- Section 1 Introduction
- Introduction
- Federal Government Administration
- Fundamentals of Medicare: State Responsibilities
- Fundamentals of Medicare: Participating Providers
- Voluntary and Involuntary Termination of Provider Agreement
- Disclosure of Health Insurance Information
- Privacy Act
- National Provider Identifier
- Legacy Provider Numbers/Provider Transaction Access Numbers (PTANs)
- Medicare Administrative Contractors
- Fundamentals of Medicare: Information References
- Acronyms
- Fundamentals of Medicare: Glossary of Terms
- Section 2 Medicare Basics
- The History of Medicare
- What Is the Medicare Program and How Is It Funded?
- Medicare Eligibility and Premiums
- The Social Security Administration and Medicare Enrollment
- The Medicare Card
- Medicare Part A
- Inpatient Hospital Care
- Skilled Nursing Facility Inpatient Care
- Home Health Care Benefit
- The Hospice Benefit
- Medicare Part B Medical Insurance
- Fundamentals of Medicare - Medicare Program Exclusions
- Medicare Advantage Organizations
- Medicare Secondary Payer
- Supplemental Insurance
- Coordination of Benefits Trading Partners
- Section 3 Fraud and Abuse
- Section 4 Getting Ready to Bill Medicare
Section 2: Medicare Basics
What Is the Medicare Program and How Is it Funded?
Medicare is a federally funded health insurance program for:
- People age 65 or older
- Certain individuals under age 65 who qualify due to disability
- People with ESRD—permanent kidney failure requiring dialysis or a transplant.
When Medicare first started, there were two “parts,” known as Medicare Part A and Medicare Part B. In January 2006, Medicare Part D was added. This is a new prescription drug coverage that a beneficiary can join. Part D will cover the name brand and generic drugs. For additional information visit the CMS website at:
This guide provides information on the various Medicare Program options that are available to the Medicare beneficiary.
Whether a service is covered under the Medicare Part A component or the Medicare Part B component, it is important to note that beneficiaries must select providers who are participating with Medicare. If their choice of a physician or a hospital is one who is not participating, Medicare will not make payment for the services unless it involves an emergency situation. However, since a beneficiary is not required to be enrolled in both Medicare Part A and Medicare Part B, Medicare cannot make payment for any service rendered that is covered under a component of the Medicare program in which the beneficiary is not enrolled. For example, Medicare will not pay for emergency room services for a beneficiary who is not enrolled in Medicare Part B, but may pay for inpatient services rendered to that beneficiary if he/she is subsequently admitted as an inpatient to the hospital.
Medicare Part A hospital insurance is financed through a payroll tax paid by employees, employers, and self-employed persons. The proceeds are deposited to the account of the Federal Hospital Insurance Trust Fund known as the Medicare Part A Trust Fund.
Medicare Part B is financed by monthly premiums of individuals who elect to enroll in the program and by the federal government, which makes contributions from general revenues. All premiums and government contributions are deposited in a separate account known as the Federal Supplementary Medical Insurance Trust Fund, or the Medicare Part B Trust Fund.
Revised 1/2021