Social Security and Medicare

Chapter 7Medicare

Learning objectives

• Recognize when a spell of illness begins, according to Medicare.
• Select the type of patient who is most likely to use up lifetime reserve days.
• Recall the percentage of a physicians’ fees that Medicare Part B will cover. Identify what types of plans Medicare Part C plans most resemble.
• Recognize the type of benefits most likely to be excluded from a Medicare Supplemental (Medigap) insurance policy.

Overview

In addition to Social Security retirement and disability programs and Supplemental Security Income (SSI), the Social Security Administration (SSA) has operated the Medicare program since it became law in 1965. Medicare coverage is, with a few exceptions, available to older Americans beginning at age 65. It generally provides three distinct coverages.

Medicare Part A covers inpatient hospital services and certain out-of-hospital therapies. It also covers hospice care. Part B is more focused on doctors’ fees and outpatient procedures.

The most significant legislative change to Medicare, the Medicare Modernization Act, was enacted in late 2003. This historic legislation added an outpatient prescription drug benefit, Medicare Part D, and changed the program in other ways.

Medicare Advantage, commonly called Medicare Part C, which operates in conjunction with Medicare, could be considered a fourth coverage. From a tax standpoint, Medicare benefits are generally treated no differently from benefits of other types of insurance. The determination ...