In the United States, Medicare is a national social insurance program, administered by the U.S. federal government since 1966, that guarantees access to health insurance for Americans aged 65 and older who have worked and paid into the system, and younger people with disabilities as well as people with end stage renal disease (Medicare.gov, 2012) and persons with amyotrophic lateral sclerosis. As a social insurance program, Medicare spreads the financial risk associated with illness across society to protect everyone, and thus has a somewhat different social role from for-profit private insurers, which manage their risk portfolio by adjusting their pricing according to perceived risk.
In 2010, Medicare provided health insurance to 48 million Americans—40 million people age 65 and older and eight million younger people with disabilities. It was the primary payer for an estimated 15.3 million inpatient stays in 2011, representing 47.2 percent ($182.7 billion) of total aggregate inpatient hospital costs in the United States. Medicare serves a large population of elderly and disabled individuals. On average, Medicare covers about half (48 percent) of health care costs for enrollees. Medicare enrollees must cover the rest of the cost. These out-of-pocket costs vary depending on the amount of health care a Medicare enrollee needs. They might include uncovered services—such as long-term, dental, hearing, and vision care—and supplemental insurance.
To eliminate having to pay those uncovered costs individuals can purchase a Medicare supplemental insurance program from an independent insurance company that has been approved by the Center for Medicare & Medicaid Services (CMS). There are two types of supplemental programs available. The first is called a Medicare Supplemental plan or a Medigap plan. This type of plan runs in tandem with Original Medicare and pays whatever is not covered by Medicare parts A & B. The second program is call a Medicare Advantage plan which is a free standing insurance plan which takes the place of Medicare A, B and D and provides all the services for individuals through a private insurance company.
For a detailed explanation regarding Original Medicare, Medicare Supplements, Medicare Part D Rx plans and Medicare Advantage Plans call SBS today.