Oct 31st, 2011 | By | Category: Social Security & Medicare

Senior Citizen Journal has received several requests to ‘explain Medicare’.  We’ve taken a look at the resources on the Internet, and will take a stab at an explanation here today.  Although a number of countries have Medicare programs, this discussion will be limited to the program in the United States.

Explain Medicare

Medicare is a health insurance program designed for senior citizens over the age of 65, permanently disabled citizens of any age, citizens who have congenital physical disabilities, and people with End Stage Renal Disease.  The legislation was passed in 1965 when amendments were made to the Social Security Act.  Prior to 1965, over half of citizens beyond the age of 65 were without medical insurance.Before Medicare, only 51% of people aged 65 and older had health care coverage, and nearly 30% lived below the federal poverty level.”  Half of the retired elderly people in this country had no health insurance, and no hope of being able to get insurance without government support.

“Medicare is financed by payroll taxes imposed by the Federal Insurance Contributions Act (FICA) and the Self-Employment Contributions Act of 1954. (Wikipedia, Medicare – United States)  Those taxes are the deductions employees see on their bi-weekly or monthly paycheck stub.  The amounts are governed by federal legislation.

What Does Medicare Do?

Medicare has four Parts that provide health benefits for

  • Part A – Hospital Care
  • Part B – Medical Care (physicians, testing and imaging, screenings, etc)
  • Part C – Medicare Advantage – the private health insurance programs people can opt for instead of Original Medicare; Medicare Advantage programs provide coverage for hospitals, medical and prescription drugs.
  • Part D – Prescription Drug Coverage – this may be included in some supplemental insurance plans

Original Medicare (Parts A and B) covers 80% of the cost of medical care.  Many seniors opt to get Supplemental Insurance (Medigap) to fill in the gaps not covered by Original Medicare.   Although Medigap policies are not part of the Medicare program, insurance companies offering them work closely with the Centers for Medicare and Medicaid Services (CMS) to coordinate payment of benefits for covered services. Medigap policies may cover hospitalization and/or the gamut of medical services and/or prescription drugs – or any combination of these services.

SCJ found the description of Medicare on Wikipedia to be well-written and well-documented.  We highly recommend our readers go to Wiki to digest the details in this very important program for senior citizens and our health.

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