medicare benefits
Medicaid in the United States is a social health care program for families and individuals with low income and limited resources. The Health Insurance Association of America describes Medicaid as a "government insurance program for persons of all ages whose income and resources are insufficient to pay for health care." (America's Health Insurance Plans (HIAA), pg. 232). Medicaid is the largest source of funding for medical and health-related services for people with low income in the United States. It is a means-tested program that is jointly funded by the state and federal governments and managed by the states,[1] with each state currently having broad leeway to determine who is eligible for its implementation of the program. States are not required to participate in the program, although all currently do. Medicaid recipients must be U.S. citizens or legal permanent residents, and may include low-income adults, their children, and people with certain disabilities. Poverty alone does not necessarily qualify someone for Medicaid.
The Patient Protection and Affordable Care Act significantly expanded both eligibility for and federal funding of Medicaid. Under the law as written, all U.S. citizens and legal residents with income up to 133% of the poverty line, including adults without dependent children, would qualify for coverage in any state that participated in the Medicaid program. However, the United States Supreme Court ruled in National Federation of Independent Business v. Sebelius that states do not have to agree to this expansion in order to continue to receive previously established levels of Medicaid funding, and many states have chosen to continue with pre-ACA funding levels and eligibility standards.
Medicaid in the United States is a social health care program for families and individuals with low income and limited resources. The Health Insurance Association of America describes Medicaid as a "government insurance program for persons of all ages whose income and resources are insufficient to pay for health care." (America's Health Insurance Plans (HIAA), pg. 232). Medicaid is the largest source of funding for medical and health-related services for people with low income in the United States. It is a means-tested program that is jointly funded by the state and federal governments and managed by the states,[1] with each state currently having broad leeway to determine who is eligible for its implementation of the program. States are not required to participate in the program, although all currently do. Medicaid recipients must be U.S. citizens or legal permanent residents, and may include low-income adults, their children, and people with certain disabilities. Poverty alone does not necessarily qualify someone for Medicaid.
The Patient Protection and Affordable Care Act significantly expanded both eligibility for and federal funding of Medicaid. Under the law as written, all U.S. citizens and legal residents with income up to 133% of the poverty line, including adults without dependent children, would qualify for coverage in any state that participated in the Medicaid program. However, the United States Supreme Court ruled in National Federation of Independent Business v. Sebelius that states do not have to agree to this expansion in order to continue to receive previously established levels of Medicaid funding, and many states have chosen to continue with pre-ACA funding levels and eligibility standards.
Medicaid in the United States
Thank you very much and good morning.
Ladies and gentlemen, if we want to
understand Medicaid, we must look at
the overall picture. We can’t do it in isolation.
What I would really like to have you do is
to think about how you could change the system
because the system has got to be changed dramatically
to survive.
Health care in America, I believe, is the best in
the world. Now, you can find countries that do
better in prenatal care. You can find a country that
does better on longevity or on mental disease and
defect. In any one area of health care, you can find
a country that is probably doing something better
than the United States. But overall, holistically, if
you are going to become sick, you will want to
receive care in a U.S. city such as St. Louis because
you have got an outstanding, outstanding health
care system here. You’ve got some of the best
researchers, some of the most talented people in
the world right here in St. Louis. So if you are
going to get sick, no matter where you are in the
country, you will want to get back to St. Louis to
be taken care of. I think it is pretty common for
Americans to feel this way. If our health care system
is this good, we surely want to preserve it.
The health care system in America is under a
great deal of stress and strain. It’s not onlyMedicaid,
it’s the total system. Right now we are spending
$2 trillion on health care. You may want to take
some of these figures down because I think they
are really relevant. Two trillion dollars is what we
expend now on health care. That’s 16 percent of
our gross domestic product (GDP). And within
seven years that’s going to double to $4 trillion and
that’s going to go to 21 percent of GDP in America.
When you reach this level, you put a lot of companies
in St. Louis and in the Midwest out of any
kind of competitive advantage in the international
arena, because health care costs for countries
around the world are much smaller percentages
of GDP than those in the United States.
For instance, Japan is the second largest economic
power right now, soon to be overtaken by
China. Right now, Japan is spending about 71/2
percent of GDP on health care and may reach 8
percent when we reach 21 percent here in the
United States. If we are going to be competing
against Japan, we are going to see what is already
taking place in the automobile sector: At the beginning
of this year, General Motors was the largest
automobile manufacturer and seller of cars in the
world. They pay $1,725 per automobile to sustain
their employee health care system. Toyota, a
Japanese company, spends $225 dollars per automobile.
So every car that GeneralMotors sells costs
an extra $1,500 for the company to produce.
We have seen the toll this has taken on General
Motors and Ford. According to business projections,
Toyota was not supposed to overtake Ford until
the end of this year; they overtook Ford in January
of this year. They were not supposed to overtake
General Motors until the middle of next year; they
overtook General Motors and became the largest
automobile manufacturer in the world in April of
this year. This is indicative of the challenges that
the high price, high cost of health care will impose
upon all manufacturers and firms that sell internationally—
especially over the next seven years,
with the doubling of our health care costs. If you
are in business or if you are in the Federal Reserve
System, you have got to be concerned about the
terrible cost of health care and how you are going
to be able to allow America to continue to compete
internationally, especially with the Chinese.
So it is an immediate problem.
The second immediate problem involves
employer-provided health care coverage: During
and after the secondWorldWar there was a law
passed that enacted rules and regulations preventing
businesses from increasing wages. Companies,
in order to keep their best employees and continue
to recruit good employees, offered health insurance.
A lot of companies started offering first-dollar
coverage, which means that all of an employees
health care was paid for by company health insurance,
which was sponsor owned and negotiated
by the employer. Over the years, insurance costs
have gone up and companies have started to withdraw
from comprehensive employee coverage,
especially in the past 10 years. The 82 percent of
employees who have historically been covered by
company health care plans has been declining to
about 60 percent. It’s probably on its way down
to 45 percent. For companies with 50 or fewer
employees, it’s already in the low 50s.
As coverage by employers decreases, there
will be more pressure on Medicaid—more uninsured
and more government control of health care.
And because the cost of health care is going to
continue to rise, the problems are going to get
worse: Fewer people are going to be covered by
employer-provided health insurance, and co-pays
are going to increase. The good side of that is that
there has been an upsurge of attention and interest
across America in consumer health care. For the
first time, higher co-pays and/or less employer
contributions to health insurance are prompting
health care questions: How much is this procedure
going to cost? Do I need this patented drug or can
I get a generic drug? For the first time in America
we are starting to educate ourselves about health
care and we are starting to ask questions, which I
think is extremely positive. Even though the
employers are backing off, the fact of the matter is
that this employer withdrawal is starting to make
employees and consumers much more knowledgeable
about health care.
The third big driver that you have to take into
consideration is going to directly impact Medicaid
because so many states and so many policymakers
are expecting the federal government to take over
Medicaid.What I am going to tell you is going to
point out that Medicaid is not going to be helped
by the federal government. The reason being is that
by the year 2014, seven years from now, Medicare
starts to go broke. Medicare right now takes up 21/2
to 3 percent of GDP. In 75 years that’s going to
jump to 15 percent, and the unfunded liabilities
of Medicare in 75 years are going to be $68 trillion
dollars. To put this number in it’s proper perspective,
the entire GDP in America right now is a little
under $13 trillion. So this surge in costs is huge,
and Medicare is going to start going bankrupt in
the year 2013 or 2014.
