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Medicaid and Medicare • Who do they cover? • How do they function? • How much do they affect the extension of health care coverage to the uninsured? • How efficient are they? Meicaid and Medicare are public provisions Changing Public (Federal And State) And Private Financing of National Health Expenditures 1960 1970 1980 1990 2003 (in percent) Public 25 38 43 41 46 funds Private 75 62 57 59 54 funds Source: National Health Expenditures, loc. cit. Government statistics • Medicare is a social insurance program that serves more than 44 million enrollees (as of 2008). • Medicare costs about $432 billion, or 3.2% of GDP, in 2007. • Medicaid is a social welfare (or social protection) program that serves about 40 million people (as of 2007) • Medicaid costs about $330 billion, or 2.4% of GDP, in 2007. • Howard (2007): Medicaid is largest social program for the poor in the US welfare state • Together, Medicare and Medicaid represent 21% of the FY 2007 U.S. federal government. Medicaid, Medicare started in 1966 Sources of Financing of Personal Health Care, 1960 and 2003 1960 2003 Percent funded by: Private insurance 21 36 Out of pocket 55 16 Medicare --- 19 Medicaid* --- 17 Other private 2 4 Other Federal 9 4 Other State and local 13 3 Source: National Health Expenditures, loc. cit * Consists of both federal and state funding. Medicaid (US Department of Health and Human Services website) • Medicaid available only to some low-income individuals and families who fit into an eligibility group that is recognized by federal and state law. • Medicaid is a state administered program and each state sets its own standards for eligibility and services. • Each State is then reimbursed for a share of their Medicaid expenditures from the Federal Government. This Federal Medical Assistance Percentage (FMAP) is determined each year and depends on the State's average per capita income level. Richer states receive a smaller share than poorer states, but by law the FMAP must be between 50% and 83%. • Many groups of people are covered by Medicaid. Even within these groups, though, certain requirements must be met. These may include your age, whether you are pregnant, disabled, blind, or aged; your income and resources (like bank accounts, real property, or other items that can be sold for cash); and whether you are a U.S. citizen or a lawfully admitted immigrant. • The rules for counting your income and resources vary from state to state and from group to group. There are special rules for those who live in nursing homes and for disabled children living at home. • Patients are restricted when selecting who will take care of their needs by selecting from pre-approved physicians and other providers of medical care. • Because physicians are not fully reimbursed for services provided to Medicaid patients, many of them limit the number of Medicaid patients they see. • Reinhardt: NJ state gives compensation of $30 to pediatrician for medicaid patient, but same doctor gets $90 for treating a patient with insurance • If pricing is signal of value, understood by dr.s – many refuse to treat Medicaid patients Eligible include • Individuals who meet the requirements for the Aid to Families with Dependent Children (AFDC) program that were in effect in their state on July 16, 1996 • Children under age 6 whose family income is at or below 133% of the Federal poverty level (FPL) • Pregnant women with family income below 133% of the FPL • Supplemental Security Income (SSI) recipients • Recipients of adoption or foster care assistance under Title IV of the Social Security Act • Special protected groups such as individuals who lose cash assistance due to earnings from work or from increased Social Security benefits • Children born after September 30, 1983 who are under age 19 and in families with incomes at or below the FPL • Certain Medicare beneficiaries Other potential recipients – determined by state • Infants up to age 1 and pregnant women whose family income is not more than a state-determined percentage of the FPL • Certain low-income and low-resource children under the age of 21 • Low-income institutionalized individuals • Certain aged, blind, or disabled adults with incomes below the FPL • Certain working-and-disabled persons with family income less than 250 percent of the FPL • Some individuals infected with tuberculosis • Certain uninsured or low-income women who are screened for breast or cervical cancer • Certain "medically needy" persons, which allow States to extend Medicaid eligibility to persons who would be eligible for Medicaid under one of the mandatory or optional groups, except that their income and/or resources are above the eligibility level set by their State. • about 60% of America's poor are not