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Recession information: Basics of Medicare
Given the ongoing recession, we thought many may want/need to gain a better
understanding of general government benefits programs, such as Social Security, Medicare,
and Medicaid. This article provides a very basic understanding of Medicare:
Established by the Social Security Act of 1965, Medicare is the federal insurance program
for Americans age 65 and older. Medicare is funded by the Social Security Administration.
Employees pay 1.45% of their earnings into FICA that goes for Medicare. Employers pay
an additional 1.45% for a total of 2.9%. Self-employed individuals must pay the entire 2.9%
themselves.
Medicare is not a full plan. In other words, individuals will also pay some of the Medicare
costs as they start using the plan. You are eligible for Medicare benefits once you reach 65,
but similar to Social Security benefits, there is a mandatory 40-credit requirement.
Medicare has four parts (Parts A, B, C, D). Basic Medicare includes parts A and B. Briefly:
1. Part A provides coverage in the cases when you are hospitalized.
2. Part B provides coverage for doctor visits, some of the outpatient costs (e.g., labs,
physical therapy) as well as some of the preventives costs (e.g., cancer screening,
glaucoma screening). There is a monthly premium for Part B (for instance, the base
premium for 2008 was $96.40 if your gross income was less than $80k for singles or
$160k for married couples)
3. Part C, also know as Medicare Advantage, is a private plan run through Medicare that
provides alternatives to Parts A and B. You of course pay for this coverage and the
premium varies based on what coverages and insurers you chose. For further information
see the Medicare web site.
4. Part D provides prescription drug coverage. Like Part C, you have to buy Part D if you
want it.
Given that Medicare is considered a social insurance or social welfare program, it is subject
of many controversies. Economists, social scientists, as well as policy makers and
politicians often have strong views either in favor or against the program and as a result the
program has gone through various changes and amendments over the years.
Note that this article provides a very basic general understanding of the Medicare program.
For further information, contact the SSA directly.
Given the ongoing recession, we thought many may want/need to gain a better
understanding of general government benefits programs, such as Social Security, Medicare,
and Medicaid. This article provides a very basic understanding of Medicare:
Established by the Social Security Act of 1965, Medicare is the federal insurance program
for Americans age 65 and older. Medicare is funded by the Social Security Administration.
Employees pay 1.45% of their earnings into FICA that goes for Medicare. Employers pay
an additional 1.45% for a total of 2.9%. Self-employed individuals must pay the entire 2.9%
themselves.
Medicare is not a full plan. In other words, individuals will also pay some of the Medicare
costs as they start using the plan. You are eligible for Medicare benefits once you reach 65,
but similar to Social Security benefits, there is a mandatory 40-credit requirement.
Medicare has four parts (Parts A, B, C, D). Basic Medicare includes parts A and B. Briefly:
1. Part A provides coverage in the cases when you are hospitalized.
2. Part B provides coverage for doctor visits, some of the outpatient costs (e.g., labs,
physical therapy) as well as some of the preventives costs (e.g., cancer screening,
glaucoma screening). There is a monthly premium for Part B (for instance, the base
premium for 2008 was $96.40 if your gross income was less than $80k for singles or
$160k for married couples)
3. Part C, also know as Medicare Advantage, is a private plan run through Medicare that
provides alternatives to Parts A and B. You of course pay for this coverage and the
premium varies based on what coverages and insurers you chose. For further information
see the Medicare web site.
4. Part D provides prescription drug coverage. Like Part C, you have to buy Part D if you
want it.
Given that Medicare is considered a social insurance or social welfare program, it is subject
of many controversies. Economists, social scientists, as well as policy makers and
politicians often have strong views either in favor or against the program and as a result the
program has gone through various changes and amendments over the years.
Note that this article provides a very basic general understanding of the Medicare program.
For further information, contact the SSA directly.
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