Railroad Retirement Handbook
Chapter 4: Health Insurance for the Aged and Disabled
Amendments to the Social Security Act enacted in 1965 established a broad program of health insurance, known popularly as "Medicare," for people age 65 or older, including railroad workers and members of their families. Part A provides hospital insurance and related benefits financed through payroll taxes. Part B provides medical insurance benefits on a voluntary basis, with the cost shared by the participants and the Federal Government. Both parts of the program have been modified and liberalized several times since 1967, principally in the 1973 extension of coverage to persons under age 65 who are totally disabled or have permanent kidney failure. In 2003, legislation was enacted which provided prescription drug coverage for Medicare beneficiaries beginning in 2006, among other changes.
Persons covered by the railroad retirement system participate in Medicare on the same basis as those under the social security system. Amendments to the railroad retirement laws in 1965 and to the social security laws in 1972 gave the RRB an important role in the administration of the health insurance program and made possible the collection of hospital insurance taxes on the same basis as retirement taxes under the Railroad Retirement Tax Act. The 1965 amendments also empowered the RRB to make payments from the Railroad Retirement Account for hospital insurance services provided anywhere in Canada to persons receiving or qualified to receive railroad retirement benefits. Such payments apply only to the charges in excess of the amounts payable for hospital and related services under Canadian public health insurance laws.
Social security legislation in 1972 gave the RRB direct legislative authority to collect Medicare premiums from railroad retirement beneficiaries and to select a carrier to process medical insurance claims for all railroad retirement beneficiaries. Previously, authority in these areas had been delegated to the RRB by the Social Security Administration.
All railroad retirement beneficiaries age 65 or over and other persons who are directly or potentially eligible for railroad retirement benefits are covered by the program. Although the age requirements for some unreduced railroad retirement benefits have risen just like the social security requirements, beneficiaries are still eligible for Medicare at age 65. Coverage before age 65 is available for disabled employee annuitants who have been entitled to monthly benefits based on total disability for at least 24 months and have a disability insured status under social security law. There is no 24-month waiting period for those who have ALS (Amyotrophic Lateral Sclerosis), also known as Lou Gehrig's disease. If entitled to monthly benefits based on an occupational disability, and the individual has been granted a disability freeze, he or she is eligible for Medicare 29 months after the freeze date. If receiving benefits due to occupational disability and the person has not been granted a disability freeze, he or she is generally eligible for Medicare at age 65. The standards for a disability freeze determination follow social security law and are comparable to the medical criteria for granting total disability. Disabled widow(er)s under 65, disabled surviving divorced spouses under 65, and disabled children may also be eligible for Medicare, usually after a 24-month waiting period.
Medicare coverage at any age on the basis of permanent kidney failure is also available to employee annuitants, employees who have not retired but meet certain minimum service requirements, spouses, and dependent children who suffer from permanent kidney failure requiring hemodialysis or a kidney transplant. The Social Security Administration has jurisdiction of Medicare for those eligible on the basis of permanent kidney failure.
If a retired employee or a family member is receiving a railroad retirement annuity, enrollment for both hospital and medical insurance is generally automatic and coverage begins when the person reaches age 65. For beneficiaries who are totally and permanently disabled, Medicare hospital and medical insurance starts automatically with the 30th month after the beneficiary became disabled or, if later, the 25th month after the beneficiary became entitled to monthly benefits. Even though enrollment is automatic, an individual may decline medical insurance, if so desired; this does not preclude him or her from applying for medical insurance at a later date. Premiums may be higher if enrollment is delayed.
If an individual is eligible for but not receiving an annuity, he or she should contact an RRB office before attaining age 65 and apply for both hospital and medical insurance. (This does not mean that the individual must retire if presently working.) The best time to apply is during the 3 months before the month in which the individual reaches age 65. He or she will then have both hospital and medical insurance protection beginning with the month age 65 is reached. If the individual does not enroll for medical insurance in the 3 months before attaining age 65, he or she can enroll in the month age 65 is reached or during the next 3 months, but there will be a delay of 1 to 3 months before medical insurance is effective. Individuals who do not enroll during this Initial Enrollment Period may sign up in any General Enrollment Period (January 1 - March 31 each year). Coverage for such individuals begins July 1 of the year of enrollment.
