Medicare Overview

Medicare is the nation’s largest health insurance initiative. It was originally signed into law on July 30, 1965, by President Lyndon B. Johnson, as an amendment to Social Security legislation. Individuals are eligible for Medicare if:

• they are a U.S. citizen or have been a permanent legal resident for 5 continuous years and they are 65 years or older
• they are under 65, disabled and have been receiving Social Security or Railroad Retirement Board disability benefits for at least 24 months
• they have permanent kidney failure or need a kidney transplant
• they are eligible for Social Security Disability Insurance and have Lou Gehrig's disease

Many beneficiaries qualify for both Medicare and Medicaid. In some states, for those making below a certain income, Medicaid will pay Part B premium for them, and also pay for any drugs that are not covered by Part D. In 2007, Medicare provided coverage for 43 million Americans. Enrollment is expected to reach 77 million by 2031.

The original Medicare program has two parts: Part A (Hospital Insurance) and Part B (Medical Insurance). As of January 2006, Medicare Part D provides comprehensive prescription drug coverage. Medicare Advantage plans are another way for beneficiaries to receive their Part A, B and D benefits.