Medicare

• Author: Jeffrey Lehman, Shirelle Phelps

Page 31

A federally funded system of health and hospital insurance for persons aged 65 and older and for DISABLED PERSONS.

The Medicare program provides basic HEALTH CARE benefits to recipients of SOCIAL SECURITY and is funded through the Social Security Trust Fund. President HARRY S. TRUMAN first proposed a medical care program for the aged during the late 1940s, but Medicare was not enacted until 1965, as one of President Lyndon B. Johnson's GREAT SOCIETY programs (42 U.S.C.A. §§ 1395 et seq.).

Medicare went into effect in 1966 and was first administered by the SOCIAL SECURITY ADMINISTRATION. In 1977, the Medicare program was transferred to the newly created Health Care Financing Administration (HCFA). The HCFA is concerned with the development of policies, programs, procedures, and guidance regarding Medicare recipients, the providers of services?such as hospitals, nursing homes, and physicians?and other organizations that are closely related to the Medicare program.

Unlike other federal programs, Medicare is not supported by a large, federal organizational hierarchy. The federal government enters into contracts with private insurance companies for the processing of Medicare claims. Health care providers must meet state and local licensing laws and standards set by the HCFA in order to qualify for Medicare payments for their services.

Eligibility for Medicare does not depend on income. Almost everyone aged 65 and older is entitled to Medicare coverage. Disabled persons under age 65 may receive Medicare benefits after they have been collecting Social Security or railroad disability payments for at least two years. Workers do not have to retire at age 65 in order to be protected by Medicare. People who have not worked long enough under Social Security to receive retirement benefits may enroll in the plan by paying a monthly premium. For those individuals who are not covered under Social Security and who are too poor to pay the monthly premium, MEDICAID, the state and federal program for low-income persons, is available.

Medicare is divided into a hospital insurance program and a supplementary medical insurance program. The Medicare hospital insurance plan is funded through Social Security payroll taxes. It covers reasonable and medically necessary treatment in a hospital or skilled nursing home, meals, regular nursing-care services, and the cost of necessary special care. Medicare also pays for home health services and hospice care for terminally ill patients.

The hospital insurance program...