Congress has been taking the money out of
Medicare. And, likely until 2013 or 2014,Medicare
will continue to shed an excess of funds. That
excess money has gone into the United States
Treasury. Do you know what happens to money
that goes into the United States Treasury? It’s spent.
Congress has spent this money and continues to
do so. Come 2014 there will be no more excess
money coming in, and Medicare is going to come
over and say, “Pay us: Those IOUs that you have
been giving out for 28 years...Write us a check.”
Congress will say, first off, that they don’t have any
excess money coming in. Moreover, the Medicare
surpluses were being used to fund other government
programs. The first thing Congress will have
to do is to take other taxpayer monies to supplant
the money that Medicare was funding in those
programs. Secondly, on those IOUs to Medicaid,
they won’t have any money to pay them. The Iraq
War has cost us $8.5 billion per month and that’s
not going to be paid off for many years, even if we
stop the war this year. Medicare has got the first
draw on those IOUs that the government has sent
and Congress doesn’t have the money.
In 2014, Congress is going to be faced with
three objectives, I believe. They are going to have
to first come up with the money, and there are
several ways to do this: They could go to a complete
price control system and a rationing of health care
on elective surgeries, on elective appointments to
your doctor—which they can do—and ratchet down
the cost. ButWashington University in St. Louis,
for instance, is going to be adversely impacted
because there will be no money coming in. Or they
could go to a government-controlled, nationalized
system, which some of you in this room support.
I don’t. The reason I don’t support it is because it
will stifle innovation completely. I want to find a
cure for breast cancer because my mother-in-law
died from it, my wife had it, and my younger
daughter had it. I want to find a cure for breast
cancer, and I don’t want to stifle innovation, so
I’m not for a nationalized health care system.
Another option is to raise huge amounts of
taxes. Congress could roll back all of those tax
breaks we’ve been given. If they were to reinstate
those taxes and then double them, that would
stabilize Medicare. That’s the background. Those
governors and state legislators that believe that
Washington is going to fix Medicaid by coming in
with new dollars—well, it’s not in the cards.
I ask you now to put your hat on and say you
are a governor. You’re the governor of Missouri,
and you want to be able to fix Medicaid and take
care of the uninsured and underinsured in this
state. Let’s take a look at Medicaid. Medicaid is a
combination program. It was instituted as a result
of Medicare, to follow it and supplement it. To fill
in the gaps. It was sort of a strange phenomenon.
The federal government pays about 55 percent on
average of stateMedicaid costs. But that percentage
varies by state. Some states get 70 percent, other
states get 50 percent, but on average it’s 55 or 45
percent. The federal government pays 55 percent
and for that payment they say there are 32 programs
or policies that states can add on and have complete
discretion over and we will fund 55 percent;
but there are some mandatory programs for children
andmothers that we are going to require every
state to have and we are going to set those rules.
Medicaid is a partnership between the federal
and state governments in which states have the
option of putting in voluntary programs, which
every state has a portion of. My home state of
Wisconsin has got the maximum. Other states do,
too. Missouri does not. Anyway, you can put in
these voluntary programs,which the federal government
will fund at 55 percent on average, and you
have to fund all the mandatory programs put out
by the federal government as well.With that as a
background, then, how do we fix the system and
how do we change health care and at the same
time specifically fix Medicaid?
I tell governors, think boldly. Be bold and
courageous. Because, just stop and think practically,
if you have an entity and you are in business
and somebody comes up to you and says I will give
you 55 percent of your cost and all you have to do
is come up with 45 percent, how much of that
money will you take? Me, I would take as much as
I could get. I would put every voluntary program
in. I would put in as courageous and as aggressive
a program as I could have for my state because the
federal government is going to pay 55 percent.
The federal government quakes when I say
this because they don’t want states to think that
way. But if you stop to think about it, if you are a
banker or in a business and somebody comes in
and says if you want to expand your business I’ll
give you 55 percent and all you have to come up
with is 45 percent, wouldn’t you take as much as
you could get? It’s an open-ended proposition on
Medicaid, and that’s why I don’t understand the
timidity of governors. It’s a blank check, and if you
consider health programs for children, it’s even a
better deal. The federal government will give you
70 percent for those, and all you have to come up
with is 30 percent. If you want to go into technology,
there are some programs for which the federal
government will give you 90 percent and all you
have to come up with is 10 percent. I, for the life
of me, do not understand why states don’t completely
bankrupt the federal government. It’s a
wide-open thing.
I tell you this as a background, and then I look
at welfare reform because I started welfare reform
in this country.What I did is I brought welfare
mothers into the governor’s residence in Madison
and I asked them why they didn’t work. They said,
“If we go to work we lose our health insurance.” I
said, “If I give you health insurance will you go to
work?” They said, “Yes, but if I go to work who is
going to take care of my children?” I said, “If I pro-
vide you with day care will you go to work?” They
said, “Yes, but I dropped out of school when I was
thirteen and I have no job skills.” I said, “If I give
you job skills, day care, and health care, will you
go to work?” They said, “Yes, but most of the jobs
are in the suburbs and I live in the central city.” I
said, “I’ll provide you transportation.Will you go
to work then?” They said, “Yes.”
And welfare reform was born.When I started
welfare reform, governors and policymakers in this
country said it couldn’t be done: “Welfare reform
cannot take place. It’s a way of life and you are just
going to get hurt, Tommy.” I said, “No, I’m going
to try it because I want to give people a chance to
get out of poverty, and the only way to get out of
poverty is by working.” I didn’t want to be cruel. I
wanted to be compassionate and give people the
assistance to help themselves. It was born at the
dinner table at the mansion in Madison with the
welfare mothers.
Once I started, the governors who originally
told me not to do it saw that I was getting some
success and they started copying me. John Engler
said, I’m smarter than Tommy Thompson. If he
can do it, I can do a better job. Then Arnie Carlson,
then Terry Branstad, and it spread across the
country. Then the federal government noticed the
states were getting good recognition and reducing
welfare and decided they had better get into the
act. They would have never done it except for the
fact that the states had done it.
Why do I tell you that story? I tell you that
story because when I was secretary of Health and
Human Services,Mitt Romney came tome fromthe
state of Massachusetts, and Ted Kennedy, too, and
said if you could give us a waiver, Tommy, so that
we could use our disproportionate share money,
the federal dollars that come back to the federal
government, we can set up a health insurance programthat
will cover underMedicaid all of the uninsured
in Massachusetts. I jumped at it. I didn’t
know he was going to be my opponent. I jumped
at giving him the waiver, so that he could try something,
because in the back of my mind I knew what
was going to happen. It was the last waiver that I
handed out. Then I went on the speaking circuit
on health care.
I always put this out as a bet. I bet anybody in
the audience $100 to $5 that there will be 25 states
this year that are going to offer some kind of solution
on health care on the uninsured andMedicaid.
The reason I was so sure on this is because of my
experience on welfare. I knew that once a governor
does something and gets some good public recognition
and publicity, others are going to copy it.
Governors love to go to conferences. I did the same
thing. I was a governor for 14 years. You go to a
conference, you find out what’s the best program
out there that’s working, and then you run back to
your home state, change a couple of things, and
take credit for it. I knew that’s what happened on
welfare. I knew that’s what would happen in health
care, and that’s exactly what’s happening across
America:Massachusetts, Vermont, NewHampshire,
California,Missouri,Wisconsin,Michigan, Illinois,
Minnesota—you name it—Iowa—they are all trying
something new. Because one state started it, it’s
starting to spread.
