The Medicare Government Program - How Does It Work?
Introduction
The Medicare Government Program is a type of health insurance provided
by the United States Government. Citizens and permanent residents are
generally eligible for Medicare coverage if they are at least 65 years
old. Additionally, persons less than 65 years old can be covered by
Medicare government benefits if they suffer from certain disabilities.
Medicare Government Benefits
Initially, the Medicare program had two divisions. Part A covered
hospital insurance and Part B provided medical insurance.
What Are Part C and Part D?
In 1997, the Part C Medicare government coverage gave Medicare
participants the option to receive health care benefits through
private insurance plans. In 2003, the Medicare government rules
changed, and "Medicare Advantage" plans began offering coverage
equivalent to Parts A and B.
Prescription drugs were rarely covered by the original two-part
program, but since January 2006 additional drug coverage is provided
by Part D of the Medicare government plan. Persons eligible for
Parts A or B of Medicare government coverage are eligible for Part D
coverage.
Who Pays For Medicare?
Some of the Medicare government plan is financed by payroll taxes
deducted from workers' paychecks. This tax is currently 2.9% for
employees, with the employee and employer each contributing 50%
(1.45% of the tax). Self-employed individuals pay the entire 2.9%
themselves.
Persons (or their spouses) who have worked 40 or more quarters at a
job where the appropriate taxes were deducted from their checks do
not pay premiums for Part A Medicare government coverage. Those not
meeting the 40-quarter limit can purchase Part A coverage by paying
monthly premiums.
Part B Medicare government coverage requires the individual to pay a
monthly premium. A popular payment method is to have the amount
automatically deducted from the Social Security check.
The Magnitude Of The Plan
The Medicare government program processes over a billion annual
claims. This volume makes it the country's largest managed care
purchaser. Medicare accounted for almost 13% of the entire Federal
Budget in 2003.
Future Plan Funding Issues
Funding of the Medicare government plan has been a point of
contention. Some estimate that the play may become bankrupt by 2018.
Their reasoning is that people are retiring and becoming eligible
for Medicare government benefits faster than existing workers are
paying into the plan. The full retirement of the Baby Boomer
generation is expected to place additional hardship on the Medicare
government plan.
Regardless of its criticisms, solvency, or amount of paperwork
required, U.S. citizens should take advantage of the Medicare
government program as soon as they are able.
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