Medicare Provides Preventive Services

There are many myths about Medicare: many of which focus on what it covers and what it doesn’t. Not surprisingly, older Americans are seemingly unaware that Medicare covers a broad range of services to prevent disease, detect disease early when it is most treatable and curable and manage disease so that complications can be avoided.

“The U.S. health care system is focusing on disease treatment as well as prevention and wellness efforts,” Robert Fusco, President, New Jersey Association of Long Term Care Pharmacy Providers said in a recent release. “Studies have shown that every $1 spent on prevention can save more than $13 in health care cost. Preventing chronic medical problems will save billons of dollars, while helping people to live longer, healthier lives.”

According to Centers for Medicare and Medicaid Services (CMS) Prevention Web site, Medicare began covering preventive services in 1981 with the pneumococcal vaccination. Despite its long history of coverage, pneumococcal vaccination rates are less than optimal, with 59.2 percent of non-Hispanic Whites, 38.5 percent of Blacks and 30.2 percent of Hispanics reporting ever receiving it.

Not surprisingly, given all the myths surrounding Medicare, older adults are not receiving all recommended preventive services, even with frequent visits to physician offices. Reasons for this vary, but highlight the opportunity to improve preventive care for older adults, CMS reports.

So what are some of the screening and prevention efforts covered by Medicare? Of note, individuals must be enrolled in Medicare Part B to get the prevention and screening benefits.

Of note, Medicare beneficiaries must be aware of something called “assignment.” According to Epstein, when a doctor accepts assignment from Medicare, it means he/she will submit the bill to Medicare and will be paid by Medicare at Medicare's allowable rate for 80 percent of the treatment cost. The patient is still responsible for his/her 20 percent co-pay of allowable charges.

If a doctor does not accept assignment, he/she still must submit the charges to Medicare, but Medicare will not pay the doctor directly. The patient will receive all payments from Medicare and the doctor needs to collect any money due directly from the patient. Most doctors that don't accept assignment expect full payment at the time of the appointment. Doctors who usually take this stance want more for the treatment (procedure) than is allowed by Medicare. So, if a patient decides to use a doctor that does not accept assignment, he/she should be aware that the reimbursement from Medicare may be less than the 80 percent of total cost. Going to a doctor that does not accept assignment can become very expensive.

For more details about Medicare's coverage of preventive services, including costs under the Original Medicare Plan, call 800.MEDICARE or visit their website .

January 2007 - This column is produced by the Financial Planning Association, a membership organization for the financial planning community, and is provided by Terry Green, CFP ®, AIF ®, a local member of the FPA.