How Does the Medicare Coverage Work?

In 1965, President Lyndon Johnson signed the Social Security Amendments, effectively creating a national heath insurance program. Known as Medicare, this program provides hospital and medical insurance for over 40 million Americans. The program was designed to meet the needs of those aged 65 or older. A portion of wage taxes is used to fund Medicare.

A person begins three months prior to their birthday in the year they turn 65 to enroll in the program. This is known as the initial enrollment period that ends three months after for a total of seven months. If the individual does not complete enrollment, they must wait until the general enrollment period the following January. This period last between January 1st through March 31st and benefits begin on July 1st.

The initial Medicare coverage that is received upon enrollment is Part A. This part provides in-patient hospitalization insurance and is free. The cost of a semi-private hospital room, medications associated with in-patient care and surgeries are covered. The insurance will also provide any necessary blood after the initial three pints have been paid for by the insured. There is a cap on the total number of days Part A will pay for in-patient hospitalization.

In addition to the hospital insurance, Part B is an optional program that provides for out-patient medical services. Doctor office visits, out-patient services and procedures and any medications associated with the doctor's visit only are paid for. Part B also pays for blood again after the first three pints. Part B has a monthly premium cost for services based on the person's income.

In 2003 changes were made to the preferred provider option which is Part C or the Medicare Advantage program. A Prescription Drug Benefit Program was also added which is Part D. Both of these programs are optional. To participate in Part C, one must be enrolled in both Parts A and B. To enroll in Part D the insured must participate in either Part A or Parts A and B. To pay for those expenses not covered by Part A or B a person can purchase a Medicare Supplement plan. Private insurers who are endorsed by Medicare can offer these plans.

There are 12 Medicare coverage plans available through private insurers that cover deductibles and co-pays and other costs not paid for. The costs for these plans vary and are designed to meet some or all of the needs of the insured. It should also be noted that Medicare Supplements and Medicare coverage does not pay for long-term care services.

Those who are in lower income groups benefit greatly from medicare coverage than those who make more. The program has grown tremendously over the 45 years since its inception from 4 million to over 40 million recipients. The baby boomer generation will increase the burden on the system in the coming decades as they turn 65. This stress will require a new look at the system of entitlement programs in this country and reform.

Congress and the President are considering different options to ensure the continued viability of the Medicare program. Eliminating fraud, abuse and waste as well as making as efficient as possible the delivery of services are a start. Changes to cost of living adjustments and changes in benefit levels as well as increased cot sharing may be an inevitable part of the program's future. Read more on Medicare coverage.