Medicare Insurance

Medicare is the name given to a health insurance program administered by the United States government, covering people who are either age 65 and over, or who meet other special criteria. It was originally signed into law on July 30, 1965 by President Lyndon B. Johnson as amendments to Social Security legislation. At the bill-signing ceremony President Johnson enrolled former President Harry S. Truman as the first Medicare beneficiary and presented him with the first Medicare card.[1]

Contents [hide]

1 Administration

2 Taxes imposed to finance Medicare

3 Cost

4 Eligibility

5 Benefits

5.1 Part A: Hospital Insurance

5.2 Part B: Medical Insurance

5.3 Part C: Medicare Advantage plans

5.4 Part D: Prescription Drug plans

6 Out-of-pocket costs

6.1 Premiums

6.2 Deductible and Coinsurance

7 Payment for services

7.1 Reimbursement for Part A services

7.2 Reimbursement for Part B services

7.2.1 Office medication reimbursement

8 Criticism

9 Legislation and reform

10 Legislative Oversight

11 See also

12 References

13 External links

13.1 Governmental links - current

13.2 Governmental links - historical

13.3 Non-governmental links

[edit] Administration

The Centers for Medicare and Medicaid Services (CMS), a component of the Department of Health and Human Services (HHS), administers Medicare, Medicaid, the State Children's Health Insurance Program (SCHIP), and the Clinical Laboratory Improvement Amendments (CLIA). Along with the Departments of Labor and Treasury, CMS also implements the insurance reform provisions of the Health Insurance Portability and Accountability Act of 1996 (HIPAA). The Social Security Administration is responsible for determining Medicare eligibility and processing premium payments for the Medicare program.

[edit] Taxes imposed to finance Medicare

Medicare is partially financed by payroll taxes imposed by the Federal Insurance Contributions Act (FICA) and the Self-Employment Contributions Act of 1954. In the case of employees, the tax is equal to 2.9% (1.45% withheld from the worker and a matching 1.45% paid by the employer) of the wages, salaries and other compensation in connection with employment. Until December 31, 1993, the law provided a maximum amount of wages, etc., on which the Medicare tax could be imposed each year. Beginning January 1, 1994, the compensation limit was removed. In the case of self-employed individuals, the tax is 2.9% of net earnings from self-employment, and the entire amount is paid by the self-employed individual.

[edit] Cost

According to the 2004 "Green Book" of the House Ways and Means Committee, Medicare expenditures from the American government were $256.8 billion in fiscal year 2002. Beneficiary premiums are highly subsidized, and net outlays for the program, accounting for the premiums paid by subscribers, were $230.9 billion.

[edit] Eligibility

In general, individuals are eligible for Medicare if they (or their spouse) worked for at least 10 years in Medicare-covered employment and are at least 65 years old and are a citizen or permanent resident of the United States of America.

Individuals who are under 65 years old can also be eligible if they are disabled or have end stage renal disease. People under 65 and disabled must be receiving disability benefits from either Social Security or the Railroad Retirement Board for at least 24 months before automatic enrollment occurs.

In 2005, Medicare provided health care coverage for 42.6 million Americans. Enrollment is expected to reach 77 million by 2031, when the baby boom generation is fully enrolled.[2]

[edit] Benefits

The "Original Medicare" program has two parts: Part A (Hospital Insurance), and Part B (Medical Insurance). Only a few special cases exist where prescription drugs are covered by Original Medicare, but as of January 2006, Medicare Part D provides more comprehensive drug coverage. Medicare Advantage plans are another way for beneficiaries to receive their Part A, B and D benefits.

[edit] Part A: Hospital Insurance

Part A covers hospital stays. It will pay for nursing home stays as well if certain criteria are met:

The hospital stay must be of at least 72 hours with the count starting at the first midnight after admission and not counting any hours of the discharge date.

The nursing home stay must be for something diagnosed during the hospital stay or for the main cause of hospital stay. For instance, hospital stay for broken hip and then nursing home stay for physical therapy would be covered.

If the patient is not receiving rehabilitation but has some other ailment that requires skilled nursing supervision then the nursing home stay would be covered.

The care being rendered by the nursing home must be skilled. Medicare part A does not pay for custodial, non-skilled, or long-term care activities, including activities of daily living (ADLs) such as personal hygiene, cooking, cleaning, etc.

The maximum length of stay that Medicare Part A will cover in a skilled nursing facility per ailment is 100 days. The first 20 of those days would be paid for in full by Medicare with the remaining 80 days requiring a co-payment (as of 2007, $124.00 per day). Many insurance companies will have a provision for skilled nursing care in the policies they sell.

[edit] Part B: Medical Insurance

Part B medical insurance helps pay for some services and products not covered by Part A, generally on an