Medicare and Medicaid

U.S. Medicare and Medicaid Overview

Objectives

  • Historical Context

    • Identify the historical context behind the structure of Medicare and Medicaid today.

  • Components of Medicare

    • Describe each component (parts) of Medicare:

    • Funding sources

    • General array of services covered

    • Patient cost-sharing responsibilities

  • Cost-sharing Structure

    • Discuss the structure of cost-sharing in Medicare Part A:

    • Define benefit period

    • Describe how it shapes cost-sharing

    • Calculate out-of-pocket (OOP) costs for Part A patients

  • Medigap, Medicare Advantage, and Part D

    • Describe Medigap, Medicare Advantage, and Medicare Part D as financial risk assurances and means for drug access

  • Primary Care Physicians

    • Explain the concept of primary care physicians “accepting assignment” and the implications for physicians and patients

  • Future Solvency of Medicare

    • Discuss the future solvency of Medicare and potential changes needed for the program.

  • Medicaid Programs

    • Explore the structure of state Medicaid programs, administration rules by CMS, and states' waiver acquisition processes.

    • Discuss Medicaid eligibility, services covered, patient cost-sharing, and recent initiatives for expansion and care quality improvement.

History of Medicare and Medicaid

  • Cost and Access Issues

    • Overview of historical cost and access dilemmas in healthcare leading to the creation of Medicare and Medicaid.

  • Healthcare Technology and Private Insurance

    • The rise in healthcare technology and how private health insurance influenced the landscape.

  • Inequities and Hospital Care Growth

    • Emergence of disparities and the increased dominance of hospital care.

  • Legislative Background

    • Creation of Social Security under FDR, considered as "unfinished business".

    • Titles 8 and 9 of the Social Security Amendments in 1965 established Medicare and Medicaid.

Medicare Administration

  • Administrative Bodies

    • Social Security Administration (SSA) determines eligibility.

    • Centers for Medicare and Medicaid Services (CMS), formerly known as Health Care Financing Administration (HCFA), develops policies, procedures, and oversees provider participation conditions.

    • Responsibilities include:

    • Survey and certification of long-term care facilities (LTCFs)

    • Management of the State Children’s Health Insurance Program (SCHIP)

    • Oversight of healthcare databases and statistics.

  • Financial Administration

    • Administration of Part A by fiscal intermediaries and Part B by carriers.

Component "Parts" of Medicare

  • Part A: Hospital Insurance

  • Part B: Supplementary Medical Insurance

  • Part C: Medicare Advantage (established in 1997)

  • Part D: Medicare Prescription Drug Benefit (established in 2010)

Financing of Medicare

  • Part A Funding Sources

    • Funded through Hospital Insurance (HI) fund from payroll taxes (1.45% from employees and employers; 2.9% for self-employed).

    • Beneficiary cost-sharing specifics vary.

  • Part B Funding Sources

    • Funded through Supplementary Medical Insurance (SMI) funded by general revenues and beneficiary cost-sharing.

Medicare Eligibility

  • Eligibility for Part A:

    • Must be at least 65 years old

    • Spouse had a minimum of 10 years in Medicare-covered employment

    • Must be a citizen or permanent resident

    • Must have received Social Security disability benefits for at least 24 months

    • Patients undergoing renal dialysis or with End-Stage Renal Disease (ESRD) are also eligible.

  • Voluntary Enrollment in Part B:

    • Premium deductions are taken from Social Security checks.

Medicare Services Covered

  • Part A Services:

    • Inpatient hospital care

    • Psychiatric care

    • Skilled nursing facility (SNF) care

    • Home health care (if medically necessary)

    • Emergency services and durable medical equipment (DME)

    • Hospice care.

  • Part B Services:

    • Physician services

    • Outpatient services

    • Home health

    • Some preventive services.

Patient Cost-Sharing

Part A

  • No Premium Charge

    • Organization around the benefit period concept.

