nEstablished in 1965 as part of LBJ’s Great Society
program, Medicare is the federal
government’s health insurance program
for senior citizens.
nBefore they become eligible for Medicare, workers pay a
tax in addition to their
Social Security contributions to help support the system. When they go on Medicare, seniors
pay a monthly premium.However, the bulk of Medicare costs are borne by the federal government’s general fund.
nThe Medicare program has two components:
nHospital Insurance (Part A), which helps pay for inpatient hospital services, skilled nursing facility services, home health
services, and hospice
nMedical Insurance (Part B), which covers doctor
services, outpatient hospital
services, medical equipment and supplies, and other health services and supplies. Beneficiaries are subject to
“deductibles” when they