Medicare and Medicaid

Medicare

- program paying for healthcare of old people and those with specific disabilities

- 4 parts

Funding Medicare

- Hospital insurance trust fund: medicare payroll tax for Part A

- Supplemental trust fund: federal tax funds for Part B and C

- Not self-sustaining

Ronald Reagan and Operation Coffee Cup

- AMA paid actor Reagan to make a speech against insurance (socialism)

- Foot in door: expand program once it is created (evil socialism)

Conditions for AMA support of Medicare

- Reimbursements of customary, reasonable, and prevailing fees

- Cost and reimbursement to hospitals

- Part A, revised Part B for voluntary doctor insurance, and state run Medicaid

Medicare Beneficiaries vs Workers

- More people going on Medicare as more people old and not dying

- Less workers paying into trust skewing the balance

Part A of Insurance

- Hospital insurance: premium free hospitalization, nursing facility, hospice for 65+

- No premium if paid taxes for 30 quarters

- Limited hospital stay days covered

- No MOOP

Part B

- Medical insurance: doctor, equipment, ambulance, outpatient hospital and mental health care

- Premium on sliding scale

- No MOOP and pay 20% coinsurance

Doctors and Part B

- Accept assignment

- Do not accept assignment/balance bill

- Opt out provider

Inflationary Mechanism

- Doctor payment calculated on what is reasonable to them - charge more to get more from govt

- 3rd party payer increases the costs since no barrier to charge

Initial response to inflation

- Pay for what things should cost instead of what doctor charges

- Get what you incentivize for

Part C

- Medicare Advantage - private medicare consisting of managed care plans for ppl on A and B

- Medicare pays fixed amt per month to companies offering MC Advantage (capitation)

- Companies must follow rules but can charge different out of pocket costs and different rules to access services (gatekeep)

Distribution of Medicare Advantage enrollees

- Appeal to people not wanting to pay premiums (get money from govt)

- More healthy people enroll and okay when sick people leave (still get money)

Part D

- Private benefits by drug companies to give government subsidized pharma benefits

- Prices are not capped or regulated - many out of pocket payments

- Maintain private marketplace

Medigap

- Program to cover gaps in insurance

- Many have supplemental insurance since Medicare covers less than half of costs