LUMP SUM PAYMENT AT DEATH

A lump sum death payment in the amount of $255 is made to the worker’s surviving spouse or his minor children if there is no surviving spouse. Prior to 1983, this payment was referred to as a “burial benefit,” as it was paid directly to the funeral home at the family’s request. This is no longer true. For working couples, the lump sum payment is only paid on the death of the first spouse unless there are minor children.

MEDICARE

Medicare is the federal government health insurance program for seniors (age 65 and older), the disabled (under age 65), and individuals (any age) who have permanent kidney failure. Medicare provides basic health care coverage for approximately 80 percent of allowable medical charges (after specific annual deductible expenses are met). It does not cover every medical expense, or the cost of long-term care (except in limited circumstances described in “Medicare” in Chapter Twelve).

Medicare consists of two parts:

Part “A” covers inpatient hospital care as well as a portion of the first 100 days of a patient’s stay in a skilled nursing facility (or home health care) following a hospital stay, and hospice care.

Part “B” of Medicare covers doctor’s services, medical services, supplies, and other services not covered by Part “A.” While Part A is free to eligible workers, Part B coverage requires that you pay a monthly premium (for 2001, the basic Part “B” premium is $50 per month), which is automatically deducted from your monthly Social Security check if you receive benefits.

Workers electing to defer retirement beyond age 65 may make quarterly Part B premium payments directly to the SSA. Part B should not be viewed as optional. Although your participation is elective (you must pay premiums), Part B coverage is an essential part of your personal medical plan.

Most seniors are eligible for Medicare, based on their own work record or on their spouse’s. Individuals age 65 or older are eligible for Medicare Part “A” if they:

1. Receive Social Security or railroad retirement benefits, or
2. Are not receiving benefits but have worked long enough to be eligible for them, or
3. Would be entitled to Social Security benefits based on a spouse’s (or ex-spouse’s) work record, or
4. Worked long enough in a federal, state, or local government job to be insured for Medicare coverage.

Individuals under the age of 65 are eligible for Medicare Part “A” if they:

1. Have been a Social Security disability beneficiary for 24 months, or
2. Have permanent kidney failure.

Individuals who do not qualify for Medicare Part “A” under these rules may purchase coverage (in 2001, the Medicare Part “A” premium is $300 per month).

The eligibility requirements for Part “B” are different from Medicare Part “A.” Virtually anyone who is 65 or older (or who is under age 65 but eligible for Part “A” as outlined above) is eligible to purchase Medicare Part “B” coverage.

If you are receiving Social Security, you will automatically be contacted a few months before you become eligible for Medicare (either age 65 or 24 months after disability). If you are not receiving Social Security at the time you become eligible for Medicare, you should contact the Social Security Administration (by phone at 1-800 772-1213) at least three months prior to your 65th birthday to obtain important information and determine your Medicare eligibility. Delaying Medicare enrollment may cause a delay in coverage.

Consult the Directory of Resources (“Social Security and Government Benefits”) for additional information on Medicare.

MEDIGAP INSURANCE

The coverage offered under Medicare Part A and B is somewhat limited. As noted above, Medicare covers only 80 percent of allowable medical charges after annual deductible expenses have been met. Medicare does not cover eye glasses, prescriptions, or dental care. The private sector has responded to fill the gaps in Medicare coverage by offering private health insurance that covers medical costs not covered by Medicare. For obvious reasons, these policies have come to be known as “Medigap” policies. The costs of Medigap policies vary from company to company, and according to the coverage chosen. Medigap policies typically cover the 20 percent that Medicare doesn’t pay, as well as some of the services excluded under Medicare. You may purchase a policy covering deductibles and even prescriptions. Medigap insurance is often part of the benefit package of a former employer (see “Medigap Coverage” in Chapter Four).

MEDICAID

Medicaid is a state-run health care program for low-income individuals. Medicaid also covers the cost of long-term nursing home care for people who have exhausted their assets (see “Medicaid” in Chapter Twelve).

SUPPLEMENTAL SECURITY INCOME (SSI)

Supplemental Security Income (“SSI”) is a federally funded program that offers limited financial security for people with little or no income or resources. SSI is available to individuals who are age 65 or older, and to the blind or disabled of any age (even children). Those eligible for SSI are also eligible for food stamps, Medicaid, and other social services.

SSI benefits are based on need. Eligibility is similar to that of Medicaid. To qualify, an individual must reside in the United States and be a U.S. citizen (or lawfully admitted for permanent residence), have limited income and not have more than $2,000 in resources ($3,000 for a couple), not counting their principal residence, and one car.