MEDICARE: ELIGIBILITY

Part A, the hospital portion of Medicare, is available to any person aged 65 or older as long as the person is entitled to monthly retirement benefits under Social Security or the railroad retirement program. Civilian employees of the federal government aged 65 or older are also eligible. It is not necessary for these workers to actually be receiving retirement benefits, but they must be fully insured for purposes of retirement benefits. The following persons are also eligible for Part A of Medicare at no monthly cost:

Persons aged 65 or older who are dependents of fully insured workers aged 62 or older.

Survivors aged 65 or older who are eligible for Social Security survivors benefits.

Disabled persons at any age who have been eligible to receive Social Security benefits for two years because of their disability. This includes workers under age 65, disabled widows and widowers aged 50 or over, and children 18 or older who were disabled prior to age 22.

Workers who are either fully or currently insured and their spouses and dependent children with end-stage renal (kidney) disease who require renal dialysis or kidney transplants. Coverage begins either the first day of the third month after dialysis begins or earlier for admission to a hospital for kidney-transplant surgery.

Most persons aged 65 or over who do not meet the previously discussed eligibility requirements may voluntarily enroll in Medicare. However, they must pay a monthly Part A premium and also enroll in Part B. The monthly Part A premium may be as high as $300 in 2001, depending on the quarters of coverage a person earned under Social Security. The premium is adjusted annually to reflect the full cost of the benefits provided.

Any person eligible for Part A of Medicare is also eligible for Part B. A monthly premium must be paid for Part B. This premium, $50.00 in 2001, is adjusted annually and represents only about 25 percent of the cost of the benefits provided. The remaining cost of the program is financed from the general revenues of the federal government.

Persons receiving Social Security or railroad retirement benefits are automatically enrolled in Medicare if they are eligible. If they do not want Part B, they must reject it in writing. Other persons eligible for Medicare must apply for benefits. As a general rule, anyone who rejects Part B or who does not enroll when initially eligible may later apply for benefits during a general enrollment period that occurs between January 1 and March 31 of each year. However, the monthly premium is increased by 10 percent for each 12-month period during which the person was eligible but failed to enroll.

Medicare secondary rules make employer-provided medical expense coverage primary to Medicare for certain classes of individuals who are over 65, who are disabled, or who are suffering end-stage renal disease. These persons (and any other Medicare-eligible persons still covered as active employees under their employer's plans) may not wish to elect Medicare because it largely constitutes duplicate coverage. When their employer-provided coverage ends, these persons have a seven-month special enrollment period to elect Part B coverage, and the late enrollment penalty is waived.

Medicare is also secondary to benefits received by persons (1) entitled to veterans' or black-lung benefits, (2) covered by workers' compensation laws, or (3) whose medical expenses are paid under no-fault or liability insurance.