Medicare became the law of the United States in 1965 under the presidency of Lyndon Johnson. It originated as an amendment to the Social Security Act. The first part of the coverage consisted of two sections, Parts A and B. Hospital stays and associated costs were paid under Part A while Part B paid for medical expenses originating from outpatient care. Although 45 million people were enrolled in the program in 2008, the growth by the year 2030 will be dramatic, rising to 78 million under current projections.
Funding for the program is provided by FICA, which stands for Federal Insurance Contributions Act and SECA, the Self-Employment Contributions Act. Employees and employers together pay taxes of 2.9 percent into the program, split evenly. Self-employed individuals pay the entire amount.
Eligibility for the original Part A and B of this program is offered to any U. S. Citizen age 65 or older. The premium costs are waived if the worker has paid into FICA for ten years. Part A coverage is the portion available for hospital expenses. The inpatient hospital costs such as physician and nursing care, medicines and medical procedures and tests are all covered. There is a deductible cost that must be paid out-of-pocket. Part A also covers convalescent care in a skilled nursing facility. Again, deductibles and co-payments apply.
Medical costs are covered under Part B. This part of program coverage is optional, but there will be a penalty applied if you don’t enroll. Outpatient costs of all types are paid under Part B. These costs can be anything from seeing a physician to medical equipment to prosthetic equipment. Medications that are administered by a physician are covered.
Part C provisions allows for individuals to receive benefits from Part A and Part B through private insurance plans. Under the 2003 Prescription Drug, Improvement and Modernization Act, prescription medications were added to the list of benefits. Monthly premiums for Part C coverage is in addition to the Part A and B premiums. Extra fees for benefits not covered under the original act may apply.
Part D is the latest addition to the program. It was enacted into law in 2006. This portion of benefits law provides payment for prescription drug plans. It also allows for combining benefits from Part C for better coverage. This part requires additional payments for out-of-pocket expenses and monthly premiums.
Part A premiums are waived for most people. Those enrolled in Part B paid just under $100 monthly in 2009. Payment for Part B premiums is automatically collected from the Social Security check each month. The amounts for Part C and Part D premiums depend upon the insurance program and coverage level of the individual plan. Some Type C plans provide for rebate of a portion of the Part B premium paid by enrollees.
An extensive system of reviews and checks are in place to prevent misuse of the Medicare benefits system. There continues to be complaints of fraud and waste in the program, mostly directed at the doctors and hospitals who receive reimbursement for covered services provided. With the passage of the the U. S. Health care reform legislation, it is expected that there will be significant changes in the provisions of the law.
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