Social Security and Medicare Part A

Medicare has two parts, hospital insurance and medical insurance. Hospital insurance, sometimes referred to as Part A.

Medicare is a health insurance plan run by the Health Care Financing Administration (HCFA) for people who are age 65 or older. Individuals who are disabled and have received Social Security benefits for 24 months or have permanent kidney failure can get Medicare at any age. Medicare has two parts: Part A, which is hospital insurance, and Part B, which is medical insurance.

Medicare has been around since 1965 and has seen better days. According to the Hospital Insurance Trustee Report of 2000, income for the program will exceed expenditures for another 17 years and then will begin to fail short (remember those baby boomers?) and will need to draw upon the trust fund, which they estimate will be depleted in 2025. At that point, they estimate that Medicare will have enough funds to pay 77 percent of its obligations. So Medicare is in trouble, and if it wasn't for the booming economy of the last few years, it might be bust by now.

Expect some changes to Medicare down the road. They have already been introducing HMOs, which have not worked out well for many of our seniors because some of them have gone bankrupt or have stopped servicing the seniors. Eventually, the eligibility age of 65 to receive Medicare benefits will be raised to 67. There may also be increased taxes and fewer services offered by Medicare in the future. The closer you are to retirement, the more attention you should pay to what Congress is doing than twill affect your future Medicare benefits.

If you're already getting Social Security  benefits when you turn 65, your Medicare (Part A) starts automatically. If you're not getting Social Security, you should sign up for Medicare close to your sixty-fifth birthday even if you aren't ready to retire.