Ladies and gentlemen, the beauty of this is that
great opportunities exist. Come 2008, the presidential
election is going to take place. Democratic
candidates are talking about a single-payer nationalized
system. Republicans, except for me, are talking
about putting a tourniquet on health care. I’m
talking about a complete transfusion and transformation,
and that’s where you come in today.We
are here today to talk about Medicaid. I’m trying
to set the stage for you so that you do know now
that we have problems facing us in 2014. The federal
government is not going to fix them, but the
federal government’s got a piggy bank and there is
no limit to what you can do innovatively in your
state to pull in federal dollars to help you fix your
problems in Missouri.
So let’s get started. Now we look at health care
and at the fact that you have a responsibility as
the governor of Missouri to make your health care
system effective, efficient, and expanded to cover
the underinsured and uninsured. Currently, $2
trillion is spent on healthcare, and Medicaid is 20
percent of your Missouri budget. You’ve got to
realize that, for every $1 in Medicaid costs, as a
governor you pay only 45 cents. A governor has to
think, I have a real opportunity here. You look at
health care and you find out that 93 percent of
that $2 trillion is spent on patients who go to their
doctor or the hospital after they’re already sick. It
is called a curative system. The money is spent to
get you well after you get sick. That isn’t health
care. Consider your car: After so many miles, you
take it in for an oil change, grease job, etc. But you
don’t take your own body in for maintenance. You
wait until it collapses and go to the hospital;
you’ve got cancer and then it costs a heck of a lot
more money to get you well. There’s hardly any
money, only 7 percent of that $2 trillion, that is
used to keep you well. So don’t you think the first
thing we should do is have a transformation and
put the emphasis on wellness? Let’s see if we can
keep some individuals out of the hospital.
So, after transforming the system, after trying
to transform the curative system to a wellness and
prevention system, you look at the next big challenge.
And the biggest area, especially for poor
people, is chronic illness. Seventy-five percent of
the cost of health care, including costs forMedicaid
(in fact, especially costs forMedicaid) is for chronic
illnesses.WhenWillie Sutton and Jessie James were
asked why they robbed banks, they said, because
that’s where the money is. So if we want to fix
Medicaid, we want to be able to put the emphasis
on wellness butmost importantly on education and
getting people to understand chronic illnesses
because that’s where the big money is. You want
to change that. You want to have the best system
and the healthiest people in Missouri so you can
go brag about it.
The first thing you want to do is address the
biggest health care issue, which is tobacco use.
People don’t understand this, that tobacco use is
still the biggest problem related to chronic illnesses
in America. Four hundred and forty-three thousand
Americans died last year of tobacco-related illnesses.
Just as I did when I was secretary, when I
was governor ofWisconsin I went around in the
morning and took cigarettes out of my employees’
mouths as they were smoking outside the door.
Sometimes I got slapped. Sometimes I got cussed.
One day I walked around and an elderly gentleman
was taking a drag and didn’t know what to do with
his cigarette when he saw me coming. So he put
it in his pocket. It caught his shirt on fire, but he
stopped smoking. Then I got so irritated that I
banned all the smoking on all of the property
owned or leased by HHS. I made any employee
who wanted to smoke go over to EPA and smoke.
A complete embarrassment.
Let’s return to our imagined role as governors
now. Here’s what I would do if I were governor of
Missouri. I would put a dollar tax on every pack
of cigarettes sold, and I’m a Republican. That’s a
tax, ladies and gentlemen, but I wouldn’t let the
government have the money because 70 percent
of smokers want to quit.Which is a tremendous
opportunity, ladies and gentlemen, to put that
dollar-a-pack tax into a fund only for smokers to
draw down to quit. Can you imagine the change,
the transformation of public health if you did that,
for patches, for counseling, for doctors? And you
would be able to have a huge impact. On the federal
government level, I would require nicotine to be
regulated by the FDA. Baby aspirins: How many
of you take a baby aspirin every day? I do. Baby
aspirins have to be regulated by the FDA, and baby
aspirins are used to improve your health and circulation
system, while nicotine isn’t regulated
and it killed 443,000 Americans last year. Does
that make any sense to any rational person in the
public arena? So then we take care of tobacco.
The next big health issue is diabetes. Diabetes
is just huge. Eighteen million Americans last year
had type II diabetes, a lot of those in the Medicaid
arena. This year, 21 million. One year later and
it’s 21 million Americans. Costs went from $135
billion to $145 billion in both direct and indirect
cost for the health care system. There are 41 million
more Americans, ladies and gentlemen, some
in this room that are walking around that are prediabetic
and within five years will be diabetics,
and then the cost will go to $400 billion. One out
of every five dollars going into the health care system
will be needed for diabetes if we don’t make
changes.
Dr. Peck has spoken about the National
Institutes of Health (NIH). The NIH is a great
research engine for the world, and we should
double its funding again, which would achieve
significantly better results than some of the other
programs funded by federal government expenditures.
But the NIH did a study that says, if you walk
30 minutes per day and loose 5 to 10 percent of
your body weight, you reduce the incidence of
type II diabetes by 60 percent.We can walk and
we can watch our body weight, which leads us
then to a third big challenge: obesity. Obesity and
diabetes are epidemic among minorities.
We need to look at obesity.We can look at the
mirror and say chunky is good, but slim is better. I
tell my business clients that have cafeterias, and
you should do it here on the campus ofWashington
University, give away salads or subsidize salads,
vegetables, and fruits for a buck a serving. Charge
$5 for hamburgers, $10 for cheeseburgers, and 20
cents per french fry and you will change the eating
habits of your employees. Let’s face it, if you are
able to bring a nutritionist in and start teaching
nutrition at the medical schools and make it a
detailed subject—and especially counsel minorities—
you have a tremendous chance to change
Medicaid and health care for the better.
That also leads into cardiovascular disease,
which is the number one killer of both men and
women today in America. Here’s an idea: It is not
radical, but it is common sense. I’ve started a diet
and you don’t have to pay any royalties for using
it. I want you to know that there are no food police
in St. Louis. Although your mother and father and
grandma and grandpa said you have to eat everything
on your plate, no law says you have to do that.
Take whatever you want and eat only half and you
will loseweight. This is Tommy Thompson, I’ve lost
15 pounds doing that. I know it hasn’t improved
my looks any, but it has improved my strength and
my ability to work harder. So we must take care of
chronic illness.
This is where governors like you, policymakers,
and businesses like the Centene Corporation come
in. Now, I don’t want you to think that I’m up here
promoting Centene, but I like Centene and it’s a
great company. I want you to know that Centene
manages diseases for Medicaid, and I’m not saying
that just for you to hire Centene. That is not the
thing I’m saying. You, as a governor, look at your
Medicaid population. Twenty-five percent of your
Medicaid population is using anywhere from twothirds
to three-quarters of your Medicaid budget.
These are the individuals that are severelymentally
and physically disabled, your diabetes population,
people with severe asthma, and they are using up
two-thirds to three-fourths of yourMedicaid budget.
Don’t you think it would be smart for you to
address that problem?
The best way to do it is to manage those diseases.
Hire disease managers. Do it yourself. Find
out if individual people on Medicaid are taking
their medicines. I’m going to give you a fact. This
is a Pfizer study, which absolutely amazes me.
