Sometime before the 1950s, Harry Truman wrote to Congress asking they try to initiate some form of national health insurance. Although he tried repeatedly, he was not successful in this initiative, as people did not want the country to have publicly managed medical insurance at the time. Medicare was a program later signed into law by President Lyndon Johnson in 1965.
Medicare became a federal insurance program that provided medical care to people over the age of 65. The program, much like today, fell into parts. Part I consists of basic hospital insurance, extended care, home health services and hospice care for terminally ill patients. Part 2 consisted of a medical insurance program that paid for doctor fees, outpatient and other services. Some changes to this program came about more than nine years later.
In 1973, the program extended services to those who were less than 65 years old and disabled. More than 10 years after that, Congress added coverage for certain illnesses that were considered "catastrophic" and paid for services via a "surtax" or "super tax" on incomes of people who were over the age of 65. By 1993, more than 36 million people were enrolled. By 1997, premiums were about $43 a month.
Medicare is now run by the Department of Health and Human Services and its programs have been somewhat extended. Today, Medicare covers more than 41 million people and now is comprised of four parts. Part A is for hospital insurance, Part B for medical insurance, Part C is for health maintenance organization (HMO) and Part D is for prescription coverage.
The Original Medicare Plan, a "fee for service plan," meaning that you are charged only when you get a service, only consists of Part A, but you have the option of adding plans B or D. According to Medicare, the cost is the same each year and for 2008, a deductible will cost you about $135. The balance between what Medicare pays and what you pay goes about 80/20, but you will have to pay a set amount first anyway. Know this plan does not cover all of your health care costs either. Gaps in medical coverage like co-pays or deductibles are not covered. Some experts suggest buying into a supplemental or Medigap policy to cover any additional costs that then main program does not cover. Know that you may only have Medigap if you are on the Original Medicare Plan. The Medicare Advantage Plans cover a little more of the extra costs, but there are some major restrictions on patients who choose HMOs. If you have Medicare Advantage, you will not need Medigap. Also, some people cannot afford to pay more for the other plans available under this portion of Medicare.
If you get Social Security, Medicare Part A coverage is automatic. It is free, so make sure your personal information is updated. This does not mean Medicare will pay for all of your costs automatically. Many times people still have to pay deductibles and other costs incurred when they are admitted to a hospital. Make sure you understand your benefit periods. This means from the time you enter the hospital and then up to a point where you stop receiving care, about two months after you leave. If you do not receive Social Security, then a good rule of thumb is to sign up about three months before you expect to receive coverage.
There are some circumstances, aside from being over 65 years old, in which you will automatically qualify for Medicare. These circumstances include if you are married to someone who is eligible for Social Security, if you are disabled and have already been collecting Social Security and receiving dialysis, or you have received a kidney transplant.
Hospital Insurance (also referred to as the "in-patient" portion), for some may not be free and you might have to buy into Medicare. This would only happen if you never paid Social Security tax or did not pay into the system long enough.
Part B is optional medical insurance, which is added automatically, so if you do not want to receive this portion of service, you will have to contact someone and cancel it. It costs very little so you might want to leave well enough alone. Again, if you are 65 years or older, and have paid your Medicare taxes, you are immediately eligible.
When Medicare first came about in 1965, the program only had parts A and B. Part C was added in 1997. The intention was to offer people a wider range of services beyond the fee-based programs. Also known as "Medicare+Choice," the program offers several health plans for people to choose from. There is more choice than a person will need, as most Medicare plans consist solely of the HMO portion.
To be eligible to participate in the health plans under Part C, you have to be eligible for Part A and be paying into Part B. Before you start trying to pay for services you cannot receive, try to find out what is available in your area. If you enroll in the Medicare Health Maintenance Organization (HMO), you may only use providers, doctors and hospital in its network. This means it is going to be difficult for you to keep your own doctor or services you already use. This applies to everyone in every circumstance. You can choose your own primary doctor that will hold sway over other services you many need at some point.
To see a specialist, like an endocrinologist, for example, you had to have already gone to your primary doctor first. This gets long and involved during the first go around. The primary doctor then gives you a referral to a specialist, who will invariably refer you to someone else. Know that if you choose this plan, they will not pay for services outside the network.
Even if you were to pay additional premiums, the extra money would only allow for partial coverage for what Medicare calls "point of service" (POS). This means sometimes people can keep their own doctor, but they will pay a lot more. Under the Medicare Preferred Provider Plan (PPO), you will have a lot more flexibility then you will with an HMO. It will not cost you as much if you see doctors within their medical network, but it will if you chose to break ranks. In most situations, a person under this plan does not have to go to a primary doctor to be able to see a specialist.
Know that the added flexibility will cost considerably more, however. Sometimes, a group of doctors or "medical providers" operate on their own. These are called "Provider-Sponsored Organizations (PSO). Most of them operate (with networks and such) like an HMO with one notable difference. The main difference with this program is the insurer does not dictate what will happen to a patient, as is the case with an HMO. The medical-provider group that consists of doctors and hospitals make the decisions for their patients. There are two more options for those who do not want to be covered under the first three plans. The Private Fee for Service Plan (PFFS) and Medical Savings Account (MSA) require that a person pay a premium along with other costs. Other costs consist of co-pays and deductibles. Currently, the MSAs are no longer available in some areas.
The Plan D program of Medicare has to do with prescription drug coverage. It is not without controversy. According to consumer advocates, this new plan is aimed at maximizing pharmaceutical profits rather than helping seniors get their much-needed prescriptions. Developed as part of a governmental Medicare improvement initiative around 2003, this program came about just two years ago.
Beneficiaries now have a lot to choose from and may be a little confused at first. You can add Plan D, your prescription drug coverage, when you are already part of Medicare plans A or B. This drug plan consists of the Prescription Drug Plan (PDP) and the Medicare Advantage Plan (MA). As the name suggests, the first covers only prescriptions, the second includes both medical services and prescription drugs. This is commonly referred to as "MA-PD."
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