Traditional Medicare, also known as original Medicare, is the fee-for-service health insurance program administered by the federal government to provide care for the elderly and disabled of the United States. According to the SHIP Resource Guide, published by the Health Assistance Partnership, about 77 percent of those enrolled in Medicare decide to stick with traditional Medicare rather than switch to a private health plan.
History and Implementation
The traditional Medicare program was signed into law by President Lyndon B. Johnson on July 30, 1965. Former President Harry Truman was the first Medicare beneficiary. Medicare is currently overseen by the regulatory agency, the Centers for Medicare & Medicaid Services (CMS). Traditional Medicare is completely funded by federal monies.
Eligibility
Traditional Medicare covers four classes of people: those 65 and older, the disabled, patients with End-Stage Renal Disease and those with Amyotrophic Lateral Sclerosis (ALS, also known as Lou Gehrig's Disease). Those with disabilities are eligible once they have received SSDI payments for at least 24 months. End-Stage Renal Disease patients are eligible if they are receiving dialysis or have had a kidney transplant. Those diagnosed with ALS are eligible the first month they receive an SSDI payment.
Coverage
There are two parts to traditional Medicare: Part A and Part B. Part A covers inpatient hospital care, and Part B covers outpatient care, such as doctor's visits. Beneficiaries can see any doctor that accepts Medicare anywhere in the United States. Medicare Interactive reports that most doctors do take traditional Medicare.
Part A covers time spent in a hospital or skilled nursing facility (plus associated costs), home health care and hospice care. Part B covers services performed by doctors, durable medical equipment, ambulance care, covered preventive care, outpatient skilled therapies, laboratory tests, mental health care and some prescription drugs. This is not an exhaustive list, and beneficiaries should refer to their Medicare & You Handbook in order to become more familiar with everything that Medicare covers.
Costs
If a beneficiary has worked in the United States for 10 or more years then the monthly premium for Part A is free. If not, then he may have a monthly charge. Otherwise, for Part A there is a deductible for inpatient hospital care that beneficiaries must pay out of pocket, and some services require a co-insurance.
Part B requires a monthly premium that increases each year. The premium was $96.40 in 2009 and 2010. There is a small annual deductible and for all Part B services, the beneficiaries pay a 20 percent co-payment, unless receiving mental health treatments, which have a 45 percent co-payment.
Medigaps
Medigaps are a supplemental insurance available for purchase from private companies that are designed exclusively to work with traditional Medicare. Medigaps fill in some of the out of pocket costs left with traditional Medicare, including premiums, deductibles and co-insurances.
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