When established in 1965, the Medicare program aimed its sites on the protection of our eldest members of our community who are already eligible for Social Security. As recently as 2015, Medicare provided benefits to more than fifty million Americans aged 65 and over.
Funded by payroll taxes, surtaxes, and premiums, Medicare is available for Americans that have paid into the system through their payroll taxes, but a demographic bubble, in the form of the quickly aging baby boomer generation, threatens to swamp the existing system’s resources. At the heart of the problem is not only the increased numbers of seniors moving into the system, but medical advances have extended the amount of time each person stays in the program.
The Basics of Medicare Benefits
Benefits under the Medicare program are designed to primarily pay for such medical needs as acute care, hospital stays, and doctor visits. Additionally, Medicare benefits can be used for the cost of long-term care, but it has its limitations. For instance, recipients can stay up to a hundred days in a nursing facility following a hospital stay of three or more days. To be eligible for this benefit, the nature of the care must be rehabilitative. Long-term care that requires extended nursing care or 24/7 hospice care is not covered under the program.
Another gap in coverage is found in dealing with the cost of prescription drugs. These are not covered under the basic Medicare program, and this includes needed drugs to be taken daily to combat chronic health conditions. With the vast majority of seniors suffering from at least one such condition, and a significant percentage suffer from two or three chronic diseases, lack of affordable coverage can place these life saving drugs out of reach.
As it stands, basic Medicare benefits cover approximately half the costs of associated medical expenses, so retires look to purchasing gap coverage to bridge these divides. Supplemental policies are available through the Medicare program.
Supplemental Medicare Coverage
To help cover the range of expenses that seniors can expect to contend with as they age, the Medicare program offers gap coverage to help handle specific components of their care. There are currently four Medicare supplemental plans seniors can explore.
Medicare Part A—covers the cost of hospital stays and hospice services.
Medicare Part B—helps pay for outpatient services.
Medicare Part C—allows more control over other Medicare components to optimize services.
Medicare Part D—covers the cost of self-administered drugs.
Medicare provides a much needed protection against skyrocketing medical costs, and retirees can enjoy a basic level of care regardless of the market forces driving each medical procedure through the roof. How the system will absorb the incoming baby boomers is a question yet to be answered.