period for those with Amyotrophic Lateral Sclerosis (ALS). The Medicare Prescription Drug, Improvement, and Modernization Act of 2003 created Prescription Drug Benefits that were added to Medicare in 2006.

MEDICAL ELIGIBILITY

Individuals under age 65 must meet certain medical eligibility requirements to qualify for Medicare. These include:

• Being a SSDI beneficiary with a medical determination of disability by the Social Security Administration (SSA); or
• Being an individual with permanent kidney failure, known as End-Stage Renal Diseases (ESRD).

Individuals with ESRD are a separate category of eligibility that does not necessarily qualify an individual for SSDI.

Once a beneficiary turns 65, he or she becomes eligible for Medicare on the basis of age regardless of disability status.

FICA CONTRIBUTION REQUIREMENT

To be eligible for coverage, a beneficiary under age 65 must meet FICA contribution requirements for Social Security Disability Insurance. In rare instances, an individual may qualify for SSDI on the FICA contributions of a parent as a Childhood Disability Beneficiary (CDB) or as a disabled spouse of a deceased spouse.

Unlike beneficiaries eligible for Medicare due to age, individuals under age 65 cannot buy into Part A if they don’t have enough quarters to qualify for SSDI benefits.

RESIDENCY REQUIREMENT

To be eligible for Medicare, a beneficiary must be a legal United States resident.

The Social Security website has a section that is a useful source of Social Security information for immigrants.

BENEFITS

Medicare is provided in three main parts: Part A (Hospital Insurance) and Part B (Medical Insurance), and Part D (Prescription Drug Coverage).

PART A (Hospital Insurance)

Benefits include hospitalization, limited skilled nursing, limited home health care, hospice care, and blood. Part A does not include custodial or long-term care. An individual is responsible for deductibles and specified co-payments for Part A benefits.

PART B (Medical Insurance)

Benefits include doctors' services and outpatient hospital care, lab and x-ray services, medical equipment and supplies, ambulance services, and some preventive care services. Part B also covers physical, speech, and occupational therapy, and some home health care that is not covered under Part A. (Part B does not include custodial or long-term care). Part B requires out-of-pocket coinsurance for covered services. The coinsurance is usually a fixed percentage of 20% of the Medicare approved payment.

PART D (Prescription Drug Coverage)

In 2003, the Medicare Prescription Drug Improvement and Modernization Act added a prescription drug benefit that took effect in 2006. Unlike Parts A and B, the Part D benefit is provided through private insurance companies.

WAITING PERIOD FOR ENROLLMENT

For individuals under age 65 and determined disabled by Social Security, benefits automatically begin in the 25^th month following SSDI payments or in the 30^th month after Social Security determined the disability onset date.

Individuals with permanent kidney failure, known as End-Stage Renal Diseases (ESRD), should be eligible for Medicare within 3 months of beginning dialysis.

There is no waiting period for Medicare enrollees under age 65 if the individual has a disability determination from Social Security for Amyotrophic Lateral Sclerosis (ALS), also known as Lou Gehrig’s Disease. ALS is not a separate category of eligibility, but is included in the broader definition of disability in SSDI. These individuals had previously been covered under the SSDI program but often died before becoming eligible for Medicare benefits. As a result, ALS beneficiaries have had their waiting period for Medicare waived upon receiving SSDI.

APPLICATION

Part A & B

Individuals younger than 65 should be automatically enrolled in Parts A and B after 24 months of SSDI payments. They should expect to receive notice of enrollment three months prior to the effective date of their Medicare eligibility. In some cases, an individual may receive notice of retroactive eligibility as a result of a successful appeal for SSDI benefits.

There are three times when a beneficiary will be eligible to enroll in Part B Medicare:

1. Initial Enrollment Period (the first six months following the 24^th month of SSDI payments);
2. Special Enrollment Period (the eight months following the end of qualified employer coverage); and
3. General Enrollment Period (the first three months of each year. Late enrollment penalties may apply).

Note: A beneficiary under age 65, with End-Stage Renal Diseases (ESRD) or determined disabled by Social Security from Amyotrophic Lateral Sclerosis (ALS), will need to apply for Medicare through Social Security. To apply, a beneficiary needs to contact a local Social Security office by calling 1-800-772-1213 (voice), or apply online at Social Security's website.

Part D

Once you choose a plan, you can sign up on the Medicare website, by calling 1-800-MEDICARE, or by contacting the plan directly. For those who are not on Medi-Cal, you can sign up in the three months before, the month of, or the three months after you become eligible for Medicare. This is called your initial enrollment period. If you sign up after this period, you may have to pay a penalty.

If you are on both Medi-Cal and Medicare, the rules are different, and depend on which Medi-Cal category you’re enrolled in.

• For those on most types of Medi-Cal, you will be automatically enrolled in a PDP in the month that you become dually eligible. You will be enrolled in a benchmark plan without regard to what medications you are taking. You can, however, switch drug plans at any time, and that switch will become active in the following month.
• If you are on Medi-Cal with a share of cost, you will be automatically enrolled in the month following the first month you meet your share of cost. You can only switch plans during months when you meet your share of cost. If you lose your Medi-Cal because you don’t meet your share of cost, you have a special three month enrollment period when you can switch plans.
• If you are participating in a Medicare Savings Plan, you will be automatically enrolled, but you will first have a two month window when you can choose your plan. This is known as facilitated enrollment.

MEDICARE OPTIONS

Medicare recipients may have several options available to assist with co-payments, deductibles, and prescription drug costs. It is important that individuals carefully consider how each option meets his or her particular needs before selecting a plan.

MEDICARE ADVANTAGE PLANS (MEDICARE MANAGED CARE PLANS)

Medicare Advantage Plans (formerly called Medicare HMOs) are called Medicare Managed Care plans and are also referred to as Medicare + Choice.

A Medicare Advantage Plan is a health plan that provides coverage for Medicare benefits through a network of doctors, hospitals, and other providers. Medicare Advantage Plans may also provide additional benefits. For example, some provide a Part D prescription drug benefit.

Some plans have a cap on annual out of pocket costs. Out-of-pocket costs and premiums are notably higher in Northern California than in Southern California.

To join a Medicare Advantage Plan, a beneficiary must:

• be enrolled in both parts of Medicare;
• assign his or her Medicare benefits to the Plan; and
• get his or her health care through the plan’s network providers.

An individual can go to the Medicare website and use the Medicare Personal Plan Finder to find the plans available in his or her zip code, as well as to compare premiums and cost of coverage.

The availability of Medicare Advantage Plans varies in each county and are not offered by all carriers in all counties in California. Other components of Medicare Advantage Plans include:

• Limited physician choice within the network. However, premiums and co-payments may be lower than the cost of a Medigap plan.
• No waiting period for pre-existing conditions. Individuals with End-Stage Renal Diseases (ESRD) are generally ineligible to join a Medicare Advantage plan.
• Individuals should apply for a Medicare Advantage plan approximately 1 month prior to becoming eligible for Medicare. This will ensure that benefits will begin at the same time as Medicare. Individuals can also apply anytime the Medicare HMO is accepting new members.
• An option to switch to another Medicare + Choice plan or a limited number of Medigap plans (except for those individuals with ESRD) if the current plan stops providing services in the area.

Note: Individuals eligible due to ESRD may not enroll in a Medicare Advantage Plan as new members. They can stay in a plan if they already belonged to a Medicare Advantage Plan prior to their diagnosis.

MEDICARE SUPPLEMENTS (MEDIGAP PLANS)

Medicare supplements are commercial insurance plans often called a Medigap Plan. People who have a Medigap Plan are enrolled in Original Medicare, sometimes referred to as Fee-for-Service Medicare.

Medicare beneficiaries, under age 65 in California can choose from a limited number of Medigap Plans, during the first six months after accepting or signing up for Medicare Part B. Individuals with ESRD, however, are ineligible for Medigap policies.

Medigap policies can cover Medicare co-payments and deductibles. Some plans used to cover prescription drugs, although after 2006, none offer this to new beneficiaries. Those who signed up for a plan with drug coverage can stay on the plan until they sign up for Part D.

Plans are standardized by Medicare and offered in a system that uses twelve letter names called Plan A through Plan L. Benefits are identical from one carrier to the next for each specific lettered plan, although prices vary between companies. Not all Medigap Plans are offered by all insurers, nor are they available in all counties. An individual can go to the Medicare website and use the Medicare Personal Plan Finder to find the plans available in his or her zip code, as well as to compare premiums and cost of coverage. Premiums for Medigap policies can be expensive, with some costing several hundred dollars per month. Individuals with disabilities often pay a higher premium than most retired persons.