Thirteen percent of Americans go in to see a doctor
for a sickness and get a prescription and never take
it to a drug store, never take it to a pharmacist.
Another 14 percent take the prescription to the
pharmacist and never pick it up. Can you believe
that? Twenty-seven percent of people see a doctor
for an illness and never go pick up the medicine.
Another 60 percent, after five months, discontinue
the regular use of medicines. They take it maybe
day after day, for a few weeks, but then stop.
If in fact you were able to manage just the
medicines and to find out whether people are
actually complying with what the doctor said, you
would have a tremendous reduction in cost, especially
for that 25 percent who are severely ill. You
have got to realize that you are going to get 55 percent
of the cost of hiring disease managers paid
for by the federal government; so, it only makes
common sense, I would think, if you are a reasonable,
visionary governor, that this is a great way to
improve the quality of health, the quality of life
of citizens while also holding down cost.
The next thing, ladies and gentlemen, in
Medicaid is the huge problem in information
technology. Doctors atWashington University,
you would not allow a student to enroll in your
school unless they had straight As. You will not
allow a slacker like me, a C+ student, to get into
medical school. Students attending this school
must have excellent grades. You want the best.
You want Dr. Peck to operate on you or Dr. Shapiro.
They’re smart. They’re brilliant. But there is one
subject that those individuals don’t have to get an
A in to be admitted into this wonderful medical
school.
Do you knowwhat that subject is? Handwriting.
And I’ll tell you, Dr. Peck, I don’t know how you
write but I would bet that your handwriting hasn’t
improved a bit in the past 50 years. Ninety-two
percent of doctors still write out prescriptions,
and one out of five of those prescriptions has to be
corrected at the pharmacy: one out of five. That’s
20 percent. Ninety-eight thousand Americans
died last year—not my figure, but the Institute of
Medicine’s and doctors’ own studies—as a result
of medical mistakes. Fifty percent of those deaths
were caused by the wrong medicine, the wrong
amount, at the wrong time, to the wrong person.
If we had e-prescribing, you could input a
patient’s name and other characteristics into an
electronic system and send and retrieve information.
And I know you know what palm pilots are
because I see so many of you looking at them as
I’m speaking. Put your name in, Dr.William Peck
(great guy, a little arrogant) and your wholemedical
history could be retrieved, including prescriptions
you’re taking. Let’s say he comes in with a common
cold and Dr. Shapiro examines him and he types
in “common cold,” or the cold that’s going around
in St. Louis now. It immediately comes up with the
three to five drugs that will take care of that, and
immediately any contraindicators will come up
with themedicines he is already taking. Dr. Shapiro
then will press another button and the bill goes to
Centene: no handwriting, just a button. Then he
presses another button and the script automatically
goes down to the pharmacist. For the 13 percent
of patients who don’t take the script down there,
it automatically goes down there. That’s the technology
of today, and you would reduce 50 percent
of those error-related deaths overnight. Medicaid
can help pay for that for your doctors, and your
patients will be able to get better quality of care
and therefore better quality of life.
The final aspect of information technology is a
paperless working environment. Do you know what
a 1040 is? Do you know what a W2 is? Large and
small employers all fill out the same form, a W2,
one form. How many forms does it take to file for
Medicaid? How many forms must be filled out to
go see a doctor when you are on Medicaid? How
many forms must be filled out when you go into
the hospital and apply for reimbursement? And
how many of you can even understand what those
forms say once you fill them out? And Medicare is
even worse. If we are smart enough to have the
most complex tax system in the world with one
form and the most complex employment system
with one form, don’t you think we should be smart
enough to have one medical form or go completely
paperless?We could save 10 percent of the cost of
health care and more than that in Medicaid if we
went paperless.
The final thing on Medicaid is that it is absolutely
appalling to me that we walk around in this
country with 47 million Americans that don’t have
insurance, and that’s going to go up to 50 million
unless something happens. You are in the role of
governor now, and you look at this situation, and
you look at the number of uninsured in Missouri,
which is around 1 million. You look at that and
first off you ask where they are going to go for
their health care.Well, they are going to go to the
emergency room. And what’s the most expensive
health care cost in the country? Emergency room
visits, right?
We have 47 million Americans whose first stop
for health care is the emergency room, the most
expensive. Does any rational Missourian think
that that is a smart system? If we go back to what I
originally started with about prevention, wouldn’t
it be nice to have somebody notwait until they have
to go to the emergency room but to be able to go
to a community health clinic in Missouri and
have a procedure, get a test done, or have cervical
and breast examinations? So let’s take a look at it.
Let’s fix this problem.
First let’s make an assessment of the many
uninsured that we have in the state, and a good
share of that percentage of that 1 million are eligible
for Medicaid. Instead of sending them to the
emergency room, we can give them a card and the
federal government is going to pay for 55 percent
of the cost. Don’t you think you should go out and
enroll as many of those people that are uninsured
or underinsured that are eligible for Medicaid and
get them on your Medicaid rolls? Governors think
just the opposite. Let’s find ways to get them off, so
let’s send them to the emergency room where its
going to costmoremoney.Who pays for people to go
to the emergency room? Hospitals, the University,
and everybody that has an insurance policy because
everybody pays for part of the uninsured through
their health insurance.
Let’s be smart.We are governors now. Let’s
make an assessment and put those people in
Medicaid wherever we can, and then let’s go out
and do something really revolutionary. Let’s put
all of the uninsured into a class. One third of the
individuals that are uninsured are individuals
between the ages of 18 and 33. It’s a good class,
they just don’t want to bother. I’m not going to get
sick, I’m 18 years of age, I’m 21 years of age. I’m
strong. I’m tough. I don’t want to pay a bill. So onethird
of them don’t have health insurance. Thirty
percent make over $60,000 per year. Insurance
companies like Centene would salivate over the
fact that they can get a million more subscribers
in Missouri under a managed care system.
Let’s be smart. Let’s tear down all the barriers
on health insurance, and anybody that is licensed
like Centene in Missouri can bid on any group,
require the states to put them up for an insurable
class, and allow the Centenes of the world to bid
on them. Don’t allow the state legislature, your
state legislature, or Congress to put any mandates
on what has to be in that policy. Let the private sector
bid on it and you would be absolutely amazed,
ladies and gentlemen, to see how many insurance
companies would come into Missouri, bid against
Centene to cover a million people, like we found
in part D for Medicare. You would be able then to
start covering the uninsured. And I think the uninsured
should be required to have health insurance
in the same way we’re required to have automobile
insurance. You would be able to cover the uninsured
in this way. I would also put a cap on costs
so you could attract small companies to come back
and offer health insurance, which, in this case,
should be put out for re-insurance.
What I’m telling you, ladies and gentlemen, is
that health care is exciting. It is exciting because
of what we can do. It needs the best minds and the
best ideas forMedicaid and for the total health care
system to have it survive and expand and continue.
But if you use my logic and if you use your own
innovative ideas on these types of programs, we
can cover the people in Missouri and we can make
sure they are covered and that they get the best
health care possible. It can be affordable and accessible
for all of your citizens. That’s what we have
to do to save the system and make it better.
Ladies and gentlemen, I want to take your
questions and I’ve already talked longer than I was
supposed to, but I just get pumped up and I’m passionate
about the subject. I just want you to know
that it is exciting to be in health care right now,
and the changes with the new innovations, the
revolutions that are taking place in health care,
are so stimulating and exciting that I can’t imagine
that more people are not involved.
