Medicare is a national health insurance program in the United States, begun in 1966 under the Social Security Administration (SSA) and is now administered by the Centers for Medicare and Medicaid Services (CMS). It provides health insurance for Americans aged 65 and older, as well as for some younger people with disabilities. People with end-stage renal disease (ESRD) and amyotrophic lateral sclerosis (ALS) also qualify for Medicare. There are four parts to Medicare: Part A covers hospital insurance, Part B covers medical insurance, Part C is an option for receiving benefits through a private health plan, and Part D covers prescription drugs. About 60 million Americans were enrolled in Medicare in 2020.
Medicare has several features that make it unique among health insurance programs. First, it is a social insurance program, which means that it is funded by payroll taxes instead of general tax revenue. This makes it similar to programs like Social Security and Medicaid. Second, it is a single-payer system, which means that there is only one payer of claims (in this case, the government). This makes it different from most private health insurance plans, which have multiple payers. Finally, Medicare has two parts: Part A, which is mandatory for all enrollees, and Part B, which is optional. This allows enrollees to choose how much coverage they want.
Part A of Medicare is hospital insurance. It covers inpatient care in hospitals, skilled nursing facilities, hospice care, and home health care. Part B of Medicare is medical insurance. It covers outpatient care, preventive services, durable medical equipment, and some home health care. Part C of Medicare is an option for receiving benefits through a private health plan (such as an HMO or PPO). Part D of Medicare covers prescription drugs.
People who are eligible for Medicare can enroll in one or more parts of the program. Enrollees must be U.S. citizens or legal residents who are 65 years or older, or who have been receiving Social Security disability benefits for at least 24 months. People with ESRD or ALS can enroll regardless of their age.
People who are enrolled in Medicare have reduced costs for many health care services. For example, they usually pay no deductibles or co-payments for preventive services such as screenings and vaccinations. They also have reduced costs for hospitalization, surgery, and doctor visits. In addition, Medicare enrollees have some prescription drug coverage through Part D of the program.
There are several ways to get help paying for Medicare benefits. People who cannot afford the premiums can get financial assistance through the Medicaid program. Low-income enrollees can also get help with deductibles and co-payments through the Extra Help program. Some private supplemental insurance plans also help cover the costs of Medicare benefits.