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Health Insurance Guide
The Advantages of Medicare
Medicare is a form of health insurance provided by the US Government and is available to most US citizens and permanent residents over the age of 65. In addition, Medicare benefits are provided for individuals under the age of 65 where they are suffering from certain disabilities.
Anybody who has required medical treatment recently will be aware of the advantages of Medicare and, whatever your thoughts about it, few would question its undoubted benefits.
Medicare was initially introduced in 1965 and provided hospital insurance under Part A of the plan and medical insurance under Part B of the plan. In 1977 the government extended the plan and introduced Part C, which allowed participants to receive health care benefits through private insurance plans.
Then, in 2003, the plan rules were changed and Medicare Advantage was introduced to offer coverage which was equivalent to that provided under Parts A and B of the plan.
One criticism leveled at Medicare for many years was the fact that it rarely provided coverage for prescription drugs and this was corrected in 2006 with the introduction of Part D to provide drug coverage. Part D is available to all those people eligible for Parts A and B of the plan.
Medicare is funded from a payroll tax with both employers and employees paying an equal amount (currently 1.45%, giving a total for both employer and employee of 2.9%). For those who have paid this tax for a total of 40 quarters, Medicare Part A is free of charge. For employees with less than 40 quarters worth of contributions, Medicare Part A can be purchased for a monthly premium which, for ease, is normally deducted from the employees salary.
In all cases individuals are required to pay a monthly premium for Medicare Part B and this is normally deducted from the individual's Social Security check.
While the advantages of Medicare are clear in an age of ever rising medical costs, the major drawback of the scheme lies in the cost borne by the US Government, with some people predicting that, if the plan continues in its present form, the government will not be able to sustain the plan beyond about 2018. This results from the fact that the number of people eligible for coverage is growing at a faster rate than the number of workers paying into the plan.
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