Chapter 2
Overview of Part A and Part B

2.1 Overview

Medicare is a federal health insurance program which provides coverage for people 65 and older, for certain disabled people, and for some people with End Stage Renal Disease (ESRD). The Program was enacted into law in 1965 by Congress through Title XVIII of the Federal Social Security Act. The Program is managed by the Health Care Financing Administration (HCFA), which is a branch of the Department of Health and Human Services (DHHS), of the U. S. Federal Government.

The Medicare Program is divided into two parts:

Hospital Insurance - Part A:  Part A of the Medicare Program is hospital insurance. This coverage helps pay for inpatient hospital care, some inpatient care in a skilled nursing facility, some home healthcare, and hospice care. Hospitals submit Medicare claims to their Part A intermediary.

Medical Insurance - Part B:  Part B of the Medicare Program is medical insurance; it is administrated by the Health Care Financing Administration. This coverage helps pay for medical and surgical services by physicians, as well as certain other health benefits such as ambulance transportation, durable medical equipment, outpatient hospital services, and independent laboratory services. It is designed to complement the coverage provided by Part A of the Program.