Medicare was enacted in 1965 as a national social insurance program to help people age 65 and older obtain and pay for medical care. Before then, only about half of older Americans had health insurance, employers rarely provided health coverage for retirees, people seeking private insurance were often denied it on the basis of age or preexisting conditions, or coverage was unaffordable.
In 2017, Medicare served 58 million beneficiaries and covered nearly all Americans age 65 and older. Medicare also covers individuals younger than age 65 who have been receiving federal disability benefits under the Social Security Disability Insurance (SSDI) program for at least two years and those with end-stage renal disease.
Medicare beneficiaries obtain covered medical services from physicians, hospitals, skilled-nursing facilities, home health agencies, and other types of providers who meet Medicare’s requirements and agree to participate in Medicare. Medicare employs a number of different ways to pay health care providers. It has been a leader in testing and adopting payment methods to promote high-quality, cost-effective care.
Medicare beneficiaries may choose to obtain Medicare-covered services in one of two ways: through traditional fee-for-service Medicare (also called Original Medicare) or by enrolling in one of the Medicare Advantage or MA (also known as Medicare Part C) private health care plans available in their location.