Medicare is a federally funded program that’s purpose is to provide basic health insurance to those age 65 and over, as well as to other specific qualified individuals.
Over the years, Medicare has become the leading health care insurance program in the United States for seniors. While it’s one of the most widely known government programs, not many people know why it exists or how it came to be.
Because health insurance is not provided to all Americans as it is in many other industrialized nations, the U.S. Congress designed the Medicare program to foster the welfare of United States citizens.
Despite what many people may believe, Medicare is not a free health care program.
In fact, a great deal of the Medicare program’s benefits is actually funded by the citizens of the United States through payroll taxes.
Contributions through FICA, or the Federal Insurance Contributions Act, require that a payroll tax be automatically deducted from every working U.S. person’s wages.
These funds are then used to pay for the hospitals, doctors, and insurance companies that the participants of Medicare use. Overall, the Medicare program accounts for roughly 13 percent of the federal budget, with an annual cost estimated at over $275 billion.
How Medicare Began
Back in 1945, President Harry Truman originally proposed a health care insurance program for all Americans. Later on, President John F. Kennedy also pushed for health insurance for the aged.
At that time, health insurance plans were only utilized by about 56 percent of Americans who were age 65 or over – leaving a great many people without coverage at a time when they are likely to need it the most.
Therefore, after twenty years of debate, on July 30, 1965, President Lyndon Johnson signed into law title 18 of the Social Security Act. This amendment to the Social Security program is what subsequently became what is now known as Medicare.
When Medicare was originally created, it actually represented a troubled compromise of lawmakers that was patched together using some incompatible goals from those who enacted the legislation.
On the one hand, there were those who truly wanted to protect older citizens who were living on fixed incomes from a system that essentially forced them to spend all of their savings on medical care. On the other hand, though, there were those who argued for a voluntary system of health insurance that would be supported by government funds.
At the time that this law was passed, nearly one half of all Americans who were age 65 or older did not have health insurance, nor were many of these individuals able to find affordable medical care. Therefore, the idea for Medicare actually came from a desire for a national health care plan.
Yet, even those who favored the program had disagreements on a number of issues. For instance, they did not want seniors to feel that Medicare was a type of charity program. Still others had a fear that Medicare’s benefits would become diluted, thus making it nearly impossible to offer extensive coverage to those who were most in need of it.
Despite a great deal of criticism about socialized medicine, President Johnson truly believed that it was the duty of the U.S. government to provide health care insurance to the elderly residents of the United States.
As a result, this program was signed into effect. And, on the day it was enacted, President Truman was issued the first Medicare card as a tribute to his initiatives on providing this type of health care coverage to Americans.
Over time, the Medicare program has been updated, added to, and revised. In 2003, President George W. Bush modernized Medicare to include a prescription drug benefit (Medicare Part D). As time has moved forward, President Barack Obama continued to also push for a national health insurance program in the United States.
Medicare has gone through many changes over the years, beginning in 1972 when coverage was extended for those who are severely disabled, as well as for those with end stage renal disease.
In addition, in the 1970s, the responsibility for administering the Medicare program was turned over to the Health Care Financing Agency, or HCFA. (Later, the name of this entity was changed to the Centers for Medicare and Medicaid Services, or CMS.)
The goal of the CMS is to control health care costs that are associated with the programs that are assigned to it. This entity determines the rules and regulations that standardize the payments made for services. In addition, it also defines what type of care is reasonable for various health care needs, and it supervises the certification of Medicare providers.
Additional legislation passed in 2003 known as the Medicare Prescription Drug and Modernization Act, or MMA 2003, has so far added the most sweeping changes to the Medicare program.
More recently, in 2008, Congress enacted additional legislation titled Medicare Improvements for Patients and Providers Act, or MIPPA 2008. This act provided many generalized improvements in the Medicare program, but in particular it addressed changes to Medicare Advantage and Medicare Part D issues (you can read more about both these parts of Medicare).
Many of these changes included those having to do with low income subsidy qualification, PFFS plan restructuring, special needs plans redefinition, physician payments, Medicare Advantage marketing guidelines, and Medicare Advantage plan payment reductions.
One of the more prevalent parts to the MIPPA legislation included a provision for Medicare Supplement producers in that the law required the National Association of Insurance Commissioners, or the NAIC, to update Medicare Supplement policies.
Medicare is great for seniors and offers decent protection at a nice price, but lets be honest, there are some expensive deductibles and coinsurance that it does not cover. There are plenty of expenses that it doesn’t cover. One of the best ways to cover those holes is by purchasing additional coverage through a Medigap policy.
There are ten plans and they’re standardized across the U.S., which means they all have to cover the same expenses. The most basic plan is Plan A, which only fills in a few of the holes left by Medicare, while Plan F covers all of the unpaid expenses. Are you’re searching for Medicare Supplemental Plans in South Carolina or have questions about how coverage could differ based on the state you live in? We can answer your questions and help you to obtain the coverage you deserve.
Because each plan is different, it’s important for you to understand how your life can alter the best plan for you, like your finances, your health, your future, and all of the options that are available. Deciding which one is the best option can be difficult, if you need help deciding, our agents can walk you through the process to ensure that you get the perfect plan.
The costs of health care continues to get higher and higher every year. While it looks like these expenses are going to continue to go up, these Medigap plans are an excellent tool to offset those costs. Every year there are thousands of Medicare enrollees that find themselves facing massive hospital bills. These expenses can quickly drain a savings account and put wrench your retirement plans.
Because the plans are the same regardless of which company you buy them from, the only difference is going to be the monthly premiums. This is why it’s important to receive several quotes before you pick an insurance company. There are plenty of companies that sell supplemental insurance plans for Medicare, and it would take hours talking to different companies. Instead of wasting your time contacting companies, we can bring the best rates for you. Simply fill out the quote form with your information and it’ll populate with the best rates for you.
As you can see, Medicare has came a long way since it’s beginnings in 1965. It continues to provide health insurance for millions at affordable prices. If you have any questions about Medicare, Medicare Advantage, or a Medicare supplemental plan, our agents will be happy to help you in any way.