“Medicare is a federal health insurance program that pays for covered health care services for most people aged 65 and older and for certain permanently disabled individuals under the age of 65.

“An estimated 55 million individuals (17.3% of the U.S. population) were enrolled in Medicare in 2017. The program accounted for $706 billion (21.2% of overall HCE); this share is about 10 percentage points higher than Medicare’s percentage of HCE in 1970 (Figure 2). In 2017, most of the spending was for hospital care and physician and professional services (Figure 1).”

Source: Congressional Research Service. In Focus: U.S. Health Care Coverage and Spending. Updated March 21, 2019.

According to the federal Center for Medicare & Medicaid Services:

Medicare is a health insurance program for:

• People age 65 or older.
• People under age 65 with certain disabilities.
• People of all ages with End-Stage Renal Disease (permanent kidney failure requiring dialysis or a kidney transplant).

Medicare has different parts that help cover specific services:

Medicare Part A (Hospital Insurance) – Part A helps cover inpatient care in hospitals, including critical access hospitals, and skilled nursing facilities (not custodial or long-term care). It also helps cover hospice care and some home health care. Beneficiaries must meet certain conditions to get these benefits. Most people don’t pay a premium for Part A because they or a spouse already paid for it through their payroll taxes while working.

Medicare Part B (Medical Insurance) – Part B helps cover doctors’ services and outpatient care. It also covers some other medical services that Part A doesn’t cover, such as some of the services of physical and occupational therapists, and some home health care. Part B helps pay for these covered services and supplies when they are medically necessary. Most people pay a monthly premium for Part B.

Medicare Part D (Prescription Drug Coverage) – Medicare prescription drug coverage is available to everyone with Medicare. To get Medicare prescription drug coverage, people must join a plan approved by Medicare that offers Medicare drug coverage. Most people pay a monthly premium for Part D.

Source: Medicare Program – General Information. Center for Medicare & Medicaid Services. Last accessed on August 18, 2018.

Fact Items Related To Medicare

• Medicare Eligibility
  “Medicare is the federal health insurance program created in 1965 for people ages 65 and over, regardless of income, medical history, or health status. The program was expanded in 1972 to cover certain people under age 65 who have a long-term disability. Today, Medicare plays a key role in providing health and financial security to ...
• Characteristics of People on Medicare
  “Many people on Medicare live with health problems, including multiple chronic conditions and limitations in their activities of daily living, and many beneficiaries live on modest incomes. In 2016, nearly one third (32%) had a functional impairment; one quarter (25%) reported being in fair or poor health; and more than one in five (22%) had ...
• Medicare Part A
  “Part A covers inpatient hospital stays, skilled nursing facility (SNF) stays, some home health visits, and hospice care. Part A benefits are subject to a deductible ($1,364 per benefit period in 2019). Part A also requires coinsurance for extended inpatient hospital and SNF stays.”Source: Issue Brief: An Overview of Medicare. Kaiser Family Foundation. February 2019. ...
• Medicare Part B
  “Part B covers physician visits, outpatient services, preventive services, and some home health visits. Many Part B benefits are subject to a deductible ($185 in 2019), and, typically, coinsurance of 20 percent. No coinsurance or deductible is charged for an annual wellness visit or for preventive services that are rated ‘A’ or ‘B’ by the ...
• Medicare Part C
  “Part C refers to the Medicare Advantage program, through which beneficiaries can enroll in a private health plan, such as a health maintenance organization (HMO) or preferred provider organization (PPO), and receive all Medicare-covered Part A and Part B benefits and typically also Part D benefits. Enrollment in Medicare Advantage plans has grown over time, ...
• Medicare Part D
  “Part D covers outpatient prescription drugs through private plans that contract with Medicare, including stand-alone prescription drug plans (PDPs) and Medicare Advantage plans with prescription drug coverage (MA-PDs). In 2019, beneficiaries have a choice of 27 PDPs and 21 MA-PDs, on average. The Part D benefit helps pay for enrollees’ drug costs and provides coverage ...
• Medicare Premiums and Other Costs
  “Most persons aged 65 or older are automatically entitled to premium-free Part A because they or their spouses paid Medicare payroll taxes for at least 10 years. Persons under the age of 65 who receive cash disability benefits from Social Security for at least 24 months and individuals of any age with end-stage renal disease ...
• Total Medicare Spending
  “Medicare spending is driven by a variety of factors, such as the level of enrollment, the complexity of medical services provided, health care inflation, and life expectancy. The Congressional Budget Office (CBO) estimates that total Medicare spending in 2019 will be about $772 billion; of this amount, about $749 billion will be spent on benefits. “CBO ...
• Medicare Financing
  “The Medicare program has two separate trust funds—the Hospital Insurance (HI) Trust Fund, which finances Part A, and the Supplementary Medical Insurance (SMI) Trust Fund, which finances Parts B and D. (Part C payments are made in appropriate parts from both the HI and SMI Trust Funds.) Both funds are maintained by the Department of ...

Health Systems Facts is a project of the Real Reporting Foundation. We provide reliable statistics and other data from authoritative sources regarding health systems in the US and several other nations.

Page last updated March 14, 2021 by Doug McVay, Editor.