History

• Although the concept of Medicare was first created by President Truman in 1945, it was not officially signed into law until 1965 by President Johnson. Medicare was just one part of the Social Security Act of 1965. Despite a growing fear of socialized medicine, Johnson believed Medicare was a necessity, and in an effort to provide affordable insurance to elderly residents, he became the first U.S. president to approve a national health insurance policy.
  
  

Requirements

• Medicare benefits are available to all U.S. residents, regardless of their income level, but a few basic requirements must be met to qualify for coverage. First, you must be a permanent resident of the United States and have at least 10 years of working history. Additionally, you must be either 65 or older or permanently disabled and already receiving Social Security benefits. Individuals with end-stage kidney disease who require dialysis or a kidney transplant are also eligible for Medicare.
  
  

Types

• The two original parts of Medicare are known as Part A and Part B. The Part A policy, or hospital insurance, covers all hospital expenses such as meals, diagnostic tests, doctors' fees and room charges. Part B Medicare, on the other hand, provides standard medical care, including outpatient surgery, medical equipment and other primary care services. With the recently developed Part C policy, recipients can privatize their Medicare policy by selecting either an HMO or PPO plan. Finally, Part D Medicare provides prescription drug coverage for those who choose to purchase it.
  
  

Enrollment

• Once eligible, individuals should contact a Social Security office in their area to apply for benefits. However, those currently receiving Social Security benefits are automatically enrolled in Medicare Parts A and B, with the option to enroll in Part C or D if she desires. All other individuals must wait until the open enrollment period to apply for Medicare benefits, which begins three months before the applicant's 65th birthday and ends seven months afterward.
  
  

Funding

• Contrary to what you may think, Medicare does not provide free health care. In fact, the majority of the program's funding comes from taxpayers. The Federal Insurance Contributions Act, or FICA, is a 2.9 percent payroll tax that is automatically deducted from every citizen's paycheck. These funds are then transferred to a federal savings account and used to pay certified physicians, hospitals and private insurance companies that provide coverage through the Medicare program. With an estimated cost of $277 billion per year, Medicare costs take up about 13 percent of the nation's federal budget.