In 1965, President Lyndon Johnson signed into law an amendment to the Social Security regulations and laws. This revision was known as Medicare. Originally, the were only two parts to the law. Hospital insurance was covered under Part A and medical insurance provisions came under Part B. By 2008, more than forty-five million individuals in the United States were enrolled in the program. Estimates of beneficiaries in 2030, when the baby-boomers are all under the auspices of the program, reach 78 million people. It is expected to be the largest social program of its kind on the planet.
Funding for the program is borne by employers and employees equally at a level of just under three percent of payroll. The governing legislation is the Self-Employment Contributions Act of 1954 for self employed individuals and the Federal Insurance Contributions Act (FICA). Self employed workers pay both the employer and employee portions.
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.
Part B coverage is for the purpose of medical costs. It is optional, but unless the individual or spouse is working, there is a penalty for not enrolling in the program. Part B covers many of the outpatient costs. Some of the benefits under Part B include physician and nursing services, administration of medications by a physician, medical equipment, prosthetic equipment and other related equipment and supplies.
Private insurance plans can be used to pay benefits under Part A and Part B, Part C became operable under the 2003 Prescription Drug, Improvement and Modernization Act. This part of the program adds the ability to cover prescription medications. The cost of Part C premiums are in addition to those of the original program parts.
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.
Most Part A beneficiaries don’t have to pay premiums. The premiums for Part B are $96.40 monthly. These premium costs are automatically deducted from Social Security retirement benefits payments. The type of program and level of coverage determines the premium costs for Parts C and D. With some of the Part C plans, part or all of the Part B premium costs are returned to the enrollees.
The entire Medicare program is administered by the federal government. Complaints about fraud and abuse are common, but they are usually directed at hospitals, physicians and surgeons who bill the program for services. The changes in U. S. Law will affect the provision of services for health care in the future, but it remains to be seen what the extent of the changes will be.
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