Thank you very much.
FEDERAL RESERVE BANK OF ST. LOUIS REGIONAL ECONOMIC DEVELOPMENT VOLUME 3, NUMBER 1 2007
A word about Medicaid
You may think that Medicaid and Medicare are the
same. Actually, they are two different programs. Medicaid
is a state-run program that provides hospital and medical
coverage for people with low income. Each state has
its own rules about who is eligible and what is covered
under Medicaid. Some people qualify for both Medicare
and Medicaid. For more information about the Medicaid
program, contact your local medical assistance agency,
social services or welfare office.
Who can get Medicare?
Hospital insurance (Part A)
Most people age 65 or older who are citizens or
permanent residents of the United States are eligible for
free Medicare hospital insurance (Part A). You are eligible
at age 65 if:
• You receive or are eligible to receive Social Security
benefits; or
6
• You receive or are eligible to receive railroad retirement
benefits; or
• Your spouse receives or is eligible to receive Social
Security or railroad retirement benefits; or
• You or your spouse (living or deceased, including
divorced spouses) worked long enough in a government
job where Medicare taxes were paid; or
• You are the dependent parent of a fully insured
deceased child.
If you do not meet these requirements, you may be able
to get Medicare hospital insurance by paying a monthly
premium. Usually, you can sign up for this hospital
insurance only during designated enrollment periods.
NOTE: Even though the full retirement age is no longer
65, you should sign up for Medicare three months before
your 65th birthday. You can apply on our website at
www.socialsecurity.gov.
Before age 65, you are eligible for free Medicare hospital
insurance if:
• You have been entitled to Social Security disability
benefits for 24 months; or
• You receive a disability pension from the railroad
retirement board and meet certain conditions; or
• You receive Social Security disability benefits because
you have Lou Gehrig’s disease (amyotrophic lateral
sclerosis); or
• You worked long enough in a government job where
Medicare taxes were paid and you have been entitled to
Social Security disability benefits for 24 months; or
• You are the child or widow(er) age 50 or older, including
a divorced widow(er), of someone who has worked long
enough in a government job where Medicare taxes
were paid and you meet the requirements of the Social
Security disability program; or
7
• You have permanent kidney failure and you receive
maintenance dialysis or a kidney transplant and:
——You are eligible for or receive monthly benefits under
Social Security or the railroad retirement system; or
——You have worked long enough in a Medicare-covered
government job; or
——You are the child or spouse (including a divorced
spouse) of a worker (living or deceased) who has
worked long enough under Social Security or in a
Medicare-covered government job.
Medical insurance (Part B)
Anyone who is eligible for free Medicare hospital
insurance (Part A) can enroll in Medicare medical
insurance (Part B) by paying a monthly premium. Some
beneficiaries with higher incomes will pay a higher
monthly Part B premium. For more information, ask
for Medicare Premiums: Rules For Higher-Income
Beneficiaries (Publication No. 05-10536) or visit
www.socialsecurity.gov/mediinfo.htm.
If you are not eligible for free hospital insurance,
you can buy medical insurance, without having to buy
hospital insurance, if you are age 65 or older and you are—
• A U.S. citizen; or
• A lawfully admitted noncitizen who has lived in the
United States for at least five years.
Medicare Advantage plans (Part C)
If you receive your Part A and Part B benefits directly
from the government you have original Medicare. If
you receive your benefits from a Medicare Advantage
organization or other company approved by Medicare, you
have a Medicare Advantage plan.
If you have Medicare Parts A and B, you can join a
Medicare Advantage plan. Medicare Advantage plans are
offered by private companies that Medicare approves. With
one of these plans, you cannot have a Medigap policy,
8
because Medicare Advantage plans generally cover many
of the same benefits that a Medigap policy would cover,
such as extra days in the hospital after you have used the
number of days that Medicare covers.
Medicare Advantage plans include:
• Medicare managed care plans;
• Medicare preferred provider organization plans;
• Medicare private fee-for-service plans; and
• Medicare specialty plans.
If you decide to join a Medicare Advantage plan, you
use the health card that you get from your Medicare
Advantage plan provider for your health care. Also, you
might have to pay a monthly premium for your Medicare
Advantage plan because of the extra benefits it offers.
People who become newly entitled to Medicare
should enroll during their initial enrollment period (as
explained under Signing up for Medicare on page 10)
or during the annual coordinated election period from
October 15 – December 7 each year. The effective date for
the enrollment is January 1 of the upcoming year. There
also are special enrollment periods for some situations.
Medicare prescription drug plans (Part D)
Anyone who has Medicare hospital insurance (Part
A), medical insurance (Part B) or a Medicare Advantage
plan (Part C) is eligible for prescription drug coverage
(Part D). Joining a Medicare prescription drug plan is
voluntary, and you pay an additional monthly premium
for the coverage. Some beneficiaries with higher incomes
will pay a higher monthly Part D premium. For more
information, ask for Medicare Premiums: Rules For
Higher-Income Beneficiaries (Publication No. 05-10536) or
visit www.socialsecurity.gov/mediinfo.htm. If you do not
enroll in a Medicare drug plan when you are first eligible,
you may pay a late enrollment penalty if you join a plan
later. You will have to pay this penalty for as long as
you have Medicare prescription drug coverage. However,
9
you will not pay a penalty if you have Extra Help (see
below), or another creditable prescription drug plan. To
be creditable, the coverage must be, on average, at least as
good as Medicare prescription coverage.
People who become newly entitled to Medicare should
enroll during their initial enrollment period (as explained
under Signing up for Medicare on page 10). After the
initial enrollment period, the annual coordinated election
period to enroll or make provider changes is October
15 – December 7 each year. The effective date for the
enrollment is January 1 of the upcoming year. There also
are special enrollment periods for some situations.
Help for some low-income people
If you cannot afford to pay your Medicare premiums
and other medical costs, you may be able to get help
from your state. States offer programs for people who are
entitled to Medicare and have low income. The programs
may pay some or all Medicare premiums and also may
pay Medicare deductibles and coinsurance. To qualify, you
must have Part A (hospital insurance) and have limited
income and resources.
You can go online to get more information about these
programs from the Centers for Medicare & Medicaid
Services website. Visit Medicare.gov/publications
and find Get help with your Medicare costs
(Publication No. CMS-10126) at the “Your Medicare
Costs” tab.
Only your state can decide if you qualify for help under
these programs. To find out, contact your state or local
medical assistance (Medicaid) agency, social services or
welfare office.
You also may be able to get Extra Help paying for the
annual deductibles, monthly premiums and prescription
co-payments related to the Medicare prescription drug
program (Part D). You may qualify for Extra Help if you
have limited income (tied to the federal poverty level)
10
and limited resources. These income and resource limits
usually change each year, and you can contact us for the
current numbers.
You automatically qualify and do not need to apply
for Extra Help if you have Medicare and meet one of the
following conditions:
• Have full Medicaid coverage;
• Have Supplemental Security Income (SSI); or
• Participate in a state program that pays your
Medicare premiums.
For more information about getting help with your
prescription drug costs, call Social Security’s toll-free
number or visit our website. You also can apply online at
www.socialsecurity.gov/extrahelp.
