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Medicare - Overview


Logo of Medicare program, with text 'Medicare' in white letters superimposed over waving U.S. Flag on blue background, as used on website.Title XVIII of the Social Security Act, entitled "Health Insurance for the Aged and Disabled," is commonly known as "Medicare." As part of the Social Security Amendments of 1965, the Medicare legislation established a health insurance program for aged persons to complement the retirement, survivors and disability insurance benefits under Title II of the Social Security Act.

NOTE: For information about Medicare coverage for SSDI beneficiaries, see: Medicare - Continuing Coverage.

When first implemented in 1966, Medicare covered only most persons age 65 and over. By the end of 1966, 3.7 million persons had received at least some health care services covered by Medicare. In 1973, other groups became eligible for Medicare benefits: persons who are entitled to Social Security or Railroad Retirement disability benefits for at least 24 months; persons with end-stage renal disease (ESRD) requiring continuing dialysis or kidney transplant; and certain otherwise non-covered aged persons who elect to buy into Medicare, by paying a premium for Medicare coverage. The Medicare, Medicaid, and SCHIP Benefits Improvement and Protection Act of 2000 (Public Law 106-554) allowed persons with Amyotrophic Lateral Sclerosis (Lou Gehrig's Disease) to waive the 24-month waiting period.

Medicare has traditionally consisted of two parts: Hospital Insurance (HI), also known as "Part A," and Supplementary Medical Insurance (SMI), also known as "Part B." A newer, third part of Medicare, sometimes known as "Part C", is the Medicare Advantage (formerly Medicare+Choice) program, which was established by the Balanced Budget Act (BBA) of 1997 (Public Law 105-33) and which expanded beneficiaries' options for participation in private-sector health care plans. When Medicare began on July 1, 1966, there were 19.1 million persons enrolled in the program. In 2003, over 41 million people were enrolled in one or both of Parts A and B of the Medicare program, and 5 million of them have chosen to participate in a Medicare Advantage plan.

The newest part of Medicare, Prescription Drug Coverage (also referred to as "Part D") was authorized by the Medicare Prescription Drug, Improvement and Modernization Act (MMA) of 2003. This landmark legislation provided seniors and people living with disabilities with a prescription drug benefit for the first time. All Medicare beneficiaries, except those who already had Medicaid outpatient drug coverage, were able to enroll in Medicare approved drug discount card programs, with benefits beginning in June 2004, and continued until the Medicare prescription drug benefit was implemented in 2006.

NOTE: Medicare enrollment data are based on estimates prepared for the 2003 annual report of the Medicare Board of Trustees to Congress. Medicare benefits, administrative costs, and total disbursements for 2002 are actual amounts for the calendar year, as reported by the Department of the Treasury.

Much of the material in this and the related topics below is drawn from a HCFA (now CMS) report prepared by Mary Onnis Waid entitled "Brief Summaries of Medicare and Medicaid", dated June 25, 1998, and updated periodically. These topics are based on the November 1, 2003 revision, available at:

See these topics for additional information:

     Medicare Premiums, Deductibles, and Co-Insurance

     Medicare - Coverage

     Medicare - Managed Care Plans

     Medicare - Financing, Liabilities, and Payments

     Medicare - Claims Processing

     Medicare - Administration

     Medicare - Data Summary

     Medicare - Other Considerations

     Relationship of Medicaid and Medicare

     Medicare (Part D) Prescription Drug Coverage

See Also:

Social Security Administration online Benefits Eligibility Screening Tool (BEST) logoThe Social Security Administration operates an online Benefits Eligibility Screening Tool (BEST) that can help you determine if you are eligible for Medicare, Social Security Disability Insurance (SSDI), Supplemental Security Insurance (SSI), and other programs. If you are connected to the Internet, go to

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