The federal government’s role of providing the nation’s seniors with some degree of financial security was established by the Social Security Act of 1935. In its original form, Social Security was designed to provide retirement benefits for workers, to be drawn upon when he or she reached age 65. Subsequently added to the program were benefits for unemployment compensation, workers’ compensation due to injuries that were sustained on the job, and personal disability and survivor benefits for a deceased worker’s family. In 1965, the Medicare Act was signed into law. Its purpose was to provide affordable health care for older Americans and to prevent the impoverishment of senior citizens due to health care costs. This is when the Medicare program began.
So, what exactly is Medicare?
Medicare is a federal health insurance program for persons age 65 or older, persons of any age with permanent kidney failure, and certain disabled persons. The Medicare program covers people over age 65 – regardless of their income and assets – as well as certain disabled individuals under age 65. The Medicare program does not provide medical care directly. Instead, it either pays doctors and hospitals directly for their services or it reimburses patients who have paid the bills themselves.
At this time, Medicare is divided into four parts. These are:
In a nutshell, Medicare provides Part A coverage, while Part B is optional. Medicare Parts A and B are considered the “Original Medicare Plan”. With the Original Medicare plans, you can choose your own doctors and health care providers.
Medicare Part C combines Part A and Part B coverage. Private insurance companies that are approved by Medicare provide this coverage. Generally, you must see doctors in a network, however, your costs may be lower than in Medicare Parts A and B, and you may get extra benefits. Medicare Part C is also referred to as “Medicare Advantage” and it works similar to an HMO (Health Maintenance Organization) or a PPO (Preferred Provider Organization).
Medicare Part D, prescription drug coverage, is optional and it consists of private drug companies that are approved by Medicare. Part D covers different drugs, but medically necessary drugs must be covered.
Contrary to popular belief, Medicare does not cover all medical expenses. For instance, it does not cover routine physicals, eye and hearing exams, dental care, self-administered prescription drugs and many other medical products and services. Many long-term health problems requiring custodial or private nursing care, such as Alzheimer’s disease, are also not covered. Medicare also does not cover custodial care – care that is primarily for the purpose of helping with daily living or meeting personal needs – when that is the only kind of care that a patient needs.
Much of the care provided in nursing homes to people with chronic, long-term illness or disabilities is considered custodial care. And, even if an individual is receiving care from a participating home health agency, Medicare does not pay for services that are not reasonable and necessary for the diagnosis of a specific illness or injury. In addition, if a doctor places an individual in a hospital or a skilled nursing facility when the kind of care that the person needs could be provided elsewhere, the individual’s stay will not be considered reasonable and necessary, and Medicare will not pay for the stay. In addition:
Medicare does, however, cover certain medical conditions and items in hospitals and other settings. Some items are covered under Medicare Part A, and some are covered under Medicare Part B. As long as you have both Medicare Part A and Medicare Part B, these services and items are covered whether you have the original Medicare Plan or you belong to a Medicare Advantage Plan, with Medicare Part C.