You may think that Medicaid and Medicare are the
same. Actually, they are two different programs. Medicaid
is a state-run program that provides hospital and medical
coverage for people with low income. Each state has
its own rules about who is eligible and what is covered
under Medicaid. Some people qualify for both Medicare
and Medicaid. For more information about the Medicaid
program, contact your local medical assistance agency,
social services or welfare office.
Who can get Medicare?
Hospital insurance (Part A)
Most people age 65 or older who are citizens or
permanent residents of the United States are eligible for
free Medicare hospital insurance (Part A). You are eligible
at age 65 if:
• You receive or are eligible to receive Social Security
benefits; or
6
• You receive or are eligible to receive railroad retirement
benefits; or
• Your spouse receives or is eligible to receive Social
Security or railroad retirement benefits; or
• You or your spouse (living or deceased, including
divorced spouses) worked long enough in a government
job where Medicare taxes were paid; or
• You are the dependent parent of a fully insured
deceased child.
If you do not meet these requirements, you may be able
to get Medicare hospital insurance by paying a monthly
premium. Usually, you can sign up for this hospital
insurance only during designated enrollment periods.
NOTE: Even though the full retirement age is no longer
65, you should sign up for Medicare three months before
your 65th birthday. You can apply on our website at
www.socialsecurity.gov.
Before age 65, you are eligible for free Medicare hospital
insurance if:
• You have been entitled to Social Security disability
benefits for 24 months; or
• You receive a disability pension from the railroad
retirement board and meet certain conditions; or
• You receive Social Security disability benefits because
you have Lou Gehrig’s disease (amyotrophic lateral
sclerosis); or
• You worked long enough in a government job where
Medicare taxes were paid and you have been entitled to
Social Security disability benefits for 24 months; or
• You are the child or widow(er) age 50 or older, including
a divorced widow(er), of someone who has worked long
enough in a government job where Medicare taxes
were paid and you meet the requirements of the Social
Security disability program; or
7
• You have permanent kidney failure and you receive
maintenance dialysis or a kidney transplant and:
——You are eligible for or receive monthly benefits under
Social Security or the railroad retirement system; or
——You have worked long enough in a Medicare-covered
government job; or
——You are the child or spouse (including a divorced
spouse) of a worker (living or deceased) who has
worked long enough under Social Security or in a
Medicare-covered government job.
Medical insurance (Part B)
Anyone who is eligible for free Medicare hospital
insurance (Part A) can enroll in Medicare medical
insurance (Part B) by paying a monthly premium. Some
beneficiaries with higher incomes will pay a higher
monthly Part B premium. For more information, ask
for Medicare Premiums: Rules For Higher-Income
Beneficiaries (Publication No. 05-10536) or visit
www.socialsecurity.gov/mediinfo.htm.
If you are not eligible for free hospital insurance,
you can buy medical insurance, without having to buy
hospital insurance, if you are age 65 or older and you are—
• A U.S. citizen; or
• A lawfully admitted noncitizen who has lived in the
United States for at least five years.
Medicare Advantage plans (Part C)
If you receive your Part A and Part B benefits directly
from the government you have original Medicare. If
you receive your benefits from a Medicare Advantage
organization or other company approved by Medicare, you
have a Medicare Advantage plan.
If you have Medicare Parts A and B, you can join a
Medicare Advantage plan. Medicare Advantage plans are
offered by private companies that Medicare approves. With
one of these plans, you cannot have a Medigap policy,
8
because Medicare Advantage plans generally cover many
of the same benefits that a Medigap policy would cover,
such as extra days in the hospital after you have used the
number of days that Medicare covers.
Medicare Advantage plans include:
• Medicare managed care plans;
• Medicare preferred provider organization plans;
• Medicare private fee-for-service plans; and
• Medicare specialty plans.
If you decide to join a Medicare Advantage plan, you
use the health card that you get from your Medicare
Advantage plan provider for your health care. Also, you
might have to pay a monthly premium for your Medicare
Advantage plan because of the extra benefits it offers.
People who become newly entitled to Medicare
should enroll during their initial enrollment period (as
explained under Signing up for Medicare on page 10)
or during the annual coordinated election period from
October 15 – December 7 each year. The effective date for
the enrollment is January 1 of the upcoming year. There
also are special enrollment periods for some situations.
Medicare prescription drug plans (Part D)
Anyone who has Medicare hospital insurance (Part
A), medical insurance (Part B) or a Medicare Advantage
plan (Part C) is eligible for prescription drug coverage
(Part D). Joining a Medicare prescription drug plan is
voluntary, and you pay an additional monthly premium
for the coverage. Some beneficiaries with higher incomes
will pay a higher monthly Part D premium. For more
information, ask for Medicare Premiums: Rules For
Higher-Income Beneficiaries (Publication No. 05-10536) or
visit www.socialsecurity.gov/mediinfo.htm. If you do not
enroll in a Medicare drug plan when you are first eligible,
you may pay a late enrollment penalty if you join a plan
later. You will have to pay this penalty for as long as
you have Medicare prescription drug coverage. However,
9
you will not pay a penalty if you have Extra Help (see
below), or another creditable prescription drug plan. To
be creditable, the coverage must be, on average, at least as
good as Medicare prescription coverage.
People who become newly entitled to Medicare should
enroll during their initial enrollment period (as explained
under Signing up for Medicare on page 10). After the
initial enrollment period, the annual coordinated election
period to enroll or make provider changes is October
15 – December 7 each year. The effective date for the
enrollment is January 1 of the upcoming year. There also
are special enrollment periods for some situations.
Help for some low-income people
If you cannot afford to pay your Medicare premiums
and other medical costs, you may be able to get help
from your state. States offer programs for people who are
entitled to Medicare and have low income. The programs
may pay some or all Medicare premiums and also may
pay Medicare deductibles and coinsurance. To qualify, you
must have Part A (hospital insurance) and have limited
income and resources.
You can go online to get more information about these
programs from the Centers for Medicare & Medicaid
Services website. Visit Medicare.gov/publications
and find Get help with your Medicare costs
(Publication No. CMS-10126) at the “Your Medicare
Costs” tab.
Only your state can decide if you qualify for help under
these programs. To find out, contact your state or local
medical assistance (Medicaid) agency, social services or
welfare office.
You also may be able to get Extra Help paying for the
annual deductibles, monthly premiums and prescription
co-payments related to the Medicare prescription drug
program (Part D). You may qualify for Extra Help if you
have limited income (tied to the federal poverty level)
10
and limited resources. These income and resource limits
usually change each year, and you can contact us for the
current numbers.
You automatically qualify and do not need to apply
for Extra Help if you have Medicare and meet one of the
following conditions:
• Have full Medicaid coverage;
• Have Supplemental Security Income (SSI); or
• Participate in a state program that pays your
Medicare premiums.
For more information about getting help with your
prescription drug costs, call Social Security’s toll-free
number or visit our website. You also can apply online at
www.socialsecurity.gov/extrahelp.
Signing up for Medicare
When should I apply?
If you are already getting Social Security retirement or
disability benefits or railroad retirement checks, you will
be contacted a few months before you become eligible for
Medicare and given the information you need. If you live
in one of the 50 states, Washington, D.C., the Northern
Mariana Islands, Guam, American Samoa or the Virgin
Islands, you will be enrolled in Medicare Parts A and B
automatically. However, because you must pay a premium
for Part B coverage, you have the option of turning it down.
NOTE: Residents of Puerto Rico or foreign countries will
not receive Part B automatically. They must elect this benefit.
