Types of Insurance: Public Insurance

public insurance

• Government financed and designed to cover populations that cannot afford insurance or are vulnerable  

• About 37% of the entire US population 

• Funded primarily through taxes (payroll)

• Payroll taxes for medicate 

• Widespread nature so cover long segment of population

• Essential they are to a country’s overall healthcare financing and safety net 

categorical programs

benefits to defined categories of people who meet the eligibility criteria to become beneficiaries

public vs private

• Different from private which anyone can buy

• Must fit a category whether it is by age, income, or disability status to qualify

  • If u fall outside of this then you can't purchase coverage from them which is the major reason why there are still people who are uninsured

medicare

• Federal program: Administered by CMS, an agency under the US Department of Health and Human Services (DHHS)

• 65 or older

• Entitlement program: Disabled individuals of any entitled to social security benefits

• Ppl with permanent kidney failure

• Doesn't cover: Vision, eyeglasses, dental care, hearing aids & many long-term care services

Medicare supplemental insurance (medigap)

nsurance that helps to cover all or some medicare deductible and may pay for services not covered by medicare

agencies responsible for medicare

• social security administration (SSA) - enrolls people in medicare

• railroad retirement board (RRB) - Enrolls railroad retirees in Medicare

• Centers for Medicare & Medicaid Services (CMS) administers the Medicare Program

medicare supplemental insurance (medigap) 

• Supplemental insurance that helps to cover all or some of Medicare deductibles and copayment, and may pay for services not covered by Medicare

hospital insurance (Part A)

• structure is complex

• Financed by payroll taxes

  • Paid by all working individuals

  • Paid on all income earned

  • Paid equally by both employer and employee

• Covers

  • Inpatient services

  • Short-term convalescence and rehabilitation in

  • skilled-nursing facility (SNF)

  • Home Health

  • Hospice

benefit period

the timing of benefits

• Different benefit period for:

  • Hospital

  • Skilled Nursing Facilities (SNF)

  • Home health agencies

  • Hospice

Supplementary medical insurance (Part B)

• Almost all part A beneficiaries choose to also enroll in part B

• Covers: 

  • Physician services

  • Hospital outpatient services (surgery)

  • Diagnostic tests

  • Radiology 

  • Annual wellness exam

  • Certain screening and preventive services

participants must pay (Part B)

• Monthly premium (income based)

• Annual deductible

• 80:20 coinsurance

medicare advantage (Part C)

• Offered by private companies approved by Medicare

• Beneficiaries choose to stay in original program or sign up for part C

• Basic dental and vision may be offered by private managed care plans

• Beneficiary receives all Part A, B, and D services through the MCO

prescription drug coverage (Part D) 

• Available to those with part A or B

• Annual deductible applies

• Coverage gap “donut hole”

• Monthly premium must be paid

2025 changes to Part D

• Medicare has closed the donut hole by December 31, 2024, and replaced it with a cost cap

• New three stages of drug coverage: 

  • Deductible state: pay out-of-pocket cost until reach deductible

  • Initial coverage stage: after deductible is met, pay 25% cost (co-insurance) until 2,000

• Catastrophic coverage stage: after 2,000 out-of-pocket pay 0 for covered drugs for rest of year 
  

medicaid 

• Title 19 of social security act 

• Health care for the indigent but not all poor

• Jointly financed by state and federal governments 

state’s medicaid

• Each state has its own eligibility criteria based on income & assets

  • means-tested program

• Each state has its own medicaid program that must have federally mandated services

medicaid coverage 

• Meet the financial eligibility 

• People who are disabled receiving SSI

• Medically needy (some states)

Children’s health insurance program (CHIP)

• Title 21 of Social Security Act

• Available to families with incomes up to 200% of federal poverty level

• States can use medicaid, separate CHIP or both

• Federal and state funds finance the program

ACA and public insurance

• Enrollment in Medicare Advantage has increased

• States choose whether to expand Medicaid

• States can establish a Basic Health Program to obtain health insurance through the states