Medigap policies only work with Original Medicare and will not pay benefits if an individual joins a Medicare Advantage plan.

Medigap insurance companies can impose a waiting period of up to six months before covering a pre-existing condition. The pre-existing condition waiting period can be shortened, waived, or eliminated if the individual has had at least six months of prior, continuous health coverage before applying for a Medigap policy during initial enrollment.

Note: If an individual with ESRD had group health insurance including COBRA at the time of diagnosis, the group health plan or COBRA is required to pay primary benefits for the first 30 months. The group health plan will be primary regardless of the work status of the covered person.

During initial enrollment in Medicare Part B and guaranteed issue periods, companies are required to sell SSDI beneficiaries (except those with ESRD) one of five Medigap plans regardless of his or her health status and without a pre-existing condition waiting period. The five Medigap Plans are: A, B, C, and F, and one other plan (H, I or J) that covers prescription drugs. The insurer can choose which of the three plans will be offered.

Although insurance companies are required to provide Medigap policies to individuals under age 65, they can charge a higher premium.

Availability and the premium for a Medigap plan can vary by county. Medigap plans include:

• The ability to choose from more physicians. Premiums and cost may be higher than a Medicare HMO plan.
• The option to switch to a limited number of Medigap plans (except for those individuals with ESRD) if the current HMO plan stops providing services in the area.
• The option to switch Medigap plans, of the same design, for 30 days each year following an individual’s birthday.

It is recommended that applications for Medigap plans be completed before Medicare Part B’s initial enrollment period begins. This will ensure that Medigap benefits will begin at the same time as Medicare. Companies must sell an individual a policy for up to six months after their Medicare Part B benefits begin.

Note: Individuals under age 65 with ERSD are not guaranteed the right to purchase Medigap insurance. However, they may be able to access health coverage through the California Major Risk Medical Insurance Program (MRMIP).

MEDI-CAL (Medi-Medi or Dual Eligibles)

Some Medicare beneficiaries may also be eligible for Medi-Cal. This status is often referred to as Medi-Medi or Dual Eligibles. Medi-Cal may be an option to supplement Medicare if an individual meets income and asset requirements. Medi-Cal may be available to pay all premiums, deductibles, and co-payments under Medicare and in some cases may pay for HMO premiums. Part D has special rules for dual eligibles.

VETERAN’S BENEFITS

Military veterans may also get health coverage through the Veteran’s Administration. Coverage for health care may require a service related injury or condition. Prescription drug coverage can also be offered to veterans based on income. Many veterans qualify for coverage under section 7(c) which will provide generic prescriptions with a $8 co-payment. For more information go to the Veteran's Administration website or call 1-877-222-8387 (voice) or 1-800-829-4833 (TTY).

EMPLOYER COVERAGE

Individuals under age 65 may be covered as a spouse or family member under an employer plan. If the group plan covers more than 100 people, the plan will provide primary coverage and Medicare will be secondary. Employer plans often provide more generous benefits, including prescription drugs, than either a Medicare HMO or a Medigap policy.

COBRA, Cal-COBRA, and OBRA continuation will end when an individual becomes eligible for Medicare, with certain exceptions, regardless of whether a beneficiary accepts the Medicare coverage. However, if a beneficiary currently has Medicare and then has a qualifying event making him or her eligible for COBRA or Cal-COBRA, continuation coverage will not be terminated.

For the Part D drug benefit, if you have employer coverage, you may be able to stay on that coverage without paying late enrollment penalties. Your employer should be able to tell you if you have creditable coverage. Some employers may not allow you to choose a Medicare Part D plan and remain on their coverage, so be sure to check with your employer before signing up for Part D.

ADDITIONAL INFORMATION

Some beneficiaries may be eligible for Medicare Savings Programs through Medi-Cal. These savings programs can cover deductibles, premiums, co-payments, or coinsurance. Medicare Savings Programs include:

• Qualified Medicare Beneficiary (QMB);
• Specified Low-Income Medicare Beneficiary (SLMB);
• Qualified Individual-1 (QI-1); and
• Qualified Disabled Working Individual (QDWI).

To find more information about Medicare Savings Programs, contact your local Department of Medical Care Services. Information regarding local offices and telephone numbers can be obtained on the California Department of Medical Care Services website or by calling the Beneficiary Unit for Medi-Cal, 916-636-1980 (voice).