covered by the program NY State • What do I need to apply for Medicaid? • Proof of age, like a birth certificate • Proof of citizenship or alien status* • Recent paycheck stubs (if you are working) • Proof of your income from sources like Social Security, Supplemental Security Income (SSI), Veteran's Benefits (VA), retirement • If you or anyone who lives with you is 65 years old or older, certified blind, or certified disabled, you need to give information on bank accounts, insurance policies and other resources • Proof of where you live, like a rent receipt, landlord statement, mortgage statement, or envelope from mail you received recently • Insurance benefit card or the policy (if you have any other health insurance) • Medicare Benefit Card (the red, white and blue card) • If I think I am eligible for Medicaid, should I cancel any other health insurance I might already have? • No. If you currently pay for health insurance or Medicare coverage or have the option of getting that coverage, but cannot afford the payment, Medicaid can pay the premiums under certain circumstances. • Even if you are not eligible for Medicaid benefits, the premiums can still be paid, in some instances, if you lose your job or have your work hours reduced. If you need help with a COBRA premium, you must apply quickly, to determine if Medicaid can help pay the premium. • You may be eligible for the Medicare Savings Program. This program pays your Medicare premiums and deductibles. • If you have Acquired Immune Deficiency Syndrome (AIDS), Medicaid may be able to help pay your health insurance premiums. *Effective January 1, 2010 NY Rules for eligibility 2010 Income & Resource Levels* Medicaid Standard for Singles People, Couples without Net Income for Families; and Children & Low Income Individuals who Families are Blind, Disabled or Age 65+ Resource Level (Individuals who are Blind, Disabled Annual Monthly Annual Monthly or Age 65+ ONLY) 1 $8,479 $707 $9,200 $767 $13,800 2 $10,584 $883 $13,400 $1,117 $20,100 3 $12,593 $1,050 $15,410 $1,285 $23,115 4 $14,622 $1,219 $17,420 $1,452 $26,130 5 $16,719 $1,394 $19,430 $1,620 $29,145 6 $18,253 $1,522 $21,440 $1,787 $32,160 7 $19,869 $1,656 $23,450 $1,955 $35,175 8 $21,943 $1,829 $25,460 $2,122 $38,190 9 $23,131 $1,928 $27,470 $2,289 $41,205 10 $24,321 $2,027 $29,480 $2,457 $44,220 For each $99 $2,010 $168 $3,015 additional person, add: What is a Medicaid managed care program? Enrollment in a Medicaid managed care program through a Health Maintenance Organization (HMO), clinic, hospital, or physician group is available at any local department of social services. You may be required to join a managed care plan. When you join a managed care program, you will choose a personal doctor who will be responsible for making sure all your health care needs are met. The doctor will send you to someone else if you need more help than the doctor can provide. What does managed care cover? Managed care covers most of the benefits recipients will use, including all preventive and primary care, inpatient care, and eye care. People in managed care plans use their Medicaid benefit card to get those services that the plan does not cover. Do I have to join a managed care plan? In many counties you can join a plan if there is one available and you want to. However, there are some counties where families will have to join a plan. In these counties there are some individuals who don't have to join. Please check with your local social services department to see if you have to join a plan. US Department of Health and Human Services • Medicaid does not pay money to you; instead, it sends payments directly to your health care providers. Depending on your state's rules, you may also be asked to pay a small part of the cost (co-payment) for some medical services. • The basic benefit package provides all mandatory Medicaid services with the addition of age appropriate services that focus on wellness. • The basic package for children includes: inpatient hospital services (with limitations on certain services); outpatient services (with limitations on certain services); physician services; home health (limited); durable medical equipment (limited); family planning; transportation; hospice; ambulance; prescriptions (limited); vision (limited); dental (limited); Early and periodic screening, diagnostic, and treatment (EPSDT) services for children under age 21 • hearing (limited) and tobacco cessation. • The enhanced package for children includes all of the above services without the limitations. In addition, it provides services such as weight management, podiatry, skilled nursing care and nutritional education. • The basic package for adults includes inpatient hospital services; outpatient services (with limitations on certain services); emergency