A safety net for your golden years, Medicare is the federal government's medical insurance plan to ensure that those 65 and older can afford medical care. Passed in 1965 by President Lyndon B. Johnson, the program quickly expanded to cover the disabled, and those in kidney failure and hospice. Most recently, Medicare offers prescription drug coverage. Medicare is organized into Parts A and B. Part A is hospitalization insurance. Those with 40 or more quarters of employment pay no premium. Part B is basic medical insurance, with premiums in 2010 of about $100 per month, depending on income.
Medicare A: The Hospital
If you are 65 or older or disabled, Uncle Sam will pick up the hospital tab after a deductible of $1,068 over the first 60 days. The maximum hospital stay is 150 days. To qualify, you or your spouse must have worked and paid Medicare taxes for at least ten years. If you don't qualify, you can pay a premium to be allowed into the system. Medicare A also pays for home health, hospice, nursing homes and even bariatric weight loss surgery within certain limits.
Medicare B: Doctor Visits
Medicare B keeps prices lower by fixing a standard price for medical care. The doctor can only charge you the Medicare-allowed amount. After your yearly deductible of $135, Medicare pays 80% of your medical bills. Some buy additional insurance to cover the 20% not covered by Medicare, as well as for tests and procedures that may not be covered.
Medicare Part D
In 2006 Medicare expanded coverage to subsidize the cost of prescription drugs. Most people pay about $35 a month and have a deductible of $310. Seventy-five percent of your drug costs are covered after that, up to a maximum of $2,830. Then you pay the full amount unless you have costs of $4,550 or more, after which the government steps in again and pays 95 percent. Those who meet income limits and have few assets can qualify for extra aid. Many who qualify as disabled under Medicare also receive Medicaid assistance, which is administered by the states. These dual eligible individuals pay no medical costs.
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