1MedicarePresented by:Flavio CaneladaHua ZanFCS 5400/6400Family & Econ PolicyOverview•Tuesday:oHistory and components of MedicareoFinancial mechanism and challenges with Medicare•Thursday:oBasics of Medicare Prescription Drug, Improvement, and Modernization Act of 2003 (MMA/Part D)oImpact on peopleoIssues with drug reimportation and etc.History of Medicare 1935 - the first health insurance bill was introduced in Congress President Lyndon B. Johnson on July 30,1965, to sign the Medicare to provide health and economic security to seniors Expanded in 1972 to cover younger beneficiaries with permanent Videos: http://www.kff.org/medicaid/40yearsvideo.cfmFacts about Medicare Largest Social Insurance program in US Largest public payer of health care, with 20% of all health care spending In July 1966 19 million enrolled Eligibility Generally, you are eligible for Medicare if you or your spouse worked for at least 10 years in Medicare-covered employment, you are 65 years old, and you are a citizen or permanent resident of the United States. You might also qualify for coverage if you are a younger person with a disability or with End-Stage Renal disease (permanent kidney failure requiring dialysis or transplant).Coverage Covers 41 million people 35 million elderly, 6 million under-65 disabled Of the 6 million beneficiaries with functional limitations—measured as needing assistance with one or more activities of daily living (ADL) such as eating or bathing—two-thirds(65 percent) are women.2Medicare Covers a Population with Diverse Needs and Significant Vulnerabilities37%31%29%24%23%14%6%Percent of total Medicare population:SOURCE: Medicare Current Beneficiary Survey, 1997-2002; Low-income estimate from Urban Institute based on March 2003 Current Population Survey.Low Income (<150% FPL or less than $13,965, 2004)1+ Functional LimitationFair/Poor HealthRuralCognitive ImpairmentUnder-65 DisabledNursing Home/ Assisted Living Resident37%31%29%24%23%14%6%Compulsory Hospital Insurance (Part A) Part A: The basic Medicare coverage is also referred to as Part A compulsory hospitalization insurance. It's financed through payroll taxes that are shared by employers and employees alike. It's provided free to anyone who qualifies for Medicare benefits Helps cover inpatient care in hospitals, including critical access hospitals, and skilled nursing facilities (not custodial or long-term care). It also helps cover hospice care and some home health care. Certain conditions must be met to get these benefits.Supplemental Medical Insurance (Part B) The next layer of coverage, referred to as Part B supplementary medical insurance, covers most of what isn't covered by Part A and is paid for by the insured individual via an enrollment program.  For 2003 the monthly premium is $58.70 and the coverage also involves a $100 annual deductible and a 20 percent per service co-insurance.Part B cont. Helps cover doctors’ services and outpatient care. It also covers some other medical services that Part A doesn’t cover, such as some of the services of physical and occupational therapists, and some home health care. Part B helps pay for these covered services and supplies when they are medically necessary. Cost: The Medicare Part B premium each month ($78.20 per month in 2005). In some cases, this amount may be higher if the beneficiary didn’t sign up for Part B when they first became eligible. Caution: If the beneficiary didn’t take Part B when they were first eligible, the cost of Part B will go up 10% for each full 12-month period that they could have had Part B but didn’t sign up for it, except in special cases. They will have to pay this penalty as long as they have Part B.Medicare Advantage Program (Part C) Medicare + Choice is a newer program initiated in 1997 and referred to as Part C. If a beneficiary chooses Part C, it takes the place of Parts A and B.  Is offered by private companies, who contract with the federal government, to cover the same or better benefits than the Original Medicare Plan (Parts A and B). Some Medicare Advantage plans include the new Medicare prescription drug coverage (MA-PD plans), others do not (MA plans). Part C is basically a Medicare HMO plan. In 2000 several carriers ceased offering this type of coverage and those individuals who had elected to go with a Medicare HMO had to backtrack and re-enroll in the original Medicare fee-for-service program (Parts A and B). In 2003, Congress signed into law the Medicare Prescription Drug, Improvement and Modernization Act. Everyone with Medicare can get this coverage  Medicare Prescription Drug Coverage is insurance. Private companies provide the coverage. Beneficiaries choose the drug plan and pay a monthly premium.  Like other insurance, if a beneficiary decides not to enroll in a drug plan when they are first eligible, they may pay a penalty if they choose to join later.Medicare Prescription Drug, Improvement and Modernization Act of 2003 (part D)3Medicare Prescription Drug, Improvement and Modernization Act of 2003 (part D) You will pay a monthly premium. Insurers in Utah are offering 45 prescription plans with premiums ranging from $6.33 to $68 a month • You will have to pay the first $250 of your drug costs each year. This is called a deductible. Some plans offer a lower or no deductible.  • After you pay the deductible, Medicare will pay 75% of the next $2,000 of your drug costs. You pay 25% of these costs or $500.  •After total drug costs reach $2,250, you will pay 100% of drug costs on the next $2,850. This is called the coverage gap or doughnut hole. Once your out-of-pocket drug costs, not including premiums, reach $3,600 ($250 deductible + $500 coinsurance + $2,850 coverage gap) Medicare will start paying 95% of your drug costs. (See chart below) Medicare Benefits, Spending, and FinancingMajor Funding Source for Part A & B• Part A (HI): Mandatory payroll tax (85%*)• Part B (SMI): Beneficiary payments and general tax revenues* Note: data in 2003Sources of Medicare Revenue, Parts A and B, 2003* Additional 2% of Part A income attributed to premiums, general revenue, and other.Note: Numbers may not total 100% due to rounding.SOURCE: 2004 Annual Report of the Boards of Trustees of the Federal Hospital Insurance and Federal Supplementary Medical Insurance Trust Funds.Part A: $175.8 billion*Hospital Insurance Trust FundPart B: