Lecture 11 and 12: Medicare and Medicaid Flashcards
Medicare
targeted for people over 65 yrs old
Medicare Part A: Hospital Insurance
Pays for care provided to patients in hospitals, hospices, and home healthcare
programs
- Very limited skilled nursing facility care for rehabilitation only (100 days only)
Medicare Part B: Supplementary Medical Insurance
Provides coverage for physicians’ services, outpatient hospital care, and many other medical services not covered under Part A
Typically “ambulatory care” services
Medicare Part C: Medicare Advantage
Added in 1997
- Expanded ability to participate in a wide variety of private health plans, including health maintenance organizations (HMOs) and preferred provider organizations
(PPOs)
Medicare Part D: Prescription Drug Benefit
Medicare Prescription Drug, Improvement, and Modernization Act of 2003
established a new prescription drug benefit
Part A eligibility
Hospital Insurance (HI)
65 years old;
No premium if:
A U.S. citizen or permanent resident and person or spouse worked >10 years in
Medicare-covered employment
Receiving or eligible to receive benefits from Social Security or Railroad Retirement Board
Had Medicare-covered government employment
Most beneficiaries don’t pay premiums for this par
Received disability benefits from Social Security (SS) or
Railroad Retirement Board for at least 24 months;
No waiting period for amyotrophic lateral sclerosis [ALS (“Lou Gehrig’s Disease”)]
End-stage renal disease (ESRD) requiring dialysis or transplant
Part B Eligibility
Supplemental Medical Insurance (SMI)
- Outpatient Care: MD’s, clinics, etc.
Eligible for Part A and pay a premium.
Not required; but ~93% have Parts A and B
SS recipients have premium deducted from checks
Part C Eligibility
Medicare Advantage Plan
Eligible for Part A, and
Choose from approved MCO
May need to pay additional premium
Part D Eligibility
Prescription drug benefit
Eligible for Part A, and
Pay a premium.
“Not required” – but there’s a penalty if you don’t join
Medicare: Administration
Eligibility and enrollment is through SSA.
Administration through the Centers for Medicare and Medicaid Services (CMS).
U.S. Treasury manages the HI and SMI trust funds
Administrators determine reasonable charges for covered services to reimburse providers
Medicare: Services and Cost Sharing Part A
Covers all emergency care, but not hospitalizations while in other countries;
CMS recommends separate health insurance.
Blood deductible
Patient must replace first 3 pints of blood used each yea
Part A services
Covers 90 days of medically-necessary inpatient care per benefit period.
Each patient has lifetime reserve of 60 days used if hospitalization exceeds 90 days in
one benefit period.
Emergency services.
Lifetime limit of 190 days of inpatient psychiatric hospitalization not provided in a general
hospital.
SNF ( Skilled Nursing Facility) LIMITED: 100 days of SNF care per benefit period
Must be preceded by at least a three-day hospitalization and within 30 days of
discharge
Requires that daily skilled care or rehabilitation can only be provided in a SNF
Part B covered services
Physician services provided in most settings
(e.g., office, hospital, nursing facilities, at home)
• Outpatient hospital services
(e.g., X-rays, labs, PT, OT, dialysis, ambulance transport, etc.)
• Preventive services
(e.g., vaccines, cancer and osteoporosis screenings, diabetes monitoring)
• Limited care by chiropractors, optometrists, podiatrists, dental surgeons
Part B non-covered services
- Routine physical and vision exams
• Hearing tests and hearing aids
• Routine dental care
Part B: Cost sharing
Monthly premium
Nominal annual deductible
Co-insurance of 20%
All of non-covered services or charges
Balance billing
If physician does not accept assignment, patient can be billed for the difference
However, by law, they can only be charged a maximum of 115% (less in some states) of the approved charge, which is 5% less than Medicare-participating physicians
Part C: Medicare Advantage
- Increased options for Medicare beneficiaries
similar to those of non-Medicare private plans - Plan must provide minimum of a traditional Medicare benefit, excluding hospice care,
without imposing any other out-of-pocket costs
Part D (started Jan. 1, 2006)
Coverage by two methods:
Enrolling in free-standing prescription drug plan (PDP) while in traditional Medicare;
or
Joining a Medicare Advantage plan (Part C) that includes a PDP
Medicare Part D Rx Coverage
- Annual Deductible
– Annual deductible (increasing: $445 in 2021)
2. Initial Coverage Phase
– Co-insurance of 25% on next $3,585
(max. $1,366.25 out-of-pocket (OOP) on first $4,130).
3. Coverage Gap Phase
– Donut hole: – closed! Used to be NO COVERAGE; but this has changed…
– Co-insurance 25% on brands and generics
4. Catastrophic Coverage
– After ~$10,048 of total costs ($6,550 of OOP, beneficiaries pay HIGHER OF:
5% co-insurance; $3.70 (generic) / $9.20 (brand) copayment
Medicare Part D: Services and Cost Sharing
Subsidies available for low- and limited-income beneficiaries:
• Premium and deductible waivers
• Copayments are nominal, with generics < brands
Covers most FDA-approved prescription drugs;
(not including those covered by Medicare Parts A or B).
Reimbursements to plans are
tied to star ratings ! $$$$
Medicare: Expenditures
Payments for MDs & and hospital services account for about 35% of Medicare
Payments for outpatient Rx drugs = 11% of expenditures
Within Medicare, a relatively small group of patients with serious medical
problems accounts for a disproportionate amount of
expenditures/beneficiary
Medicare Supplement (Medigap) Insurance
Medicare pays for less than half of the average beneficiary’s health care bills
75% of beneficiaries have coverage in addition to traditional Medicare such as:
- Other retiree benefit from own or spouse’s employer
- Medicaid
- “Medigap” – private plan that covers many of the charges not covered by Medicare
Also referred to as “Medicare Supplemental Policy”
