The Medicare Government Program - How Does It Work?
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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.
