Managed Health Care: Medicare and Medicaid Overview

Medicare

Federal health insurance for individuals 65 and older.

Medicaid

State-administered program for low-income individuals.

Medicare Part A

Covers hospital insurance funded by payroll taxes.

Medicare Part B

Voluntary insurance for physician services funded by taxes.

Medicare Part C

Medicare Advantage plans combining Parts A and B.

Medicare Part D

Prescription drug benefit established in 2003.

Eligibility for Medicare

Individuals 65+, disabled, or with ESRD qualify.

Medicare Enrollment

Beneficiaries increased from 19 to 55 million.

Medicare Expenditures

Grew from $6 billion in 1968 to $597 billion in 2014.

Cost Sharing in Medicare

Includes premiums, deductibles, and coinsurance.

Approved Charges

Maximum amount Medicare pays for services.

Assignment

Agreement between providers and Medicare on payment.

Medicare Star Ratings

Measures quality of Medicare Advantage plans.

Medicaid Eligibility

Low-income individuals, families, and disabled persons.

Medicaid Benefits

Includes mandatory and optional services.

Medicaid Financing

Jointly funded by state and federal governments.

Medicare Supplement Policies

Plans to cover gaps in Medicare coverage.

Part D Formulary

List of covered drugs under Medicare Part D.

Part D Copay Tiers

Cost structure for different drug categories.

Donut Hole

Coverage gap in Part D costs for beneficiaries.

Extra Help

Financial assistance for low-income Part D beneficiaries.

Cost Sharing in Medicaid

Includes premiums, deductibles, and copayments.

Medicare Advantage Plans

Private plans offering Medicare benefits.

Primary Care Physician

Required for referrals in Medicare Advantage plans.

HMO vs. PPO

HMO is more restrictive than PPO in networks.

Medicare Part B Coverage

Includes outpatient services and certain medications.

Medicare Part D Coverage

Covers many prescription medications not in Part B.

Medicare Administration

Managed by the U.S. Department of Health and Human Services.

Social Security Administration

Handles Medicare eligibility and enrollment.

Eligibility and enrollment

Through the Social Security Administration (SSA).

Administration, policies, and general funding

Through the Centers for Medicare and Medicaid Services (CMS).

U.S. Treasury

Manages the HI and SMI trust funds.

Reimbursement for providers

Providers must comply with conditions of participation.

State government agencies

Certify compliance for Medicare providers.

Medicare Supplement (Medigap)

Private plan that covers many of the charges not covered by Medicare.

Basic Medigap policy (Plan A)

Covers co-pays for days 61-90 of inpatient hospitalization, co-pay for lifetime hospital inpatient reserve, 100% of Medicare-eligible hospital expenses after all Medicare benefits are exhausted, 3-pint blood deductible, and Medicare Part B co-insurance.

Welfare Reform

Personal Responsibility and Work Opportunities Act of 1996 removed automatic eligibility for individuals who received cash welfare through Aid to Families with Dependent Children (AFDC).

TANF

Temporary Assistance for Needy Families program that provides block grants to states for time-limited cash assistance.

Medicaid eligibility groups

Mandated categorically needy, optionally categorically needy, and medically needy.

Federal Medical Assistance Percentage (FMAP)

Determined by comparing a state's average per capita income to the national average; by law, max. 83%, min. 50%.

Required Services Covered by Medicaid

Includes inpatient hospital services, outpatient hospital services, physician services, and more.

Optional Services Covered by Medicaid

Includes outpatient prescription drugs, prosthetic devices, physical therapy, and more.

Medicaid expenditures

Medicaid beneficiaries ~20% of the U.S. population (~60 million people) at a cost of more than $400 billion annually.

Children in Medicaid

Children are 52% of beneficiaries but only 20% of expenditures.

Blind and disabled in Medicaid

The blind and disabled are 16% of beneficiaries but 45% of expenditures.

Elderly in Medicaid

The elderly are 8% of beneficiaries but 22% of expenditures.

Distribution of Medicaid payments

Nursing facilities - 11.6%, Inpatient hospital - 13.5%.

Medicare qualification

Age, ESRD, Income status, and Disability are qualifications.

Medicaid eligibility requirement

Low-income status is a requirement for Medicaid eligibility.

Medicare Part D drug coverage

Enacted by the Medicare Modernization Act.

Medicare parts

Medigap is NOT a part of Medicare.

Primary Medicaid services

Includes Acute care, Medical transportation, and Long term care.

Medicaid funding

Medicaid is not 100% funded by the state.

Medicare Supplement

Medigap is a Medicare Supplement.

Federal Agencies in Medicare Administration

FDA for formulary management is not involved in Medicare Administration.