Medicare eligibility and entitlement
Medicare is a federal health insurance program, that provides coverage for people 65 and older certain disabled people, and for those with end stage renal disease.
In 1965, Congress enacted into law the Medicare program through Title XVIII (18) of the Federal Social Security Act. The Medicare program is managed by CMS, which is a branch of the Department of Health and Human Services of the U.S. Federal Government.
Although there have been changes to benefits and certain administration activities (e.g., privacy, security, etc.), the Medicare program had not undergone significant modernization until 2003. In December 2003, Congress passed the Medicare Prescription Drug, Improvement, and Modernization Act (MMA) of 2003. The landmark legislation gave seniors and individuals with disabilities a prescription drug benefit, more choices, and better benefits under Medicare. Under section 911 of the MMA, Congress required CMS to replace the Fiscal Intermediary and Carrier contractors with Medicare administrative contractors (MACs).
A MAC is responsible for the receipt, processing, and payment of Medicare Part A and Part B fee-for-service claims. In addition, the MAC serves as the primary contact for physicians and institutional providers, and performs the following functions:
- Appeals
- Provider outreach and education
- Financial management
- Provider enrollment
- Reimbursement
- Payment safeguards
- Information systems security
Traditional Medicare - Part A and Part B
A fee-for-service plan managed by the federal government and administered by the MACs. In traditional Medicare, people with Medicare Part A (hospital coverage) and Part B (medical coverage) can get all medically necessary Medicare-covered services and preventive services.
Hospital insurance - Part A
This coverage helps pay for inpatient hospital care, some inpatient care in a skilled nursing facility, some home healthcare, and hospice care.
Medical insurance - Part B
This coverage helps pay for medical and surgical services by physicians, as well as certain other health benefits such as ambulance transportation, durable medical equipment, outpatient hospital services, and independent laboratory services. It complements the coverage provided by Part A.
Medicare Advantage Plan - Part C
Medicare Part C, which is also known as Medicare Advantage, is a plan offered by private insurance companies to people with Medicare, giving them more choices. Everyone who has Medicare Parts A and B is eligible, except those who have end stage renal disease, and were not in a Medicare Advantage plan at the onset of this condition.
These plans provide both Part A and Part B benefits and include:
- Medicare health maintenance organization (HMO)
- Preferred provider organizations (PPO)
- Private fee-for-service plans
- Medicare special needs plans
Medicare prescription drug coverage - Part D
Medicare Part D is an optional prescription drug benefit for individuals who are entitled to Medicare benefits under Part A or enrolled in Medicare benefits under Part B.
Coverage is offered by many Medicare health plans (Medicare Advantage Plans and Medicare Cost Plans) and by standalone Medicare Prescription Drug Plans. These health plans provide their own insurance identification cards, which may change from year to year.
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