If you are not already getting retirement or disability
benefits, you should contact us about three months before
your 65th birthday to sign up for Medicare. You can sign
up for Medicare even if you do not plan to retire at age 65.
Once you are enrolled in Medicare, you will receive
a red, white and blue Medicare card showing whether
you have Part A, Part B or both. Keep your card in a safe
11
place so you will have it when you need it. If your card
is ever lost or stolen, you can apply for a replacement
card on the Internet at www.socialsecurity.gov or call
Social Security’s toll-free number. You also will receive a
Medicare & You handbook (Publication No. CMS-10050)
that describes your Medicare benefits and plan choices.
Special enrollment situations
You also should contact Social Security about applying
for Medicare if:
• You are a disabled widow or widower between age 50
and age 65, but have not applied for disability benefits
because you are already getting another kind of Social
Security benefit;
• You are a government employee and became disabled
before age 65;
• You, your spouse or your dependent child has permanent
kidney failure;
• You had Medicare medical insurance in the past but
dropped the coverage;
• You turned down Medicare medical insurance when you
became entitled to hospital insurance (Part A); or
• You or your spouse worked for the railroad industry.
Initial enrollment period for Part B
When you first become eligible for hospital insurance
(Part A), you have a seven-month period (your initial
enrollment period) in which to sign up for medical
insurance (Part B). A delay on your part will cause a
delay in coverage and result in higher premiums. If you
are eligible at age 65, your initial enrollment period
begins three months before your 65th birthday, includes
the month you turn age 65 and ends three months after
that birthday. If you are eligible for Medicare based
on disability or permanent kidney failure, your initial
enrollment period depends on the date your disability or
treatment began.
12
When does my enrollment in Part B become
effective?
If you accept the automatic enrollment in Medicare Part
B, or if you enroll in Medicare Part B during the first three
months of your initial enrollment period, your medical
insurance protection will start with the month you are
first eligible. If you enroll during the last four months,
your protection will start from one to three months after
you enroll.
The following chart shows when your Medicare Part B
becomes effective:
If you enroll in this month of
your initial enrollment period:
Then your Part B Medicare
coverage starts:
One to three months before you
reach age 65 The month you reach age 65
The month you reach age 65 One month after the month you
reach age 65
One month after you reach age 65 Two months after the month of
enrollment
Two or three months after you
reach age 65
Three months after the month of
enrollment
General enrollment period for Part B
If you do not enroll in Medicare Part B during your
initial enrollment period, you have another chance each
year to sign up during a “general enrollment period” from
January 1 through March 31. Your coverage begins on July
1 of the year you enroll. However, your monthly premium
increases 10 percent for each 12-month period you were
eligible for, but did not enroll in, Medicare Part B.
13
Special enrollment period for people leaving Part C
If you have a Medicare Advantage plan (Part C), you
can leave your plan and switch to original Medicare from
January 1 through February 14. If you use this option, you
also have until February 14 to join a Medicare prescription
drug plan. Your coverage begins the first day of the month
after the plan gets your enrollment form.
Special enrollment period for people covered under
an employer group health plan
If you are 65 or older and are covered under a group
health plan, either from your own or your spouse’s current
employment, you have a “special enrollment period” in
which to sign up for Medicare Part B. This means that you
may delay enrolling in Medicare Part B without having
to wait for a general enrollment period and paying the 10
percent premium surcharge for late enrollment. The rules
allow you to:
• Enroll in Medicare Part B any time while you are
still covered by a group health plan based on current
employment; or
• Enroll in Medicare Part B during the eight-month period
that begins the month after the employment ends or the
group health coverage ends, whichever happens first.
Special enrollment period rules do not apply if
employment or employer-provided group health plan
coverage ends during your initial enrollment period.
When you enroll in Medicare Part B while you are
still in the group health plan or during the first full
month when you are no longer in the plan, your coverage
begins either:
• On the first day of the month you enroll; or
• At your option, on the first day of any of the following
three months.
If you enroll during any of the remaining seven months
of the “special enrollment period,” your Medicare Part B
coverage begins on the first day of the following month.
14
If you do not enroll by the end of the eight-month
period, you will have to wait until the next general
enrollment period, which begins January 1 of the next
year. You also may have to pay a higher premium, as
described previously.
People who receive Social Security disability benefits
and are covered under a group health plan from either
their own or a family member’s current employment also
have a special enrollment period and premium rights that
are similar to those for workers age 65 or older.
Options for receiving health services
Medicare beneficiaries may have choices for receiving
health care services.
You can get more information about your health care
options from the following publications:
• Medicare & You (Publication No. CMS-10050)—This
general guide is mailed to people after they enroll in
Medicare and an updated version is mailed each year
after that.
• Choosing a Medigap Policy: A Guide to
Health Insurance for People with Medicare
(Publication No. CMS-02110)—This guide describes
how other health insurance plans supplement Medicare
and offers some shopping hints for people looking at
those plans.
To get a copy of these publications, visit
Medicare.gov/publications or call the toll-free number,
1-800-MEDICARE (1-800-633-4227). If you are deaf or
hard of hearing, call TTY 1-877-486-2048.
15
If you have other health insurance
Medicare hospital insurance is free for almost everyone,
but you do pay a monthly premium for medical insurance.
If you already have other health insurance when you
become eligible for Medicare, is it worth the monthly
premium cost to sign up for Medicare medical insurance?
The answer varies with each person and the kind of
other health insurance you may have. Although we cannot
give you “yes” or “no” answers, we can offer information
that may be helpful when you make your decision.
If you have a private insurance plan
Get in touch with your insurance agent to see how your
private plan fits with Medicare medical insurance. This
is especially important if you have family members who
are covered under the same policy. And remember, just as
Medicare does not cover all health services, most private
plans do not either. In planning your health insurance
coverage, keep in mind that most nursing home care is not
covered by Medicare or private health insurance policies.
One important word of caution: for your own protection,
do not cancel any health insurance you now have until
your Medicare coverage actually begins.
If you have insurance from an employer-provided
group health plan
Group health plans of employers with 20 or more
employees are required by law to offer workers and their
spouses who are age 65 (or older) the same health benefits
that are provided to younger employees.
If you are currently covered under an employer-provided
group health plan, you should talk to your personnel office
before you sign up for Medicare medical insurance.
16
If you have health care protection from other plans
If you have TRICARE coverage from the Department
of Defense, your health benefits may change or end when
you become eligible for Medicare. You should contact
a military health benefits advisor or call the Defense
Manpower Data Center, toll-free at 1-800-467-5526
before you decide whether to enroll in Medicare medical
insurance (Part B).
If you have health care protection from the Indian
Health Service, Department of Veterans Affairs or a state
medical assistance program, contact the people in those
offices to help you decide whether it is to your advantage
to have Medicare medical insurance.
For more information on how other health
insurance plans work with Medicare, visit
Medicare.gov/publications to view the booklet Medicare
and Other Health Benefits: Your Guide to Who Pays First
(Publication No. CMS-02179) or call the Medicare toll-free
number, 1-800-MEDICARE (1-800-633-4227). If you are
deaf or hard of hearing, call TTY 1-877-486-2048.
When should I apply?
If you are already getting Social Security retirement or
disability benefits or railroad retirement checks, you will
be contacted a few months before you become eligible for
Medicare and given the information you need. If you live
in one of the 50 states, Washington, D.C., the Northern
Mariana Islands, Guam, American Samoa or the Virgin
Islands, you will be enrolled in Medicare Parts A and B
automatically. However, because you must pay a premium
for Part B coverage, you have the option of turning it down.
