The Importance of Medicare Insurance

Without some form of health insurance, your personal finances are at risk of disappearing as soon as you encounter a serious illness. For senior citizens and individuals with certain medical conditions, the federal government administers the Medicare program through the Social Security Administration. Medicare offers hospital care, prescription drugs and home health care at little or no cost to recipients.

Meeting Need

• One of the most important aspects of Medicare is that it applies to some of the highest-need individuals who can't afford private health insurance. Besides its availability to seniors, many of whom have fixed incomes, Medicare is available to people of all ages with qualifying disabilities that keep them from earning a living. It also applies to anyone with end-stage renal disease, including those in need of kidney transplants. This means that Medicare is able to prevent these recipients from experiencing even more severe financial hardships.

Health Risks for Seniors

• Most Medicare recipients qualify based on age. Anyone age 65 or older who paid into the system while working, or whose spouse paid, is eligible for benefits. Besides an increased need for medical care, including testing and prescription drugs, these older recipients are also in the highest risk pool of health insurance policyholders, experiencing conditions that are costly to treat compared to some of the more minor health issues that younger people typically face. Medicare is designed to prevent older citizens from taking on a disproportionate liability for their medical treatment.

Funding

• Workers pay into Medicare with deductions from each paycheck. This means that by age 65 a worker with a full career has paid into the system for several decades. Medicare allows workers to pay into the system in small amounts over an extended period of time and then receive benefits in much larger amounts as they need them. Because most who pay into the system will receive some benefit eventually, Medicare functions like a health savings account, in addition to a health insurance program. The money recipients get from Medicare represents payback for a lifetime of contributions.

Drug Coverage

• All Medicare recipients are eligible for prescription drug coverage by signing up for a Medicare Advantage Plan or other Medicare health plan with drug coverage. These plans allow Medicare recipients to purchase both generic and name-brand prescriptions at subsidized prices, making it easier for patients to get the medicine they need to recover more quickly or prevent the onset of medical conditions that would decrease their quality of life.