Medicare

Medicare

Medicare is a federal program, administered by the state and federal governments, that provides low-cost health insurance to seniors over age 65 and to many disabled people under that age. Medicare is paid for through a payroll tax, under which employers and employees each pay 1.45% of the employee’s salary to support the Medicare program.

Medicare is divided into four parts:

Medicare Part A covers hospital care and some other forms of long-term care. These are covered by Medicare without premiums, though deductibles and copayments sometimes do apply.

Medicare Part B is medical insurance, covering doctor visits, treatments and the like. Premiums and copayments apply to most expenditures and premiums are assessed on a sliding scale, based on income. Even for high earners, though, Medicare premiums are much lower than those assessed for typical health insurance plans.

Medicare part C is called “Medicare Advantage” and covers private insurance that supplements Medicare. These plans are partially standardized and their rules are governed by federal law, though the plans themselves are administered by private insurance companies.

Medicare Part D covers prescription drugs that are not covered under Parts A and B. this optional additional insurance is also heavily subsidized by the Medicare program, and does require payments of premiums and co-pays.