  • Benefit Period:

    • Duration begins from the day of hospital admission and ends after 60 consecutive days without hospitalization or skilled nursing facility care.

    • There can be multiple benefit periods in a single year without a lifetime limit.

    • 60 lifetime reserve days provided.

Cost-sharing Details for Part A

  • Hospital Inpatient Stay:

    • $1,680 deductible per benefit period.

    • Days 1–60: $0 coinsurance per benefit period.

    • Days 61–90: $420 coinsurance per day.

    • Days 91 and beyond: $840 coinsurance per each lifetime reserve day (up to 60 days).

    • Beyond lifetime reserve days: all costs.

  • SNF Care:

    • Days 1–20: $0 coinsurance per benefit period.

    • Days 21–100: $210 coinsurance per day.

    • Days 101 and beyond: all costs.

  • Hospice Care:

    • $0 in deductibles, copayment up to $5 for prescriptions for pain relief and symptom control.

    • 5% payment for inpatient respite care.

  • Home Health Care:

    • $0 in deductibles, 20% coinsurance on approved DME.

Part B Cost-Sharing

  • Premium:

    • Minimum of $185/month, subject to income-based increases (up to $635/month).

    • Late enrollment penalty may apply.

  • Deductible:

    • $257/year deductible applicable.

  • Patient Out-of-Pocket Costs:

    • $0 coinsurance for approved lab services.

    • $20 coinsurance for approved DME services.

    • 20% coinsurance for physician services that accept assignment.

    • 20% coinsurance for various outpatient and mental health services.

Accepting Assignment

  • Definition:

    • Physicians agree to accept payment in full from Medicare for covered services.

    • Limits extra charges to beneficiaries, essentially protecting them from balance billing beyond Medicare-approved charges.

    • Physicians listed as accepting Medicare assignment can typically provide services in both participating and non-participating settings but may charge different rates.

  • Balance Billing Limits:

    • Physicians may not charge more than 115% of Medicare’s approved charges.

Summary of Medicare

  • Creation and Structure:

    • Medicare and Medicaid were established during FDR's New Deal as amendments to the Social Security Act under CMS.

    • Medicare consists of Part A (Hospital Insurance), Part B (Supplemental Medical Insurance), and other components.

  • Cost Sharing:

    • Part A organization includes consideration for cost-sharing OOP costs.

  • Part B:

    • Choice of physicians accepting assignment is crucial to minimize costs for beneficiaries.

Questions to Ponder on Medicare

  • Financial Hazards:

    • What steps can a patient take to mitigate OOP costs associated with Part A?

  • Equality Discussion:

    • Would you endorse extending Medicare coverage universally to all U.S. citizens?

  • Evaluating Coverage Structure:

    • What are the implications of organizing Part A coverage around the benefit period?

  • Personal Experience:

    • Engage with those on Medicare to understand their experiences and insights into their coverage.

  • Physician Perspectives:

    • If you were a physician, would you choose to accept Medicare assignment and why?

Medicare Part C (Medicare Advantage)

  • Plan Options:

    • Includes various plans such as MAPD, HMO, PPO, PFFS, SNPs (CSNP, DSNP), HMOPOS, MSA.

  • Coverage Details:

    • Medicare Advantage plans provide comprehensive Medicare Part A & B coverage and often include additional services such as vision and dental.

    • Comparing plans is essential since costs and services vary, including OOP costs and referral requirements.

Medigap Policies

  • Purpose:

    • Medigap policies help cover high OOP costs for Medicare beneficiaries.

  • Standardized Plans:

    • Plans are labeled A through N, covering various services such as coinsurances, blood deductibles, and expenses post-Medicare exhaustion.

  • Key Regulations:

    • Must have Medicare Part A and Part B to purchase.

    • Cannot include prescription drug coverage after 2006 due to policy changes; beneficiaries must get Part D for drug coverage.

Medicare Part D

  • Prescription Drug Coverage:

    • Needs recognition and integration into Medicare due to the growing demand and costs associated with prescription drugs for the aging population.

