Medicare Tax
In 1965, Congress enacted the Social Security Act, and
established the Medicare tax as a way to care for the elderly in
this country. In addition to the creation of Medicare, Medicaid
was also established, and both operated under the Social
Security Administration's supervision; The SSA was a division of
the Health, Education and Welfare Department. Since that point
in time, many changes to the tax, the administration of the
program, and the eligibility of the recipients have seen much
change. This article discusses some of the basic information
about this tax, and what that means to the average citizen.
In 2001, the Health Care Financing Administration, or the HCFA
was renamed to the Centers for Medicare and Medicaid Services or
CMS; this is the administration that currently oversees the
Medicare program. Medicare, as it exists today, is the national
health insurance program for people age 65 or older, some
persons with disabilities, and people with permanent kidney
failure requiring dialysis or a kidney transplant.
The tax deducted from employees or wage earners paychecks each
week is the monies used to fund this health insurance program,
and everyone who earns wages must pay a certain percentage to
the Medicare tax program.
Who is responsible for this tax? The employee and the employer
pay a share of the tax, and each is an equal contribution. Since
the inception of the Medicare tax, the rates of contribution
have continued to increase, and the minimum wage earner
typically bears the majority of the contribution responsibility.
What are the benefits associated with Medicare eligibility, once
you've paid your tax and qualify for participation? Actually,
the benefits are amazing, and needed by the vast majority of
older Americans. Since medicine has managed to prolong the
average person's life span, and we are now living longer than
ever, Medicare benefits are needed now, more than ever. Until
the beginning of 2006, Medicare covered your medical, surgical,
and preventive maintenance needs. Beginning with 2006, however,
prescription medicine will also be added to the coverage
provided by Medicare. The benefits are many, for the individual
willing to learn about the options offered.
The current Medicare system is divided into three parts:
Medicare hospital insurance, Medicare medical insurance, and now
prescription drug coverage. The Medicare hospital insurance is
known as Medicare Part A, the medical insurance coverage is Part
B, and Prescription Drug Coverage is simply known as that. The
tax that has been deducted from payroll taxes each week over the
course of your working life, covers the Medicare Part A, or
hospital insurance; Medicare Part B, is available for a monthly
premium fee, and now Prescription Drug coverage is going to be
made available for all participants, at an additional premium
fee.
Medicare Part B has several options available, and with the
advent of the prescription drug coverage option, more of these
options are being reviewed and discussed among the elderly of
this country. What are the options available, and what do they
mean for participants? Medicare now allows for covered
participants to be enrolled as a part of the Original Medicare
Plan, or in what is known as Medicare Advantage Plans that offer
HMOs, PPOs, Private Fee-for-Service plans and other Medicare
Health Plans, that offer more options still. Which option is the
best choice? The answer to that question will depend upon
individual circumstances, and the medical needs of the
individual. The program as it exists today can be quite
complicated, and many of our elderly citizens are struggling
with the choices that are available, and how to pick and choose
among programs they do not completely understand offered by a
government that isn't offering a clear explanation of the
choices available. While many of the services that Medicare is
updating would actually benefit our older population, their
choices in making information available to the older population
and the confusion surrounding the programs has not been
conducive to participation.