NOTE: Residents of Puerto Rico or foreign countries will
not receive Part B automatically. They must elect this benefit.
If you are not already getting retirement or disability
benefits, you should contact us about three months before
your 65th birthday to sign up for Medicare. You can sign
up for Medicare even if you do not plan to retire at age 65.
Once you are enrolled in Medicare, you will receive
a red, white and blue Medicare card showing whether
you have Part A, Part B or both. Keep your card in a safe
11
place so you will have it when you need it. If your card
is ever lost or stolen, you can apply for a replacement
card on the Internet at www.socialsecurity.gov or call
Social Security’s toll-free number. You also will receive a
Medicare & You handbook (Publication No. CMS-10050)
that describes your Medicare benefits and plan choices.
Special enrollment situations
You also should contact Social Security about applying
for Medicare if:
• You are a disabled widow or widower between age 50
and age 65, but have not applied for disability benefits
because you are already getting another kind of Social
Security benefit;
• You are a government employee and became disabled
before age 65;
• You, your spouse or your dependent child has permanent
kidney failure;
• You had Medicare medical insurance in the past but
dropped the coverage;
• You turned down Medicare medical insurance when you
became entitled to hospital insurance (Part A); or
• You or your spouse worked for the railroad industry.
Initial enrollment period for Part B
When you first become eligible for hospital insurance
(Part A), you have a seven-month period (your initial
enrollment period) in which to sign up for medical
insurance (Part B). A delay on your part will cause a
delay in coverage and result in higher premiums. If you
are eligible at age 65, your initial enrollment period
begins three months before your 65th birthday, includes
the month you turn age 65 and ends three months after
that birthday. If you are eligible for Medicare based
on disability or permanent kidney failure, your initial
enrollment period depends on the date your disability or
treatment began.
12
When does my enrollment in Part B become
effective?
If you accept the automatic enrollment in Medicare Part
B, or if you enroll in Medicare Part B during the first three
months of your initial enrollment period, your medical
insurance protection will start with the month you are
first eligible. If you enroll during the last four months,
your protection will start from one to three months after
you enroll.
The following chart shows when your Medicare Part B
becomes effective:
If you enroll in this month of
your initial enrollment period:
Then your Part B Medicare
coverage starts:
One to three months before you
reach age 65 The month you reach age 65
The month you reach age 65 One month after the month you
reach age 65
One month after you reach age 65 Two months after the month of
enrollment
Two or three months after you
reach age 65
Three months after the month of
enrollment
General enrollment period for Part B
If you do not enroll in Medicare Part B during your
initial enrollment period, you have another chance each
year to sign up during a “general enrollment period” from
January 1 through March 31. Your coverage begins on July
1 of the year you enroll. However, your monthly premium
increases 10 percent for each 12-month period you were
eligible for, but did not enroll in, Medicare Part B.
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Special enrollment period for people leaving Part C
If you have a Medicare Advantage plan (Part C), you
can leave your plan and switch to original Medicare from
January 1 through February 14. If you use this option, you
also have until February 14 to join a Medicare prescription
drug plan. Your coverage begins the first day of the month
after the plan gets your enrollment form.
Special enrollment period for people covered under
an employer group health plan
If you are 65 or older and are covered under a group
health plan, either from your own or your spouse’s current
employment, you have a “special enrollment period” in
which to sign up for Medicare Part B. This means that you
may delay enrolling in Medicare Part B without having
to wait for a general enrollment period and paying the 10
percent premium surcharge for late enrollment. The rules
allow you to:
• Enroll in Medicare Part B any time while you are
still covered by a group health plan based on current
employment; or
• Enroll in Medicare Part B during the eight-month period
that begins the month after the employment ends or the
group health coverage ends, whichever happens first.
Special enrollment period rules do not apply if
employment or employer-provided group health plan
coverage ends during your initial enrollment period.
When you enroll in Medicare Part B while you are
still in the group health plan or during the first full
month when you are no longer in the plan, your coverage
begins either:
• On the first day of the month you enroll; or
• At your option, on the first day of any of the following
three months.
If you enroll during any of the remaining seven months
of the “special enrollment period,” your Medicare Part B
coverage begins on the first day of the following month.
14
If you do not enroll by the end of the eight-month
period, you will have to wait until the next general
enrollment period, which begins January 1 of the next
year. You also may have to pay a higher premium, as
described previously.
People who receive Social Security disability benefits
and are covered under a group health plan from either
their own or a family member’s current employment also
have a special enrollment period and premium rights that
are similar to those for workers age 65 or older.
Options for receiving health services
Medicare beneficiaries may have choices for receiving
health care services.
You can get more information about your health care
options from the following publications:
• Medicare & You (Publication No. CMS-10050)—This
general guide is mailed to people after they enroll in
Medicare and an updated version is mailed each year
after that.
• Choosing a Medigap Policy: A Guide to
Health Insurance for People with Medicare
(Publication No. CMS-02110)—This guide describes
how other health insurance plans supplement Medicare
and offers some shopping hints for people looking at
those plans.
To get a copy of these publications, visit
Medicare.gov/publications or call the toll-free number,
1-800-MEDICARE (1-800-633-4227). If you are deaf or
hard of hearing, call TTY 1-877-486-2048.
15
If you have other health insurance
Medicare hospital insurance is free for almost everyone,
but you do pay a monthly premium for medical insurance.
If you already have other health insurance when you
become eligible for Medicare, is it worth the monthly
premium cost to sign up for Medicare medical insurance?
The answer varies with each person and the kind of
other health insurance you may have. Although we cannot
give you “yes” or “no” answers, we can offer information
that may be helpful when you make your decision.
If you have a private insurance plan
Get in touch with your insurance agent to see how your
private plan fits with Medicare medical insurance. This
is especially important if you have family members who
are covered under the same policy. And remember, just as
Medicare does not cover all health services, most private
plans do not either. In planning your health insurance
coverage, keep in mind that most nursing home care is not
covered by Medicare or private health insurance policies.
One important word of caution: for your own protection,
do not cancel any health insurance you now have until
your Medicare coverage actually begins.
If you have insurance from an employer-provided
group health plan
Group health plans of employers with 20 or more
employees are required by law to offer workers and their
spouses who are age 65 (or older) the same health benefits
that are provided to younger employees.
If you are currently covered under an employer-provided
group health plan, you should talk to your personnel office
before you sign up for Medicare medical insurance.
16
If you have health care protection from other plans
If you have TRICARE coverage from the Department
of Defense, your health benefits may change or end when
you become eligible for Medicare. You should contact
a military health benefits advisor or call the Defense
Manpower Data Center, toll-free at 1-800-467-5526
before you decide whether to enroll in Medicare medical
insurance (Part B).
If you have health care protection from the Indian
Health Service, Department of Veterans Affairs or a state
medical assistance program, contact the people in those
offices to help you decide whether it is to your advantage
to have Medicare medical insurance.
For more information on how other health
insurance plans work with Medicare, visit
Medicare.gov/publications to view the booklet Medicare
and Other Health Benefits: Your Guide to Who Pays First
(Publication No. CMS-02179) or call the Medicare toll-free
number, 1-800-MEDICARE (1-800-633-4227). If you are
deaf or hard of hearing, call TTY 1-877-486-2048.
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