Medicare is a Federal health insurance program that pays for hospital and medical care for elderly and certain disabled Americans. Medicare serves more than 44 million enrollees (as of 2008). The program costs about $432 billion, or 3.2% of GDP, in 2007.
Medicare program consists of 2 parts. Medicare Part A, or Hospital Insurance (HI), helps pay for hospital stays, which includes meals, supplies, testing, and a semi-private room. This part also pays for home health care such as physical, occupational, and speech therapy that is provided on a part-time basis and deemed medically necessary. Care in a skilled nursing facility as well as certain medical equipment for the aged and disabled such as walkers and wheelchairs are also covered by Part A. Part A is generally available without having to pay a monthly premium since payroll taxes are used to cover these costs.
Medicare Part B is also called Supplementary Medical Insurance (SMI). It helps pay for medically necessary physician visits, outpatient hospital visits, home health care costs, and other services for the aged and disabled. For example, Part B covers: durable medical equipment, physician and nursing services, X-rays, laboratory and diagnostic tests, certain vaccinations, blood transfusions, renal dialysis, outpatient hospital procedures, some ambulance transportation, immunosuppressive drugs after organ transplants, chemotherapy, certain hormonal treatments, prosthetic devices and eyeglasses.
In general, individuals are eligible for Medicare if they are U.S. citizens or have been a permanent legal residents for 5 continuous years, and they are 65 years or older, or they are under 65, disabled and have been receiving either Social Security benefits or the Railroad Retirement Board disability benefits for at least 24 months from date of entitlement (first disability payment), or they get continuing dialysis for end stage renal disease or need a kidney transplant, or they are eligible for Social Security Disability Insurance and have amyotrophic lateral sclerosis (ALS-Lou Gehrig’s disease).
