WHAT IS MEDICARE

WHAT IS MEDICARE


Before discussing Medigap and the other types of private
insurance available to supplement Medicare, it will be helpful
to review your Medicare benefits and identify the payment gaps.

Medicare is a federal health insurance program for people
65 or older, people of any age with permanent kidney failure,
and certain disabled people under 65. It is administered by the
Health Care Financing Administration (HCFA) of the U.S.
Department of Health and Human Services (HHS). The Social
Security Administration, also a part of HHS, provides
information about the program and handles enrollment.


Two Parts of Medicare


Medicare has two parts--Hospital Insurance (Part A) and
Medical Insurance (Part B). Part A is financed through part of
the Social Security (FICA) tax paid by workers and their
employers. You do not have to pay a monthly premium for
Medicare Pan A if you or your spouse is entitled to benefits
under either the Social Security or Railroad Retirement systems
or worked a sufficient period of time in federal, state, or
local government employment to be insured.

If you do not qualify for premium-free Part A benefits,
you may purchase the coverage if you are at least age 65 and
meet certain requirements. You also may buy Part A if you are
under age 65, were previously entitled to Medicare under the
disability provisions and you still have the same disabling
impairment but your disability benefits were terminated because
of your work and earnings. If you do not qualify for
premium-free Part A but had at least 30 quarters of covered
employment, the Pan A monthly premium in 1994 is $184. If you
had fewer than 30 quarters or no quarters of covered employment
the premium is $245 per month in 1994.

Part B is optional and is offered to all beneficiaries
when they become entitled to Part A. It also may be purchased
by most persons age 65 or over who do not qualify for
premium-free Part A coverage. The Part B premium, which most
Medicare beneficiaries have deducted from their monthly Social
Security check, is $41.10 per month in 1994.

You are automatically enrolled in Part B when you become
entitled to Part A unless you state that you don't want it.
Although you do not have to purchase Part B, it is a good buy
because the federal government pays about 75 percent of the
program costs.

Your Medicare card shows the coverage you have [Hospital
Insurance (Part A), Medical Insurance (Part B), or both] and
the date your coverage started. If you only have one part of
Medicare, you can get information about getting the other part
from any Social Security office.