The Basics of Medicare

Many senior citizens and their families do not understand the basics of the Medicare program. My objective, here, is to provide a quick overview of the program. Future blog posts will discuss eligibility, coverages and costs.

Medicare is a health insurance program, established under the Social Security Act of 1965 and signed into law by President Lyndon Johnson. It provides insurance coverage for medical expenses for legal U.S. residents of age 65 years or older, for residents under 65 who are permanently disabled and for others who meet certain criteria.

The Medicare program is divided into four parts: “Part A,” “Part B,” “Part C,” and “Part D.” “Part A” covers in-patient hospitalizations and related costs, including a semi-private room, meals, medical testing and associated doctors’ fees. It also covers (limited) in-patient rehabilitation and nursing-home care, hospice care and some home heath care services.

“Part B” covers medical services such as doctor’s visits, out-patient hospital treatments, and home care; this coverage is optional and requires a separate premium payment for most participants.

“Part C” is an elective coverage called the “Medicare Advantage Plan;” this plan, which involves a monthly or annual premium payment, works like a regular HMO or PPO insurance offering.

“Part D” is the new (2006) prescription drug insurance coverage.

Typically, Medicare pays up to 80% of an approved medical expense, while the beneficiary pays the remaining 20%.

Click on the following links for additional resources to learn more about Medicare:

The Official U.S. Government Medicare Website

The American Association of Retired Persons (AARP)

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