Medicare Overview

Medicare: A brief history & overview of your benefits

Medicare is a U.S health insurance policy for senior citizens 65 years or older, and younger people meeting certain medical conditions. On the 30th July 1965 President Lynden B. Johnson gave the go ahead for the Medicare health insurance program as an adjustment to the Social Security Legislation.

While in employment U.S. citizens and permanent residents have Medicare benefit tax deducted from their paycheck. Once they have turned 65 years old, they would automatically be enrolled in the Medicare program, on the condition that they or their spouse had worked at least 10 years.

If for some reason they were not eligible for the Medicare program, the person in question would have to put in an application to join the Medicare health insurance benefit program.

When the Medicare program was first passed it was made up of two sections. Part A and Part B. Part A covered hospital insurance and Part B was optional covering medical insurance. Due to further issues with health insurance, Parts C and D were also created.

Medicare Part A

This coverage as a rule is free seeing as the payment for Medicare has been taken out of the member’s paycheck through their working life. The benefit of Part A provides coverage for staying at a hospital more than 72 hours. It then goes onto cover, any nursing home bills as long as the reason is connected with the hospital stay, any requirement for skilled nursing care instead of rehabilitation and that the skill in not a standard service.

Medicare Part B

Part B is an optional plan of Medicare as it does not come for free. When first being signed up for Medicare, the new member would have to decide if they wished to pay a monthly premium of around $88.00. The main benefits of Part B, is coverage for doctors visits, x-rays, flu vaccinations, laboratory tests and various outpatient procedures.

Medicare Part C

In 1997 Medicare Part C see was created to allow member the option to receive their coverage through private health insurance plans. These regulations were changed in 2003, and go under the name of MA (Medicare Advantage) plans

Medicare Part D

Medicare Part D came to effect on the 1st January 2006 bringing with it a Medicare benefit prescription drug program. If the person was already enrolled in Part A or Part B they could opt for Part D. This Medicare benefit was able to reduce drug prescription prices or sometimes make them free. Each plan was unique, dependant on the prescription drugs, location and if the local pharmacy covered the medication needed. All these restrictions made Part D extremely complicated.

A Major worry is that the funds for Medicare will eventually run dry by the year 2018. The reason behind this is more people are living to the retirement age than previous years gone by. On top of this the baby boomer generation will come to retirement and ultimately put a strain on Medicare. With Medicare having an estimated total of 77 million members in 2031, there will be a lot of claims going around.

Entry Filed under: Benefits Explained