The federal government plays an important role in providing health insurance benefits. Health insurance is provided through Social Security. Disability income coverage is available to all fully insured workers. Medical expense reimbursement coverage is offered to everyone over age 65, anyone who qualifies for Social Security disability payments and anyone on dialysis. The federal government administers 3 types of health coverage: •Disability Income Coverage •Medical Expense Reimbursement Coverage •Coverage for Military

The federal Social Security system was created in the 1930s to serve as a base upon which the private sector was expected to build a more substantial program of personal savings and insurance protection. Social Security is an entitlement, which means that every working American who contributes can expect to receive some benefits out of it. The program is known as OASDHI, which stands for Old Age, Survivors, Disability and Health Insurance. OASDHI is funded by payroll taxes paid by employers and employees. The tax is deducted from a worker's earnings, up to a maximum level known as the maximum taxable wage base.

Before a person will qualify for any Social Security benefits, he/she must be at least currently insured. To be currently insured, a person needs a minimum of six credits in the preceding thirteen quarters. This means the person must have been working and paying OASDHI taxes for at least 6 of the last 13 calendar quarters. To be fully insured and thus eligible for disability and retirement benefits, a person must have forty credits. A person can earn no more than four Social Security credits in a calendar year.

Disability insurance provided through OASDHI is based on requirements that are much more stringent than those found in commercial disability income policies. To qualify for Social Security disability benefits, the insured worker’s disability must be expected to last at least 12 months or result in death and prevent him/her from engaging in any gainful activity or occupation. There is also a five month waiting period before benefits commence (payments begin in the sixth month following the onset of the disability). Medicare is the "H" in OASDHI. Medicare is a four part program; Part A, B, C and D.

Individuals are eligible for Part A Medicare benefits as of the first day of the month in which they attain age 65, or if they are on dialysis or eligible for Social Security disability benefits. When an individual is eligible for coverage under an employer's plan as well as under Medicare, Medicare may be the secondary payer to any group health plan provided by an employer. Part A provides coverage for inpatient hospital services, post-hospital skilled nursing care, and post-hospital home health services during recovery. Part A does not cover physicians' services.

Enrollment in Part A is automatic for individuals entitled to Social Security benefits. These persons are eligible for Part A benefits on the first day of the month in which they attain age 65. Part A provides coverage for four different kinds of care: • Inpatient hospital care • Skilled nursing • Home health care • Hospice care

Inpatient Hospital Care Medicare’s inpatient hospital care benefit helps pay the reasonable charges that result from hospitalization in a semi-private room for medically necessary care. This coverage includes meals, regular nursing services, special care units, drugs taken in the hospital, tests, medical supplies, operating room, and other supplies and services. Medicare covers up to 90 days of inpatient hospital services in each "benefit period," plus an additional 60 "lifetime reserve days."

A benefit period begins when a beneficiary is admitted to the hospital and ends when the beneficiary has been out of the hospital for 60 days, or has not received Medicare-covered care in a skilled nursing facility for 60 consecutive days. These 60 lifetime reserve days can be used only once. (Very few people remain in a hospital for 150 consecutive days. In the rare event this happens, every Medigap policy contains a benefit for an additional 365 hospital lifetime days.)

Skilled Nursing Care Medicare defines the skilled nursing facility benefit quite narrowly. The patient must be receiving medically necessary services provided by a skilled staff in a Medicare-approved facility, following a prior hospital stay of at least 3 days. The care must be performed by or under the supervision of licensed nursing personnel under a doctor’s orders. Any type of custodial, as opposed to skilled, nursing care is not covered. Medicare covers up to 100 days of care in a skilled nursing facility for each benefit period if all of Medicare's requirements are met.

Home Health Care Medicare covers up to 100 home health visits per spell of illness following a hospital stay under the Part A benefit. If a patient is confined at home, the home health care benefit provides for certain services performed by a participating home health care agency. This may be a public or private agency that provides skilled nursing or therapeutic services in the home.

Eligible expenses include: •Intermittent part-time nursing care •Physical, occupational, or speech therapy •Home health aides •Medical social services •Medical supplies •Certain durable medical equipment, such as wheelchairs or hospital beds

Hospice Care A hospice is organized primarily for the purpose of providing support services to terminally ill patients and their families. For terminally ill patients, the hospice care benefit provides inpatient and outpatient hospice care. What Part A Does Not Cover •Private duty nursing •Charges for a private room, unless medically necessary •Conveniences, such as a telephone or television in a hospital room •The first three pints of blood received during a calendar year

Medicare Part B Medicare Part B is available to anyone covered under Part A. Medicare Part B provides coverage for doctors’ services and outpatient medical services and supplies. Part B is optional and requires subscribers to pay a monthly premium, deductibles and a 20% co-pay on all charges for covered services. Part B pays (up to certain limits) for professional medical services and other services if prescribed by a physician. While enrollment in Part B is voluntary, when individuals become eligible for Part A they will be enrolled and their premium payment established unless they sign a

form indicating they do not want the Part B coverage. People who choose not to enroll in Part B during their initial enrollment period, may do so later. An open enrollment period occurs each year from January 1st through March 31st. When enrollment occurs during this period, coverage begins on July 1st. The most common reason to “opt out” of Part B coverage is that the individual is still working and covered by a group plan; but employers with fewer than 20 employees may disqualify an employee from group plan eligibility if they are eligible for Medicare. Part B covers most physician’s services

and supplies furnished as part of such services. Some of the specific covered services include: •Office visits and house calls •Radiological and pathological services •Medical supplies furnished as part of a physician’s professional services •Second opinions before surgery •Diagnostic tests •Services of the doctor’s office nurse •Physical and occupational therapy •Outpatient clinic services •Emergency room services •X-rays •Medically necessary ambulance services •Artificial limbs and eyes

What Part B Does Not Cover: •Routine physical exams •Eye exams, eyeglasses or contacts •Hearing exams, fitting of hearing aids •Most immunizations •Routine foot care •Cosmetic surgery •Skilled nursing home care costs over 100 days per benefit period •Physician charges above Medicare’s approved amount •Care received outside the United States •Custodial care received in the home •Acupuncture •Orthopedic shoes •The first 3 pints of blood in a transfusion

Medicare Part C Advantage Plans Many HMOs and PPOs have contracted with the federal government to offer Medicare advantage plans. These plans often provide for broader benefits than Part A and Part B combined. Medicare beneficiaries who have Part A and Part B can join one of many Part C plans and receive Medicare covered benefits through the plan. In addition to the monthly Medicare Part B premiums, Medicare advantage plan subscribers pay an additional premium for the extra benefits the advantage plan offers. The benefits of Part C include elimination of the need to purchase a Medicare supplement (Medi-Gap) policy, since