  • Structure:

    • Initial benefit, the coverage gap "donut hole," followed by catastrophic coverage for excessive costs.

  • Cost Dynamics:

    • 2015 Standard Benefit details illustrate up to a $320 deductible, 25% coinsurance during the initial coverage period, and variable payments in catastrophic coverage phase.

Low-Income Subsidy Levels for Part D

  • Descriptive Benefits:

    • Various levels detailing deductibles, copays based on income, and minimal costs for drugs under catastrophic conditions.

Medicare Part D Exclusions

  • Non-Covered Drugs:

    • Certain drug categories are not covered, including those for cosmetic use, fertility, weight management, and symptomatic treatments.

Cost Utilization Measures for Part D

  • Pharmaceutical Management:

    • Policies like formularies, prior authorization, step therapy, and quantity limits leverage cost control.

Interactions of Part D with Other Programs

  • Networking and Influence:

    • Part D might interact variably with employer health coverage, COBRA, Medigap, Medicaid, and more, influencing overall costs and access.

Medicare and Sustainability Challenges

  • Solvency Concerns:

    • Issues surrounding potential bankruptcy and suggestions for increased taxes, cost-sharing adjustments, funding shifts, or eligibility reforms to ensure program continuation.

Medicaid Overview

  • Program Definition:

    • Medicaid is a government insurance program for individuals of all ages lacking sufficient income and resources for health care.

  • Administration:

    • States administer Medicaid under federal guidelines with a mix of state and federal funding, with ACA expansions enabling greater funding.

Medicaid Financing and Administration

  • FMAP Overview:

    • States establish their eligibility criteria and service scope governed by CMS with FMAP, detailing federal funding percentages based on state income.

Medicaid Eligibility Rules

  • Categorical Needy:

    • Defined groups include those receiving TANF, SSI, and others, with specific income thresholds.

Services Covered by Medicaid

  • Core Services:

    • Inpatient, outpatient, physician services, family planning, and skilled nursing.

  • Optional Services:

    • Services like outpatient prescription medications and various rehabilitative and dental services.

Medicaid Patient Cost-Sharing

  • Financial Structure:

    • Minimal to no patient cost-sharing allowed, ensuring access without significant financial barriers for essential services.

State Medicaid Administration Principles

  • Operational Principles:

    • Features like statewideness, freedom of choice, and comparability of services necessary for program integrity.

Medicaid Quality Initiatives

  • Health Improvement Focus:

    • Initiatives addressing e-health, vaccinations, maternal health, dental care, and other healthcare transitions.

Medicaid Expansion Opportunities

  • ACA Influence:

    • Changes in eligibility under the ACA aim to increase coverage access and preventive care focus, with states holding discretion over participation.

Waiver Programs and Flexibility**

  • Usage of Waivers:

    • Section 1115 allows states to explore experimental projects, enhancing service delivery methods or expanding eligibility.

1915 Waivers and HCBS Waivers

  • Long-Term Care Options:

    • 1915b and c enable managed care delivery and long-term care in home/community settings under Medicaid.

Summary of Medicaid

  • Program Overview:

    • Each state administers Medicaid differently with variability in federal matching based on state income.

  • Cost Impact:

    • Medicaid services are typically cost-effective for those medically indigent, with minimal to no cost-sharing for beneficiaries.

Questions to Ponder on Medicaid

  • Cost-sharing Opinions:

    • Consider whether modest cost-sharing for beneficiaries is appropriate and why.

  • Funding Proportions:

    • Reflect on the implications of varying federal funding proportions across states.

  • Overall Impact on Medical Costs for the Poor:

    • Evaluate if Medicaid sufficiently addresses the medical expenses of low-income populations.

  • Waiver Perceptions:

    • Thoughts on the adequacy and implications of Medicaid waivers for program flexibility.

Group Discussion Promotion

  • Research Collaboration:

    • Identify and analyze peer-reviewed articles on medication use in Medicaid populations, focusing on study objectives and findings for a class presentation.