As of 2009 Medicare provides health insurance coverage to nearly 46 million individuals.
Social Security amendments in 1965 created the Medicare health insurance program and as of January 1966 Medicare covered about 19 million Americans age 65 and older. Coverage expanded in 1973 to recipients of disability benefits and kidney dialysis or transplant patients. Medicare originally had two basic parts -- Hospital and Medical Insurance. Legislation in 1985, 1987 and 2003 added optional ways to receive Medicare covered services and prescription drug benefits.
Original Medicare
Originally, Medicare had two parts: Medicare Part A Hospital Insurance and Part B Medical Insurance. Part A covers inpatient charges by hospitals and skilled nursing facilities as well as hospice care. Hospital Insurance is free for workers who have worked long enough under Social Security because 1.45 percent of Social Security taxes goes into the Medicare Trust Fund to finance Part A. Medicare Part B receives financing from both the federal government and premiums that recipients must pay, which vary yearly. It generally covers 80 percent of the costs of physician's services inside and outside the hospital, outpatient and home health-care services and durable medical equipment. It also pays for some preventative services like flu shots and mammograms.
Medicare Advantage
Medicare Part C Medicare Advantage allows Medicare recipients to receive their Medicare-covered services from private organizations that contract with Medicare. The organizations include health maintenance organizations, preferred provider plans and fee-for-service plans, which establish fixed fees that physicians can accept or decline. The Medicare Advantage plans must provide all the same coverage as original Medicare. Most provide smaller deductibles and co-pays than regular Medicare, plus coverage of additional items Medicare usually does not pay for, such as routine dental and optometry services. To enroll, recipients must have both parts A and B of Medicare.
Prescription Drug Coverage
Medicare offered prescription drug coverage--Medicare Part D,effective January 1, 2006. Enrollment is optional, and recipients must pay a monthly premium, which varies with the plan and insurance company. Recipients of either Medicare Part A or Part B can enroll during either their initial Medicare enrollment period, or an open season each November 15 through December 31. Failure to enroll when first eligible could result in larger premiums. Recipients choose a plan and enroll with a private carrier, which contracts with Medicare to provide the coverage. The Centers for Medicare and Medicaid specify the different policies and the minimum coverage each policy must offer. Many Medicare Advantage plans include Medicare Part D coverage.
Help with Medicare Premiums
Social Security administers the Medicare Prescription Drug Extra Help program, which helps recipients pay their Part D premiums. Recipients apply online at Social Security's website or at their local office. To qualify, the recipient's income and assets must fall below certain thresholds. The federal government may pay all or part of the premiums for prescription drug coverage, depending on the cost of the chosen plan. If a recipient qualifies for the Extra Help program, her chosen drug plan also provides reduced annual deductibles and co-pays on covered prescriptions.
Tags: Social Security, Medicare Part, Medicare Advantage, prescription drug, recipients must, with Medicare
