Medicare Primer

For some, Medicare is a model of what national health insurance could be in the United States. Despite its low administrative costs and significant contributions to the well-being of America's oldest and most disabled citizens, some critics assail the program as being out of sync with the needs of many senior citizens, while others often refer to it as "unsustainable" because of its high costs. Physicians and hospital administrators endlessly criticize and debate Medicare but rely upon it for a substantial share of their revenues. In Medicare: A Policy Primer, Marilyn Moon explains what Medicare is, how it works, and where it's headed. She examines the problems facing the program and which reform options hold the most promise. She also examines the history of Medicare and how the program works in the broader context of health care, the federal government, and the economy. It is a clear introduction to one of the most critical debates in health policy and an important volume for anyone interested in the future of Medicare.

Medicare is a federal program that pays for covered health care services of qualified beneficiaries. It was established in 1965 under Title XVIII of the Social Security Act to provide health insurance to individuals 65 and older, and has been expanded over the years to include permanently disabled individuals under 65. Medicare, which consists of four parts (A-D), covers hospitalizations, physician services, prescription drugs, skilled nursing facility care, home health visits, and hospice care, among other services. Generally, individuals are eligible for Medicare if they or their spouse worked for at least 40 quarters in Medicare-covered employment, are 65 years old, and are a citizen or permanent resident of the United States. Individuals may also qualify for coverage if they are a younger person with a permanent disability, have End-Stage Renal disease (permanent kidney failure requiring dialysis or transplant), or have amyotrophic lateral sclerosis (ALS, Lou Gehrig's disease). The program is administered by the Centers for Medicare & Medicaid Services (CMS), and by private entities that contract with CMS to provide claims processing, auditing, and quality oversight services. In FY2013, the program will cover approximately 52 million persons (43 million aged and 9 million disabled) at a total cost of about $606 billion, accounting for approximately 3.7% of GDP. Spending under the program (except for a portion of administrative costs) is considered mandatory spending and is not subject to the appropriations process. Services provided under Parts A and B (also referred to as “traditional Medicare”), are generally paid directly by the government on a “fee-for-service” basis, using different prospective payment systems or fee schedules. Under Parts C and D, private insurers are paid a monthly “capitated” amount to provide enrollees with at least a minimum standard benefit. Medicare is required to pay for all covered services provided to eligible persons, so long as specific criteria are met. Since 1965, the Medicare program has undergone considerable change. For example, during the 111th Congress, the Patient Protection and Affordable Care Act (ACA; P.L. 111-148 and P.L. 111-152) made numerous changes to the Medicare program that modify provider reimbursements, provide incentives to increase the quality and efficiency of care, and enhance certain Medicare benefits. However, in the absence of further congressional action, the Medicare program is expected to be unsustainable in the long run. The Hospital Insurance (Part A) trust fund has been estimated to become insolvent in 2024. Additionally, although the Supplementary Medical Insurance (Parts B and D) trust fund is financed in large part through federal general revenues and cannot become insolvent, associated spending growth is expected to put increasing strains on the country's competing priorities. As such, Medicare is expected to be a high-priority issue in the 113th Congress, and Congress may consider a variety of Medicare reform options ranging from further modifications of provider payment mechanisms to redesigning the entire program.

Congress continues to register concern about the rapid rise in Medicare spending and the ability of existing funding mechanisms to support the program over the long-term. A combination of factors has contributed to the rapid increase in Medicare costs. These include increases in overall medical costs, advances in health care delivery and medical technology, the ageing of the population, and longer life spans. The issues confronting the program are not new; nor are the possible solutions likely to get any easier. For a number of years, various options have been suggested; however, legislative changes have focused on short-term issues. There is no consensus on the long-term approach that should be taken. This book provides an overview of Medicare. It begins with a brief program history, and then outlines the key features of Parts A and B, also known as "Original Medicare". That is followed by overviews of Part C and Part D, a discussion of program financing, and a brief discussion of future program directions. It will be updated to reflect any legislative changes.

This report provides an overview of Medicare, the nation's federal insurance program, which pays for covered health care services of qualified beneficiaries.

A book designed to take the confusion out of Medicare choices.

Medicare is a nationwide health insurance program for individuals aged 65 and over and certain disabled individuals. The basic Medicare benefit package (termed “Original Medicare” in this report) provides broad protection against the costs of many, primarily acute, health care services. However, Medicare beneficiaries may still have significant additional costs, including copayments, coinsurance, deductibles, and the full cost of services that are not covered by Medicare. All Medigap plans cover some percentage of Medicare's cost-sharing. Some plans offer additions to these basics, including various combinations of greater coverage of Medicare cost-sharing, and care associated with foreign travel emergencies. The most popular plans are the most comprehensive, and cover all deductibles, copayments, and coinsurance not covered by Medicare. Medigap generally does not cover medical treatments not covered by Medicare, although it does extend coverage for certain covered services, such as coverage for additional hospital days beyond the Medicare benefit limit. Medigap is financed through beneficiary payments to the private insurance firms. Federal law requires that Medigap insurers observe many consumer protections. Consumer protections are especially strong during open enrollment, which is a six-month period that begins for most individuals during the month they turn 65. During this period, individuals are protected against insurers refusing to sell them any Medigap policy that the insurer offers, insurers setting premiums based on the individual's health, and insurers imposing waiting times on the start of the policy, other than a maximum of a six-month waiting period for preexisting conditions. Following the open-enrollment period, beneficiaries have other rights in limited situations, such as when they move to a different state. Guaranteed issue (or the right to buy a plan, to have the plan's premium not depend on health status, and in some cases to have the plan start coverage of preexisting conditions immediately) is one such right. The right of guaranteed renewability is available in a wide variety of situations, and genetic discrimination is forbidden. Moreover, Medigap insurers must pay out at least 65% (and sometimes 75%) of total premiums as claims to the beneficiaries. Recent data show that Medigap premiums vary by states and other factors. A relatively small number of insurance firms sell Medigap plans. In addition, Medigap beneficiaries are concentrated in certain areas of the country and are more likely to have lower incomes than those holding employer-sponsored retiree health insurance. The Patient Protection and Affordable Care Act (P.L. 111-148 as amended by P.L. 111-152, ACA) requests that the Secretary of Health and Human Services ask the National Association of Insurance Commissioners to review and revise existing standards to examine greater cost-sharing for Medigap beneficiaries. In addition, the President's 2013 budget proposal would provide incentives to increase cost-sharing. One rationale for these proposals is that beneficiaries on average reduce their use of medical care following an increase in cost-sharing. This decrease in medical care by Medicare beneficiaries could reduce Medicare expenditures and the federal deficit. On the other hand, if these reductions in medical care ultimately lower health status, the individuals might require more treatments or more expensive care. This report provides a broad overview of Medigap insurance. The report covers the history of Medigap legislation, the various types of Medigap plans, consumer protections awarded to Medigap beneficiaries, and the requirements facing the insurance providers and the NAIC. Following an empirical description of Medigap markets, the report discusses proposals related to the percentages of a Medigap insurer's revenue that is returned as benefits to the policy holders and Medigap cost-sharing requirements.

Medicare is a nationwide health insurance program for individuals aged 65 and over and certain disabled individuals. The basic Medicare benefit package provides broad protection against the costs of many, primarily acute, health care services. However, Medicare beneficiaries may still have significant additional costs, including co-payments, coinsurance, deductibles, and the full cost of services that are not covered by Medicare. This book provides an overview of Medigap insurance with a focus on the history of Medigap legislation.