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Medicare Law Information
What Is Medicare?
Medicare is a program of health insurance for the elderly and
disabled in the USA. It was first passed on July 30, 1965 as amendments to
Social Security legislation.
Medicare is partially financed by a tax of 2.9% (1.45% withheld from the worker
and a matching 1.45% paid by the employer) on wages or self-employed income to a
specified maximum (currently there is no maximum).
Generally, Medicare is available for people age 65 or older, younger people with
disabilities, and people with End Stage Renal Disease (permanent kidney failure
requiring dialysis or transplant). People under 65 and disabled must be
receiving disability benefits from either Social Security or the Railroad
Retirement Board for at least 24 months before automatic enrollment occurs.
Medicare has two parts: Part A (Hospital Insurance), and Part B (Medicare
Insurance, helps cover doctors' services, outpatient hospital care, and some
other medical services that Part A does not cover). Neither Part A nor Part B
pays for all of a covered person's medical costs. The program contains
deductibles and co-pays (payments due from the covered individual). Certain
medical needs such as prescriptions (until 2006) are excluded. Part A is paid
from the U.S. Government's general fund. Part B is paid for by the general fund
and by contributions from the covered persons by way of a deduction from their
monthly social security check.
In 2003, Medicare provides health care coverage for 40 million Americans.
Enrollment is expected to reach 77 million by 2031, when the Baby Boom
generation is fully enrolled.
It is administered by the Centers for Medicare and Medicaid Services (CMS)
(formerly the Health Care Financing Administration) in the United States
Department of Health and Human Services.
With regard to physicians, Medicare uses the Resource-Based Relative Value Scale
(RBRVS) to determine how much money each doctor should earn, although it is
criticized for not paying doctors enough because of the low conversion factor.
Because of the nature of RBRVS, it is possible to pay all doctors more or less
depending on how much money the person paying (CMS in this case) is willing to
pay.
For institutional care such as hospital and nursing home care, Medicare uses
prospective payment systems. A prospective payment system is one in which the
health care provider receives a set amount of money for each episode of care
provided to a patient, regardless of the actual amount of care used.
A prescription drug coverage was added in 2003 to take effect in 2006. Medicare
also covers medical devices, such as scooters and powerchairs for those with
mobility impairments.
Like all health systems, whether funded and managed by governments or privately,
Medicare faces continuing severe financing issues. In the United States, health
care is a matter of intense continuing public debate.
Part of the cost of Medicare is fraud (See insurance fraud), which Medicare
estimates costs it billions of dollars a year.
Medicare Legislation
* 1960 PL 86-778 Social Security Amendments (Kerr-Mill aid)
* 1965 PL 89-97 Medicare
* 1988 PL 100-360 Medicare Catastrophic Coverage Act
* 2003 HR 1 Medicare Prescription Drug, Improvement, and Modernization Act
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