Medicare started as an idea for a national insurance fund for people over the age of 65 by President Harry S. Truman, but Medicare was finally signed into law by President Lyndon B. Johnson in 1965. In fact, President Truman and his wife were the first Medicare beneficiaries. As of this year, nearly 65 million Americans have coverage under Medicare, and spending from the program accounts for around 20% of total healthcare or an average of more than $830 billion per year. 

The program was established to provide insurance coverage regardless of income, medical history, or health status. Medicare helps to pay for many medical care services, including hospitalizations, physician visits, prescription drugs, preventive services, skilled nursing facility and home health care, and hospice care.

When the program was created, it was called Original Medicare and has two parts—Part A and Part B.

• Part A covers inpatient hospital and skilled nursing care.
• Part B covers doctor visits and outpatient care.

Private insurance plans have started to play a more important role in the Medicare program. While initially created with the goal of improving patient choice and reducing costs, Medicare Advantage plans are improving choice and according to the KFF.com, enrollment has risen to 48 percent of the eligible Medicare population.

• Medicare Advantage plans (Part C) combine Part A and Part B coverage. They often include drug coverage and other benefits you don’t get with Original Medicare.
• Medicare prescription drug plans (Part D) help pay for medications. You can get a standalone Part D plan or get a Medicare Advantage plan that includes drug coverage.
• Medicare supplement insurance (Medigap) helps pay some or all costs not paid by Original Medicare (deductibles, copays and coinsurance).

Original Medicare and many Medicare Advantage Health plans charge premiums—a fixed amount that you pay each month for your coverage. According to the Kaiser Family Foundation, 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. 

Medicare provides protection against the costs of many health care services, but the original Medicare has relatively high deductibles and cost-sharing requirements and places no limit on beneficiaries’ out-of-pocket spending for services covered under Parts A and B. 

Original Medicare may not pay for some preventive services like dental, vision, or hearing aids, which can cause gaps in needed care for many seniors. In light of Medicare’s benefit gaps, most beneficiaries covered under original Medicare have some type of supplemental coverage that helps cover beneficiaries’ costs and fill the benefit gaps.

• If you have minor health issues, you may look into original Medicare, just remember you’ll have to cover your own dental and vision needs.
• If you take several medications, perhaps a Medicare Supplement plan will help cover your monthly costs.
• If you have several chronic conditions, maybe a Medicare Advantage plan is preferred.

The Medicare program helps many in the U.S. who may not otherwise have access to care and closes a lot of gaps in healthcare coverage. As Medicare continues to grow and expand, companies like Heal that provide personalized, at-home care will become even more critical for the long-term health and improved outcomes of its members. We hope this informational article is helpful when choosing the right Medicare Advantage plan for you.