What Is Medicare?
Medicare is a U.S. government program that provides healthcare coverage for senior citizens and those with certain disabilities. First administered in 1965, Medicare currently helps insure people who are at least 65 or who suffer from chronic kidney disease or Lou Gehrig’s disease. Persons receiving Social Security Disability Insurance or Railroad Retirement Board benefits are also eligible.
Medicare establishes four main areas of coverage:
Part A typically covers inpatient hospital care for up to ninety days but under certain conditions also helps cover home health care and time spent in a hospice or skilled nursing facility. Part A is largely financed by a Medicare payroll tax collected from workers and employers. As of 2013, this tax remains at 2.9 percent for individuals earning up to $200,000 annually, or married couples earning up to $250,000 who file jointly, but increases to 3.8 percent for incomes exceeding those amounts. A monthly premium for Part A is usually unnecessary for individuals who paid the Medicare tax for at least ten years while employed, otherwise the premium costs a maximum of $441 per month.
Part B helps cover various outpatient services, including routine nurse and physician care, diagnostic tests, x-rays, vaccinations and certain drug treatments. It also helps pay for regularly needed procedures such as blood transfusions, chemotherapy and dialysis. Medical supplies, including wheelchairs, walkers, canes and prosthetic devices, are covered as well. Most Medicare enrollees pay a premium of $104.90 per month for Part B coverage along with a deductible of $147 per year.
Part C, known as Medicare Advantage, offers optional health coverage through a private company operating under Medicare’s approval. This option expands the type of care a member normally receives under Parts A and B, from almost any doctor or hospital nationwide, with Medicare paying a fixed amount toward the company’s premium. Enrollees often pay an extra premium, along with the Part B premium, for benefits not covered by Parts A and B alone such as vision care, dental care and prescribed medication.
Part D offers optional coverage, also through a private company, for prescription drugs not covered under Parts A, B and C. Available plans are designed to help consolidate prescription drug costs and protect against price increases. The monthly premium will depend on the specific coverage the enrollee needs, with Medicare paying a fixed portion toward the cost of all eligible medications.