Premiums for medical insurance are increased 10 percent for each 12-month period the individual could have been, but was not, enrolled. However, individuals age 65 or older who wait to enroll in Part B because they have group health plan coverage based on their own or their spouse's current employment may not have to pay higher premiums because they may be eligible for special enrollment periods. The same special enrollment period rules apply to disabled individuals, except that the group health insurance may be based on the current employment of the individual, his or her spouse, or a family member.
Individuals deciding when to enroll in Medicare Part B must consider how this will affect eligibility for health insurance policies which supplement Medicare coverage. These include "Medigap" insurance and prescription drug coverage and are explained later in this chapter.
For information on coverage for kidney disease, a social security office should be contacted.
The hospital insurance program is designed to help pay the bills when an insured person is hospitalized. The program also provides payments for required professional services in a skilled nursing facility (but not for custodial care) following a hospital stay, home health services, and hospice care.
Benefits under this program cover medically necessary care in hospitals and skilled nursing facilities, home health visits and hospice care. Coverage also includes blood, after the first three pints, when the person is an inpatient at a hospital or skilled nursing facility during a covered stay.
There is a limit on how many days of hospital or skilled nursing care Medicare helps pay for in each "benefit period." A benefit period begins the day a patient goes to a hospital or skilled nursing facility. It ends after a person has not received any hospital or skilled nursing care for 60 days in a row. There is no limit to the number of benefit periods a person can have.
Benefits are ordinarily paid only for services received in the United States or Canada. Hospital insurance also covers hospital stays in Mexico under very limited conditions.
What Medicare Part A Covers
- If a patient is hospitalized, Medicare will pay for all covered hospital services during the first 60 days of a benefit period except for a deductible. From the 61st through the 90th day, Medicare hospital insurance pays for all covered services except for a coinsurance charge. A lifetime reserve of 60 days may be used if a patient is in the hospital for more than 90 days in a benefit period; the patient pays a coinsurance charge for these additional days. Covered hospital services include almost all those ordinarily furnished by a hospital to its patients. (More information on specific services is available by calling 1-800-MEDICARE (1-800-633-4227) or by visiting www.medicare.gov. However, payments will not be made for private-duty nursing or personal comfort items. Inpatient psychiatric hospital services are covered, but there is a lifetime limitation of 190 days.
- Under certain conditions, the cost of skilled nursing care in a facility approved by Medicare for services of a professional level (not custodial care) is covered for the first 20 days in each benefit period plus up to 80 additional days with the patient paying a coinsurance charge for the 21st through the 100th day. These benefits are payable only if the patient was in a hospital for at least 3 days in a row, not counting the day of discharge, before transferring to a skilled nursing facility.
- Under certain conditions, Medicare pays the cost of medically necessary home health care. This is limited to reasonable and necessary part-time or intermittent skilled nursing care and home health aide services as well as physical therapy, occupational therapy, and speech-language therapy which are ordered by a doctor. It also includes medical social services, durable medical equipment (such as wheelchairs, hospital beds, oxygen, and walkers), medical supplies, and other services.
- Hospice care is a service provided to terminally-ill persons. It includes drugs for symptom control and pain relief, medical and support services from a Medicare-approved hospice, and other services not otherwise covered by Medicare.
Railroad employers and employees each pay hospital insurance taxes with their railroad retirement taxes. The hospital insurance tax on each is 1.45 percent on all earnings.
The medical insurance program is designed to help pay the bills for doctors' services and for a number of other medical costs not covered by the hospital insurance program.
The medical insurance program is voluntary, but eligible persons who wish to participate pay a monthly premium. For persons who are receiving railroad retirement benefits (including those also in receipt of social security benefits), the monthly premium is deducted from their railroad retirement checks; others make payments or, in some cases, have their premiums paid under a State assistance program.
The medical insurance plan covers physicians' services, outpatient medical and surgical services, and many other medical and health services in and out of medical institutions. It also helps cover some preventive services.
There is an annual deductible for Part B services. After the deductible is paid, Medicare will generally pay 80 percent of the approved charges for covered services during the rest of the year; the beneficiary is responsible for paying the remaining 20 percent of the cost.
Medicare provides basic protection against the high cost of illness, but it will not pay all health care expenses. Some of the services and supplies Medicare cannot pay for are custodial care, such as help with bathing, eating, and taking medicine; dentures and routine dental care; most eyeglasses, hearing aids and routine examinations to prescribe or fit them, and long-term care (nursing homes).
