What is Medicare?

Medicare is a social insurance program administered by the U.S. government aged 65 years or who meet other special criteria. It operates as a single-payer health care system and funds residential training programs for the vast majority of doctors in the United States.

Medicare is partially financed by payroll taxes imposed by the Federal Insurance Contributions Act and the Self-Employment Contributions Act of 1954.

People who are eligible for Medicare assistance are individuals 65 years of age or older who have been legal residents of the United States for at least 5 years. However, when it comes to couples, if they or their spouse have paid taxes for at least 10 years, they must pay a monthly premium to be enrolled for the coverage.

This government-supported program’s premiums are waived when:
(a) 65 years or older and U.S. citizens or have been permanent legal residents for 5 continuous years, and they or their spouse has paid Medicare taxes for at least 10 years
(b) Under 65, disabled, and have been receiving either Social Security benefits or the Railroad Retirement Board disability benefits for at least 24 months from date of entitlement
(c) Get continuing dialysis for end of stage renal disease or need a kidney transplant
(d) Eligible for Social Security Disability Insurance and have amyotrophic lateral sclerosis

Medicare has four parts which are Hospital Insurance, Medical Insurance, Medicare Advantage plans, and, Prescription Drug plans.
Medicare’ hospital insurance covers inpatient hospital stays and brief stays for convalescence in a skilled nursing facility. The maximum length of stay that hospital insurance covers in a skilled nursing facility per ailment is 100 days. The first 20 days would be paid for in full by Medicare with the remaining 80 days requiring a co-payment.

The medical insurance helps pay for some services and products not covered by hospital care, generally on an outpatient basis. This is optional and may be deferred if the beneficiary or their spouse is still working. The coverage begins once a patient meets his or her deductible, then normally Medicare covers 80% of approved services, which the remaining 20% is paid by the patient.

With Medicare advantage plans, beneficiaries are given the option to receive benefits through private health insurance plans, instead of through the original hospital and medical insurances. This plan is required to offer coverage that meets or exceeds the standards of the original Medicare program, but do not cover all the benefits the same way.

With prescription drug plan, on the other hand, a person with Medicare must enroll in a stand-alone Prescription Drug Plan (PDP) or Medicare Advantage plan with prescription drug coverage. This is approved and regulated by the Medicare program, but is designed and maintained by private health insurance.

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