Medicare
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Medicare is a health insurance program created by the United States government, covering people who are either age 65 and over, or meet other special criteria. It was first passed on July 30, 1965 by President Lyndon B. Johnson as amendments to Social Security legislation. Medicare, is much like Social Security in terms of the people it serves, its popularity, and most unfortunately its fragile future. The program serves forty-one million Americans and costs more than $277 billion per year, nearly thirteen percent of the federal budget. Current projections show that Medicare could go broke under the weight of the aging baby boom generation by 2019, this is long before Social Security, which should stay solvent until 2042.(source:1 www.publicagenda.org)
Medicare is partially financed by payroll taxes forced by the Federal Insurance Contributions Act (FICA) and the Self-Employment Contributions Act of 1954. In the case of employees, the tax is equal to 2.9% of the wages, salaries and other compensation in connection with employment. Until December 31, 1993, the law provided a maximum amount of wages on which the Medicare tax could be imposed each year. Beginning January 1, 1994, the compensation limit was removed. In the case of self-employed individuals, the tax is 2.9% of net earnings from self-employment, and the entire amount is paid by the self-employed individual. (source: 3 www.wikipedia.com)
New Drug Coverage Program
In 2003, the federal government added prescription drug coverage to Medicare, the biggest change to the program since it was created in 1965. The actual benefit began in January 2006. Supporters say with elderly Americans more and more dependent on prescription drugs the benefit covers a vital need. Critics say the program is expensive and offers little actual coverage. (source: 3 www.wikipedia.com)
The Medicare Drug Coverage Helps All Beneficiaries Pay For Prescription Drugs, No Matter How They Paid Before. The typical senior who previously had little or no drug coverage will end up spending about half of what he or she used to spend on prescription drugs each year. This adds up to an average annual savings of $1,100 a year. Beneficiaries of the program can choose from a number of private plans to find the one that best serves them. (source: 2 www.whitehouse.com)
With this, the competition to serve seniors