What Medicare Part B Covers
Medical and Other Services
Doctors' services (not routine physical exams), outpatient medical and surgical services and supplies, diagnostic tests, ambulatory surgery center facility fees for approved procedures, and durable medical equipment are usually covered.
Clinical Laboratory Services
Blood tests, urinalysis, and some screening tests can be covered.
Home Health Care
This is limited to reasonable and necessary part-time or intermittent skilled nursing care and home health aide services as well as physical therapy, occupational therapy, and speech-language therapy ordered by a doctor, and some other services.
Outpatient Hospital Services
This includes hospital services and supplies received as an outpatient as part of a doctor's care.
Part B helps pay for blood as an outpatient or as part of a Part B covered service.
These include bone mass measurements, cardiovascular screening, colorectal cancer screening, diabetes services, glaucoma testing, screening mammograms, Pap test and pelvic examination, prostate cancer screening, some shots (Flu, Pneumococcal and Hepatitis B) and a one-time "Welcome to Medicare" physical examination.
Many other services are covered. More information on specific services is available here:
|Toll Free:||1-800-MEDICARE (1-800-633-4227)|
At the website select, "Find Out What Medicare Covers".
Medical insurance generally does not pay for services outside the United States. There are rare emergency cases where medical insurance can pay for care in Canada or Mexico.
Part B medical insurance is paid for by premiums from persons who enroll in the program and by Federal general revenue funds. Monthly premiums for some beneficiaries are greater, depending on a beneficiary's or married couple's modified adjusted gross income. Some individuals also pay premium surcharges because they enrolled late for Part B.
Medicare Plan Choices
Medicare beneficiaries have choices for receiving health care services. The Original Medicare Plan is the traditional fee-for-service Medicare plan that is available nationwide. A beneficiary can see any doctor or provider who accepts Medicare and is accepting new Medicare patients. Or a beneficiary can choose a Medicare Advantage Plan (Part C). Medicare Advantage Plans combine Part A and Part B and, in some cases, Part D prescription drug coverage. In limited instances, other Medicare Health Plans may be available. To find out which plans are available in an area, click on the following link Compare Health Plans and Medigap Policies in Your Area.
|Toll Free:||1-800-MEDICARE (1-800-633-4227)|
A beneficiary must have both Medicare Part A and Part B to join a Medicare Advantage Plan, and the individual must live in the plan's service area. Under a Medicare Advantage Plan, a beneficiary may pay lower copayments and receive extra benefits.
Original Medicare Plan
Under the Original Medicare Plan, patients visit the hospital, doctor, or health care provider of their choice who accepts Medicare patients. Medicare pays a set percentage of the expenses, and patients are responsible for certain deductible and coinsurance payments.
Persons enrolled in the Original Medicare Plan who want prescription drug coverage must join a Medicare Prescription Drug Plan as described below, unless they already have drug coverage from a current or former employer or union that is at least as good as the standard Medicare prescription drug coverage.
When a patient receives hospital insurance benefits, he or she is billed by the hospital only for the deductible amount, any coinsurance amount and any noncovered services. The remainder of the bill from the hospital, as well as bills for services in skilled nursing facilities or home health visits, is sent to Medicare to pay its share.
Claims for medical insurance benefits filed on behalf of railroad retirement beneficiaries in the Original Medicare Plan are generally handled by Palmetto GBA on a nationwide basis. Palmetto GBA is a private company that contracts with the RRB and Medicare to pay Part B claims for railroad retirement beneficiaries, and can be reached at:
Railroad Medicare Part B Office
P.O. Box 10066
Augusta, GA 30999-0001
Many private insurance companies sell insurance to help pay for services not covered by the Original Medicare Plan. This kind of insurance is called "Medigap" for short. Policies may cover deductibles, coinsurance, copayments, health care outside the United States and more. Generally, individuals need Medicare Part A and Part B to enroll. A monthly premium is charged.
When someone first enrolls in Medicare Part B at age 65 or older, he or she has a 6-month "Medigap open enrollment period." During that time, the individual has a right to buy the Medigap policy of his or her choice regardless of any health problems. The company cannot refuse a policy or charge the individual more than all other open enrollment applicants. If an individual does not buy a policy when first eligible, the cost may go up or the desired policy may not be available.