dental; physician; home health (limited); durable medical equipment (limited); nursing home; family planning; transportation; hospice; emergency ambulance and prescriptions (limited). • The enhanced packed for adults include all of the above services without the limitations. It also provides services such as inpatient psychiatric services; weight management; cardiac rehabilitation; podiatry; chiropractic; tobacco cessation; diabetes care; nutritional education and chemical dependency and mental health (limited). MEDICAID MANAGED CARE ENROLLMENT AS OF JUNE 30, 2009 ROW STATE MEDICAID MANAGED CARE PERCENT IN NUMBER ENROLLMENT ENROLLMENT MANAGED CARE 1 ALABAMA 812,220 540,093 66.50% 2 ALASKA 101,702 0 0.00% 3 ARIZONA 1,223,271 1,096,365 89.63% 4 ARKANSAS 645,389 511,014 79.18% 5 CALIFORNIA 6,955,761 3,632,547 52.22% 6 COLORADO 467,556 444,819 95.14% 7 CONNECTICUT 455,878 342,784 75.19% 8 DELAWARE 170,562 126,089 73.93% 9 DISTRICT OF COLUMBIA 153,779 150,406 97.81% 10 FLORIDA 2,426,010 1,600,550 65.97% 11 GEORGIA 1,385,721 1,274,823 92.00% 12 HAWAII 235,203 228,174 97.01% 13 IDAHO 198,000 166,524 84.10% 14 ILLINOIS 2,320,700 1,278,200 55.08% 15 INDIANA 961,986 711,636 73.98% 16 IOWA 397,823 329,897 82.93% 17 KANSAS 297,290 257,464 86.60% 18 KENTUCKY 768,777 638,083 83.00% 19 LOUISIANA 1,006,842 692,048 68.73% 20 MAINE 280,148 178,353 63.66% 21 MARYLAND 787,366 620,024 78.75% 22 MASSACHUSETTS 1,227,109 731,123 59.58% 23 MICHIGAN 1,629,959 1,447,373 88.80% 24 MINNESOTA 675,149 426,009 63.10% 25 MISSISSIPPI 673,630 512,796 76.12% 26 MISSOURI 895,077 883,423 98.70% 27 MONTANA 84,785 56,434 66.56% 28 NEBRASKA 214,699 179,512 83.61% 29 NEVADA 213,440 178,711 83.73% 30 NEW HAMPSHIRE 124,498 96,553 77.55% 31 NEW JERSEY 968,598 725,614 74.91% 32 NEW MEXICO 464,852 344,977 74.21% 33 NEW YORK 4,422,121 2,926,950 66.19% 34 NORTH CAROLINA 1,442,396 1,012,474 70.19% 35 NORTH DAKOTA 60,111 40,605 67.55% 36 OHIO 1,951,511 1,374,520 70.43% 37 OKLAHOMA 625,546 553,385 88.46% 38 OREGON 474,835 418,096 88.05% 39 PENNSYLVANIA 1,920,134 1,576,523 82.10% 40 PUERTO RICO 1,013,486 977,648 96.46% 41 RHODE ISLAND 177,981 110,584 62.13% 42 SOUTH CAROLINA 763,225 763,225 100.00% 43 SOUTH DAKOTA 107,196 85,476 79.74% 44 TENNESSEE 1,230,750 1,230,750 100.00% 45 TEXAS 3,343,241 2,161,210 64.64% 46 UTAH 238,358 204,793 85.92% 47 VERMONT 156,503 137,385 87.78% 48 VIRGIN ISLANDS 7,728 0 0.00% 49 VIRGINIA 814,820 520,773 63.91% 50 WASHINGTON 1,103,291 949,263 86.04% 51 WEST VIRGINIA 325,653 149,694 45.97% 52 WISCONSIN 1,004,704 606,509 60.37% 53 WYOMING 64,489 0 0.00% TOTALS 50,471,859 36,202,281 71.73% Coverage • Coverage designed to cover those eligible for AFDC payments • And pregnant women and children who were not eligible but needy • Can still be very poor and not eligible for medicaid • Or – see readings – non eligible by fliing out forms incorrectly • Yet many who are eligible are not covered • Reasons: • Own insurance • Lack of awareness • Stigma involved Howard • Despite flaws, Medicaid is most successful social program aimed at aiding the poor • Why? • Risky – no strong political capital gained from helping the poor • But worked because of ’deserving’ targets • Children, pregnant women • Because partly financed and driven by federal government • Avoids redistribution problems • And other problems from federalism Political reasons (Howard) • Medicaid was antiabortion measure • Increasing resources to pregnant women could reduce need/desire for abortion • Medicaid reduced pressure for universal health care Medicare • Medicare is a Federal health insurance program that pays for hospital and medical care for elderly and certain disabled Americans. • Medicare Part A, Hospital Insurance (HI), helps pay for hospital stays. • Includes: meals, supplies, testing, and a semi-private room. Also pays for home health care such as physical, occupational, and speech therapy provided on a part-time basis and deemed medically necessary. • Care in a skilled nursing facility and certain medical equipment for the aged and disabled (walkers and wheelchairs) also covered by Part A. • Part A is generally available without having to pay a monthly premium since payroll taxes are used to cover these costs. Medicare Part B • also called Supplementary Medical Insurance (SMI). Helps pay for medically necessary physician visits, outpatient hospital visits, home health care costs, and other services for the aged and disabled. • For example, Part B covers: • Durable medical equipment (canes, walkers, scooters, wheelchairs, etc.) • Physician and nursing services • X-rays, laboratory and diagnostic tests • Certain vaccinations • Blood transfusions • Renal dialysis • Outpatient hospital procedures • Some ambulance transportation • Immunosuppressive drugs after organ transplants • Chemotherapy • Certain hormonal treatments • Prosthetic devices and eyeglasses. • Part B requires a monthly premium ($96.40 per month in 2009), and patients must meet an annual deductible ($135.00 in 2009) before coverage actually begins. • Enrollment in Part B is voluntary. Additional services • Medicare Advantage Plans (sometimes known as Medicare Part C, or Medicare + Choice) allow users to design a custom plan that can be more closely aligned with their medical needs. • These plans enlist private insurance companies to provide some of the coverage. • Details vary based on the program and eligibility of the patient. • Some Advantage Plans work with health maintenance organizations (HMOs) or preferred provider organizations (PPOs) to provide preventive health care or specialist services. • Others focus on patients with special needs such as diabetes. • In 2006, Medicare expanded to include a prescription drug plan known as Medicare Part D. • Part D is administered by one of several private insurance companies, each offering a plan with different costs and lists of drugs that are covered. • Participation in Part D requires payment of a premium and a deductible. Pricing designed so that 75% of prescription drug costs are covered by Medicare if you spend between $250 and $2,250 in a year. • The next $2,850 spent on drugs is not covered, but then Medicare covers 95% of what is spent past $3,600. Who is eligible for Medicare? • To be eligible for Medicare, an individual must either be at least 65 years old, • Or under 65 and disabled, • or any age with End-Stage Renal Disease (permanent kidney failure that requires dialysis or a transplant.) • In addition, eligibility for Medicare requires that an individual is a U.S. citizen or permanent legal resident for 5 continuous years • and is eligible for Social Security benefits with at least ten years of payments contributed into the system. Who pays for Medicare? • Payroll taxes collected through FICA (Federal Insurance Contributions Act) and the Self-Employment Contributions Act are a primary component of Medicare funding. • The tax is 2.9% of wages, usually half paid by the employee and half paid by the employer. • Moneys set aside in a trust fund that the government uses to reimburse doctors, hospitals, and private insurance companies. • Additional funding for Medicare services comes from premiums, deductibles, coinsurance, and copays. Per-Capita Health Care Spending by the Aged Compared to that of the Rest of the Population, 1999 Per Capita Personal Health Care Age grouping Spending All ages $3,834 Under 65 2,793 65 and older 11,089 19-44 2,706 45-54 3,713 55-64 5,590 65-74 8,167 75-84 12,244 85 and older 20,001 Source: Age Estimates in the National Health Accounts, Sean P. Keehan, Helen C. Lazenby, Mark A. Zezza, and Aaron C. Catlin, Health Care Financing Review, December 2, 2004 The Importance of Governmental Sources in Financing Medical Care for the Aged Sources Of Personal Health Care Financing For Medicare And Non–Medicare Populations, 2000 Medicare Non-Medicare Population Population Percent funded by: Medicare 52.3 --- Medicaid 12.2 19.2 Private 12.2 47.7 insurance Out-of- 19.4 15.8 pocket Other* 3.9 17.3 Source: Medicare Current Beneficiary Survey, loc. cit. * Consists of a mix of governmental and private sources Awareness of public funding Efficiencies • Medicaid cost about $340 billion in 2008 • 57 % paid by the federal government and 43 % by state governments. • With rise in Medicaid costs, have consumed a greater portion of government budgets, on average nearly 22% of state expenditures. • next 10 years, expenditures are expected to increase by about 8% annually. • When states cut costs, they use traditional cost-cutting measures: reductions in eligibility, benefits, and provider payments. • These strategies may decrease access to and quality of care, and cause an increase in the use of more costly treatments. Currie and Gruber • Currie and Gruber found increase in doctor visits • Can reduce costly use of hospital visits • Also found that as Medicaid coverage increased, child mortality decreased • Cost per child roughly $902 • Estimated saving of $1.61m per life saved • But still numbers not covered Medicare • Lower administrative costs • Higher spending on elderly • Debates regarding tradeoff of saving elderly and expenses - QALY • NBER results that Medicare provides too little in terms if inexpensive and effective care Financial challenges Comparison of Per Person Growth of Medicare, Medicaid, and Gross Domestic Product, 1970-2003 Average annual per person growth in percent GDP Medicare Medicaid 1970-2003 6.3 9.4 8.8* 1980-2003 5.0 7.4 7.1 1990-2003 3.8 5.6 6.0 The Long Term Budget Outlook, CBO, loc. cit. *For the 1975-2003 period.
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