Understanding Medicare’s Four Components and How They Apply to Long-Term Care Facilities
Jeannine LeCompte, Compliance Research Specialist
Medicare—the federal health insurance program for people 65 or older (or younger people with certain types of disabilities)—is an important component of the long-term care (LTC) sector. It is therefore a core operating principle to ensure that all residents qualify for enrollment in the program—as illegal enrollments can have serious financial and legal consequences.
To be eligible for enrollment, a resident must first meet one of the following two requirements:
- They must be age 65 or older; or
- They must have received disability benefits for 25 or more months. Exceptions include people who have end-stage renal disease (ESRD) or amyotrophic lateral sclerosis (ALS). Such individuals qualify for eligibility nearly immediately after being diagnosed.
In addition to meeting one of these two rules, the resident must be able to meet citizenship and residency requirements—which means that they must be US citizens or permanent residents.
Medicare is provided in four separate components, or “parts.”
“Part A” deals with hospital insurance, and helps cover inpatient care in hospitals, skilled nursing facility care, hospice care, and home healthcare. This part is, obviously, the most applicable to the LTC sector.
“Part B” deals with medical insurance, and helps cover services from doctors and other healthcare providers, outpatient care, home healthcare, durable medical equipment (wheelchairs, walkers, hospital beds, and other equipment and supplies), and preventive services (such as screenings, shots, and annual “Wellness” visits).
“Part C,” also known as “Medicare Advantage,” is an “all in one” alternative to original Medicare. These bundled plans include Part A, Part B, and usually Part D. Some plans may have lower out-of-pocket costs than original Medicare, and some plans offer extra benefits that original Medicare doesn’t cover— like vision, hearing, or dental coverage.
“Part D” deals with prescription drug coverage, and helps cover the cost of prescription drugs. “Part D” plans are run by private insurance companies that follow rules set by Medicare.
Individuals who may be enrolled in Medicare Advantage have all the benefits of Medicare, but some plans may apply different rules, costs, and restrictions which can affect how and when care can be received.
All LTC administrators should bear in mind that a resident who is enrolled in Parts A and B is likely to also have Part D for prescription drug coverage. Furthermore, if a resident is enrolled in Part C, they will not have Parts A or B, but they may have Part D—if their Part C does not include Part D as part of a bundled plan.
