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An Overview of Medicare

(See the full article for informational charts.)

Medicare is the federal health insurance program created in 1965 for people ages 65 and over, regardless of income, medical history, or health status. The program was expanded in 1972 to cover people under age 65 with permanent disabilities. Today, Medicare plays a key role in providing health security to 59 million older people and younger people with disabilities. The program helps to pay for many medical care services, including hospitalizations, physician visits, and prescription drugs, along with skilled nursing facility care, home health care, hospice care, and preventive services.

CHARACTERISTICS OF PEOPLE ON MEDICARE

Many people on Medicare live with health problems, including multiple chronic conditions, cognitive impairments, and limitations in their activities of daily living. Many beneficiaries live on modest incomes.

WHAT MEDICARE COVERS

Medicare covers many basic health services, including hospital stays, physician services, and prescription drugs.

BENEFIT GAPS AND SUPPLEMENTAL COVERAGE

In light of Medicare’s benefit gaps, cost-sharing requirements, and lack of an annual out-of-pocket spending limit, most beneficiaries covered under traditional Medicare have some type of supplemental coverage that helps to cover costs and fill the benefit gaps.

LOOKING TO THE FUTURE

Medicare faces a number of critical challenges, such as providing affordable, quality care to an aging population while keeping the program financially secure for future generations.

To address the health care financing challenges posed by the aging of the population, a number of changes to Medicare have been proposed. The potential effect of these changes on total health care spending and Medicare spending, as well as on beneficiaries’ access to quality care, coverage, and out-of-pocket spending, need to be evaluated.


Source: An Overview of Medicare
©2018 Kaiser Family Foundation

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