Medicare is a national health insurance program created and administered by the federal government in the United States to address the medical needs of older American citizens. Medicare is available to U.S. citizens 65 years of age and older and some people with disabilities under age 65.
Medicare is the largest health insurance program in the United States. The program was created as part of the Social Security Act Amendment in 1965 and was put into effect in 1966. At the end of 1966, Medicare served approximately 3.9 million individuals. As of 2003, it serves about 41 million people. There are 5.6 million Medicare beneficiaries enrolled in managed care programs.
In 1973, the Medicare program was expanded to include people who have permanent kidney failure and need dialysis or transplants and people under the age of 65 who have specific types of disabilities. Medicare was originally administered by the Social Security Administration, but in 1977, the program was transferred to the Health Care Financing Administration (HCFA), which is part of the United States Department of Health and Human Services (DHHS). The Centers for Medicare and Medicaid Services, an agency of the DHHS, is the administrative agency. This agency also administers Medicaid programs.
Medicare is an entitlement program similar to Social Security and is not based on financial need. Medicare benefits are available to all American citizens over the age of 65 because they or their spouses have paid Social Security taxes through their working years. Since Medicare is a federal program, the rules for eligibility remain constant throughout the nation and coverage remains constant regardless of where an individual receives treatment in the United States.
Medicare benefits are divided into two different categories referred to as Part A and Part B. Medicare Part A is hospital insurance that provides basic coverage for hospital stays and post-hospital nursing facilities, home health care, and hospice care for terminally ill patients. Most people automatically receive Part A when they turn 65 and do not have to pay a premium because they or their spouse paid Medicare taxes while they were working.
Medicare Part B is medical insurance. It covers most fees associated with basic doctor visits and laboratory testing. It also pays for some outpatient medical services such as medical equipment, supplies, and home health care and physical therapy. However, these services and supplies are only covered by Part B when medically necessary and prescribed by a doctor. Enrollment in Part B is optional and the Medicare recipient pays a premium of approximately $65 per month for these added benefits. The amount of the premium is periodically adjusted. Not every person who receives Medicare Part A enrolls in Part B.
Although Medicare provides fairly broad coverage of medical treatment, neither Part A nor B pays for the cost of prescription drugs or other medications.
Medicare is funded solely by the federal government. States do not make matching contributions to the Medicare fund. Social Security contributions, monthly premiums paid by program participants, and general government revenues generate the money used to support the Medicare program. Insurance coverage provided by Medicare is similar to that provided by private health insurance carriers. Medicare usually pays 50–80% of the medical bill, while the recipient pays the remaining balance for services provided.
As the population of the United States ages, concerns about health care and the financing of quality health care for all members of the elderly population grow. One concern is that health insurance provided by the Medicare program will become obsolete or will be cut from the federal budget in an attempt to save money. Another concern is that money provided by the Social Security Administration for Medicare will be depleted before the aging population of the United States can actually benefit from the taxes they are now paying. A third concern is coverage for prescription medications.
During the Clinton administration, several initiatives were started that saved funds for Medicare. The DHHS also supports several initiatives to save and improve the program. However, continuance of the federal health insurance program is still a problem that American citizens expect legislators to resolve.
During the George W. Bush administration, there has been debate concerning coverage for prescription drugs. Health care reformers suggest that prescription drugs be made available through the Medicare program due to the high cost of such medications. This debate has not been resolved as of early 2003, and legislation has not been enacted.
Some of the successful initiatives undertaken since 1992 include:
- Fighting fraud and abuse. Much attention has focused on Medicare abuse, fraud, and waste. As a result, overpayments were stopped, fraud was decreased, and abuse was investigated. This has saved the Medicare program approximately $500 million per year.
- Preserving the Medicare benefit. Due to aggressive action by the federal government, it is estimated that funds have been appropriated to keep Medicare viable through 2026.
- Supporting Preventive Medicine and the Healthy Aging Project. Medicare programs are supporting preventive medicine and diagnostic treatments in anticipation that preventive measures will improve the health of older Americans and thereby reduce health care costs.
Medicare benefits and health care financing are major issues in the United States. Legislators and federal agencies continue to work on initiatives that will keep health-care programs in place and working for the good of American citizens.
See also Medicaid .
Blumenthal, David and Jon Erickson. Long-Term Care and Medicare Policy: Can We Improve the Continuity of Care? Washington, DC: Brookings Institution Press, 2003.
Marmor, Theodore R. The Politics of Medicare. Second edition. Hawthorne, NY: Aldine de Gruyter, 2000.
Oberlander, Jonathan. Political Life of Medicare. Chicago: University of Chicago Press, 2003.
Pratt, David A. and Sean K. Hornbeck. Social Security and Medicare Answer Book. Gaithersburg, MD: Aspen, 2002.
Stevens, Robert and Rosemary Stevens. Welfare Medicine in America: A Case Study of Medicaid. Somerset, NJ: Transaction Publishers, 2003.
Charatan, Fred. "Bush proposes Medicare reform." British Medical Journal 326, no. 7389 (March 15, 2003): 570–572.
Hyman, David A. "Does Medicare care about quality? " Perspectives in Biology and Medicine 46, no. 1 (Winter 2003): 55–68.
Pulec, Jack L. "Medicare: all or nothing." Ear Nose and Throat Journal 82, no. 1 (January 2003): 7–8.
Smith, John J., and Leonard Berlin. "Medicare fraud and abuse." American Journal of Roentgenology 180, no. 3 (2003): 591–595.
American College of Physicians, 190 North Independence Mall West, Philadelphia, PA 19106-1572. (800) 523-1546 x2600 or (215) 351-2600. http://www.acponline.org .
American College of Surgeons, 633 North St. Clair Street, Chicago, IL 60611-32311. (312) 202-5000 fax: (312) 202-5001. http://www.facs.org .
American Hospital Association, One North Franklin, Chicago, IL 60606-3421. (312) 422-3000 fax: (312) 422-4796. http://www.aha.org .
American Medical Association, 515 North State Street, Chicago, IL 60610. (312) 464-5000. http://www.ama-assn.org .
Center for Medicare Advocacy, P.O. Box 350, Willimantic, CT 06226. (860) 456-7790 or (202) 216-0028. http://www.medicareadvocacy.org .
Centers for Medicare and Medicaid Services, U.S. Department of Health and Human Services. http://cms.hhs.gov .
Medicare Information Center, http://www.medicare.org .
Medicare Rights Center, http://www.medicarerights.org .
United States Government Medicare Information, http://www.medicare.gov .
L. Fleming Fallon, Jr., MD, DrPH