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A Guide to Mental Wellness in Older Age: Recognizing and Overcoming Depression

Paying for Mental Health Services under Medicare

The vast majority of older Americans have Medicare as their primary health insurer, however, the system is complicated and payment for mental health services are treated differently under Medicare than payment for other health care services.

Medicare is made up of two parts:

-Medicare Part A pays for hospital services. If you are hospitalized for your depression, Medicare will pay as it would for any other hospitalization. However, if you are in a specialty psychiatric facility, Medicare Part A will pay for up to 190 days of inpatient care (in a Medicare-certified psychiatric hospital). If you are hospitalized in a psychiatric facility for over 190 days, your secondary insurer must pay or you are responsible for the expenses.

-Medicare Part B pays for outpatient mental health services—such as services that are provided outside a hospital or do not require an overnight stay. These services include physician services, individual and group therapy, and laboratory tests. Unlike for other health services, Medicare Part B will only pay 50 percent of your outpatient expenses after you have paid your yearly deductible. The other complicating factor is that Medicare is not consistent for which mental health services it will reimburse 80 percent of the expenses and for which mental health services it will reimburse 50 percent of the expenses. For example, although it is a Federal regulation that Medicare reimburse at the 80 percent rate for the diagnosis or medical management of Alzheimer’s disease, that is not always the case. Medicare is also supposed to reimburse at 80 percent if you see your physician for what is called medication management—brief follow-up appointments to ensure that your medication is working properly. Again, in some areas in the country Medicare will pay 80 percent of those costs; in other areas, Medicare will pay only 50 percent of those costs.

Many people have a secondary insurance plan in addition to Medicare, commonly called Medigap. Medigap insurance policies are required to cover mental health services not covered by Medicare. However, some supplemental plans offered to retirees by their former employers are not required to meet this standard. It is always best to review your policy before you begin treatment so you are clear on what expenses Medicare will cover, what expenses your health insurance will cover, and what expenses you will be responsible for out of your own pocket. You should feel free to discuss these issues with your physician.

If you are dependent upon Medicare as your primary health insurance, ask your doctor whether they accept Medicare as payment. Some physicians have opted not to accept Medicare health insurance due to the complications of the law.

Reimbursement for mental health services under Medicare is discriminatory. There should be no difference between payment for services for diabetes or heart disease and for depression. Many organizations are working to change this unfair law.

Prescription Drug Benefits Under Medicare

In 2003, the U.S. Congress passed a bill that will permit Medicare to pay for prescription drugs. The new law is complicated and does not become effective until 2006, however, for some people, the new law will help pay for medications that can be very expensive. The newer antidepressants, the SSRIs, cost $50 to $90 per month; older antidepressants are a little less expensive. The Centers for Medicare and Medicaid Services has a section on its website that will guide older adults to programs in their area that help cover the costs of expensive medications.

Until the new benefit becomes effective, Medicare provides information on public and private programs that offer Medicare-approved drug discount cards and other assistance in obtaining prescription drugs. Information is also available about a program offered by pharmaceutical companies called Together Rx, which can help with costs for some older adults.

Together Rx

1-800-MEDICARE or 1-800-633-4227

In 2006, the new Medicare prescription drug benefit will become effective. Premiums for this new program are estimated to be $35 per month or $420 per year, and there will be a $250 annual deductible. This new benefit will pay 75 percent of your drug costs until your total prescription drug costs reach $2,250. After you reach $2,250 in drug expenses in a given year, your coverage stops and you have to pay for the next $2,850 in medication expenses. The prescription drug coverage begins again after your medication expenses exceed $5,000 in the year. For many older adults, this drug coverage may be of some assistance, but they will still have to pay large out-of-pocket amounts for their prescription drugs. For low-income seniors (individuals whose yearly income is less than $13,000 per year), there will be some additional assistance to cover the cost of your medicines.

The new Medicare prescription drug program is required to cover drugs in all classes, but is not required to cover every drug in a drug class. For example, the new Medicare drug program will cover antidepressants, but it may not cover all antidepressants. This may be a problem if there is one antidepressant that you tolerate better or is more effective than another antidepressant. It is possible that the Medicare drug program will not cover the antidepressant that is best for you.

If you want to learn more about this new law, or if you want to see what type of Medicare coverage you can expect under the new Medicare drug law, visit the Families USA website at Families USA is a national nonprofit, non-partisan organization dedicated to high-quality, affordable health care for all Americans.

A Guide to Mental Wellness in Older Age: Recognizing and Overcoming Depression

© Geriatric Mental Health Foundation 2004
7910 Woodmont Avenue, Suite 1050
Bethesda, Maryland 20814

Expert assistance was provided by Lissy F. Jarvik, M.D., Professor Emerita of Psychiatry and Biobehavioral Sciences, University of California-Los Angeles, School of Medicine; Susan Lieff, M.D., M.Ed., Assistant Professor, Department of Psychiatry, University of Toronto; and Stephen J. Bartels, M.D., M.S., Associate Professor of Psychiatry, Dartmouth Medical School.

The Geriatric Mental Health Foundation grants permission to print, photocopy, and distribute this material. Please cite the Foundation, including the address, phone and website.