Medicare History
Medicare is a Federal health insurance program that primarily covers people aged 65 and older, as well as certain younger individuals with disabilities and those with end-stage renal disease.
The program was established in 1965 under President Lyndon B. Johnson's administration as part of the Social Security Act.
Medicare is divided into 4 parts, including:
- Part A (hospital insurance),
- Part B (medical insurance),
- Part C (Medicare Advantage Plans), and
- Part D (prescription drug coverage).
Enrollment in Medicare is automatic for most individuals once they reach the age of 65 and have been receiving Social Security benefits for at least four months. However, individuals can also enroll voluntarily if they meet certain eligibility criteria.
Medicare is funded through a combination of
- Payroll taxes (2.9%)
- Medicare Part B premiums paid by beneficiaries,
- and general revenue from the Federal government.
The program is administered by the Centers for Medicare & Medicaid Services (CMS), which is a part of the United States Department of Health and Human Services.
Over the years, Medicare has undergone various reforms and changes to address rising healthcare costs, improve coverage, and enhance beneficiary choices. One of the significant changes was the introduction of Medicare Part D in 2006, which provided prescription drug coverage through private insurance plans.
Additionally, the Affordable Care Act (ACA) of 2010 made several changes to Medicare, including closing the "donut hole" gap in prescription drug coverage and providing free preventive care services.