More detailed information about Medigap policies is available in the publication Choosing a Medigap Policy: A Guide to Health Insurance for People with Medicare, available:
|Toll Free:||1-800-MEDICARE (1-800-633-4227)|
At the website select "Find a Medicare Publication".
Medicare Advantage Plans are available in most areas of the country. A beneficiary must have both Medicare Part A and Part B to join a Medicare Advantage Plan, and the individual must live in the plan's service area. Medicare Advantage Plan choices include regional preferred provider organizations (PPOs), health maintenance organizations (HMOs), private fee-for-service plans and others. A PPO is a plan under which a beneficiary uses doctors, hospitals, and providers belonging to a network; beneficiaries can use doctors, hospitals, and providers outside the network for an additional cost. Under a Medicare Advantage Plan, a beneficiary may pay lower copayments and receive extra benefits. Most plans include prescription drug coverage (Part D). Advantage Plans are managed by private insurance companies approved by Medicare.
The monthly Part C premium can be deducted from railroad retirement or social security benefits paid by the RRB, if the beneficiary contacts his or her Part C plan and requests that the RRB withhold Part C premiums. For those in a Medicare Advantage Plan, information on out-of-pocket costs is available:
|Toll Free:||1-800-MEDICARE (1-800-633-4227)|
At the website select "Compare Health Plans and Medigap Policies in Your Area."
Medicare Prescription Drug Coverage (Part D)
Medicare contracts with private companies to offer beneficiaries prescription drug coverage. These companies offer a variety of options, with different covered prescriptions, and different costs. Beneficiaries pay a monthly premium, a yearly deductible and part of the cost of prescriptions. Those with limited income and resources may qualify for help in paying some prescription drug costs.
Beginning in 2011, the Affordable Care Act required some Part D beneficiaries to also pay a monthly adjustment amount, depending on a beneficiary's or married couple's modified adjusted gross income.
The monthly Part D premium can be deducted from railroad retirement or social security benefits paid by the RRB, if the beneficiary contacts his or her Part D plan and requests that the RRB withhold Part D premiums. Part D beneficiaries subject to the income-related monthly adjustment amount will receive a bill for that portion as the agency is unable to deduct those amounts from benefits at this time.
Medicare prescription drug plans are voluntary. To enroll, individuals must have Medicare Part A, and must live in the prescription drug benefit plan's service area. Beneficiaries can join during the period that starts 3 months before Medicare coverage starts and ends 3 months after the first month of Medicare coverage. There may be a higher premium if an individual doesn't join a Medicare drug plan when first eligible, and he or she does not have other prescription drug coverage that, on average, covers at least as much as standard Medicare prescription drug coverage. In most cases, there is no automatic enrollment to get a Medicare prescription drug plan. Individuals enrolled in Medicare Advantage Plans will generally get their prescription drug coverage through their plan.
More information about Medicare prescription drug plans is available in the publication Your Guide to Medicare Prescription Drug Coverage. The Medicare & You handbook lists the Medicare prescription drug plans available in a beneficiary's area. Free personalized information is available online at www.medicare.gov, or by calling the Medicare toll-free number, 1-800-633-4227. Free personalized counseling is also available from the local State Health Insurance Assistance Program (SHIP) and other local and community-based organizations. Beneficiaries can visit the Medicare website to find the organization nearest them.
If a patient disagrees with a decision on the amount Medicare will pay on a claim or whether services received are covered by Medicare, he or she has the right to appeal the decision. Under the Original Medicare Plan, the notice received from Medicare stating the decision made on a claim tells a patient what appeal steps can be taken. This information is also available in Medicare Advantage Plan materials.
Individuals have the right to make a health care "advance directive." This directive contains written instructions stating the person's choices for health care or names someone to make those choices. The instructions are to be used if the person is unable to make his or her own health care decisions. Laws governing advance directives vary from State to State.
Other Medicare Publications
A handbook, Medicare & You, is mailed to Medicare beneficiary households each fall by the Centers for Medicare & Medicaid Services and is also available at www.medicare.gov. It describes the Medicare benefits, costs and health service options available.
Medicare for Railroad Workers and Their Families, (Form RB-20) provides general information on Medicare and is available at any RRB field office. It is also available at www.rrb.gov.
Help Lines / Web Sites
Medicare Toll-Free Number and Web Site
|Toll Free:||1-800-MEDICARE (1-800-633-4227)|
Palmetto GBA Toll-Free Number and Web Site