Medicare is a federally funded health insurance provided to people who are 65 years or older, as well as to people with disabilities. Medicare is often used in place of other forms of health insurance; it is typically designed for those who cannot qualify for health insurance otherwise. All tax payers contribute to Medicare, no matter who they are; the amount of money taxed for Medicare is limited to the same maximum for every tax payer. In many cases Medicare does not cost much, if anything, but there are some situations wherein members may be required to pay a premium.
Medicare provides health insurance coverage for people age 65 and older, and in some cases for those who are disabled. Group insurance can cover people who are over age 65 if they are still working, at least in most circumstances. Individual or private insurance will not offer coverage to an individual who is age 64 ½ or older, which can be highly problematic for individuals who are not working. Policyholders should be aware of the age restriction so that they will not run the risk of being without coverage, even for a short period of time.
Group insurance does not necessarily have an age restriction, although that really all depends on the employer. Employees can opt to have group health insurance so long as they are employed by the company providing it; the problem occurs when they retire. When they stop working, after they have reached 65 years of age, people can then sign up for Medicare using SEP, the special enrollment period, because of the special circumstances. Typically Medicare has specified enrollment periods for people to join or make changes to their Medicare plans.
The Cost of Medicare
One reason that a person may choose to stay with group coverage is because their employer may pay for their premiums 100 percent. Generally, if a person chooses to keep group coverage over Medicare, the insurance is less expensive and offers better overall coverage. Medicare Part A generally does not cost the insured person anything, whereas Medicare Part B currently costs $110.50 per month. Medicare Advantage plans are typically very inexpensive as well, if they cost anything at all.
Medicare Doughnut Hole
Medicare presently has the dreaded doughnut hole, a term used to describe the time period during which Medicare does not pay for prescriptions. Medicare pays a specified amount per year for prescription coverage; once that amount has been met, Medicare stops paying for prescriptions and recipients must pay for their own prescriptions up to a certain amount. Once Medicare recipient pays the required amount, Medicare steps in and pays again. The doughnut hole is expected to be removed completely by 2020.
Medicare is provided to people who are permanently and totally disabled and to those who are 65 years old and over. Working citizens pay for Medicare through their taxes, and everyone is responsible to pay no matter what they earn. The fund is taken in the form of taxes at a certain percentage, not to exceed a certain amount per year for every tax payer. It is in place specifically to help retired individuals of a certain age, so that they are not left without medical care.