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Since 1965 when then President Lyndon Johnson signed it into law, Medicare has been a part of Social Security legislation. The original set of revisions had two parts, Part A or Hospital Insurance and Part B or Medical Insurance. As of 2008, 45 million Americans were enrolled in the single-payer program. By 2030, the baby boom generation is expected to be fully enrolled, bringing the number of enrollees to a projected 78 million individuals. The program size makes it the largest social service program of its type in the world.

The program is partially funded by employer and employee payroll taxes collected by the Federal Insurance Contributions Act (FICA) and the Self-Employment Contributions Act of 1954. The cost of a payroll-based tax is 2.9 percent, of which half is paid by the employee and half by the worker. When the beneficiary is self-employed, the entire amount must be paid into the program.

Eligibility for the original Part A and B of this program is offered to any U. S. Citizen age 65 or older. The premium costs are waived if the worker has paid into FICA for ten years. Part A coverage is the portion available for hospital expenses. The inpatient hospital costs such as physician and nursing care, medicines and medical procedures and tests are all covered. There is a deductible cost that must be paid out-of-pocket. Part A also covers convalescent care in a skilled nursing facility. Again, deductibles and co-payments apply.

Part B coverage is for the purpose of medical costs. It is optional, but unless the individual or spouse is working, there is a penalty for not enrolling in the program. Part B covers many of the outpatient costs. Some of the benefits under Part B include physician and nursing services, administration of medications by a physician, medical equipment, prosthetic equipment and other related equipment and supplies.

Private insurance plans can be used to pay benefits under Part A and Part B, Part C became operable under the 2003 Prescription Drug, Improvement and Modernization Act. This part of the program adds the ability to cover prescription medications. The cost of Part C premiums are in addition to those of the original program parts.

The latest addition to the program is Part D. It is intended to pay for stand-alone medication plans. Sometimes it is in conjunction with Part C plans. This part of the programs requires that those receiving benefits contribute out-of-pocket expenses as well as premiums.

Most Part A beneficiaries don’t have to pay premiums. The premiums for Part B are $96.40 monthly. These premium costs are automatically deducted from Social Security retirement benefits payments. The type of program and level of coverage determines the premium costs for Parts C and D. With some of the Part C plans, part or all of the Part B premium costs are returned to the enrollees.

The entire Medicare program is administered by the federal government. Complaints about fraud and abuse are common, but they are usually directed at hospitals, physicians and surgeons who bill the program for services. The changes in U. S. Law will affect the provision of services for health care in the future, but it remains to be seen what the extent of the changes will be.

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