By Bob Rosenblatt
The 50th anniversary of Medicare and Medicaid is July 30. Over the years, these programs have evolved from basic safety nets to comprehensive care models designed to improve quality and offer affordable health care for millions. According to the Centers for Medicare and Medicaid Services, about 55 million Americans have Medicare this year and more than 70 million have Medicaid in any given month
Here is some background on the Medicare program and some ideas to consider as you plan coverage of the anniversary.
Who is covered by Medicare?
Medicare provides health insurance for all people age 65 and older. People qualify if they have worked and paid Social Security taxes for 10 years or more, or if they are the spouse of a worker. About 55 million Americans over age 65 are covered.
Medicare also covers people who are getting Social Security Disability Insurance (SSDI) payments because they have a physical or mental ailment that will last at least one year, making them unable to work. Medicare coverage begins after you have been receiving disability payments for two years.
People with end-stage renal disease or amyotrophic lateral sclerosis (ALS) [Lou Gehrig’s disease] get Medicare coverage immediately after diagnosis with no waiting period. About 9 million people with disabilities are covered.
Medicare was created in 1965, and has expanded over the years to cover people with disabilities, and to include drug coverage. Learn about the creation through this reporting blog showing what happened every week in 1965:
What are the benefits of Medicare?
Part A covers care in the hospital and at skilled nursing facilities, home health visits and hospice care. Enrollees pay a deductible of $1,260 for a benefit period, Part A is financed by a 2.9 percent tax on all wages, with 1.45 percent paid by the worker, and 1.45 percent by the employer. The Affordable Care Act (ACA) increased the tax to 2.35 percent of income for individuals earning above $200,000 and couples earning more than $250,000.
Part B covers doctor visits, preventive care and tests, and outpatient care (such as surgeries in a hospital outpatient center or a doctor’s office). The annual deductible is $147. There is a monthly premium of $104.90 and the patient has a co-payment of 20 percent. Premiums increase on a sliding scale for individuals with income above $85,000 a year, and couples with income above $170,000.
Part A and B combined are known as “traditional Medicare.” A beneficiary can use any doctor or hospitals enrolled in the Medicare system.
A Medicare enrollee also needs drug coverage and this is provided through Part D. This is a voluntary program, but more than 60 percent of Medicare beneficiaries have enrolled. The average monthly premium is about $40. Look for a drug plan.
Many Medicare beneficiaries also buy a supplemental health insurance plan, “called Medi-Gap,” to help cover expenses of their co-payments and deductibles. Here is how you find a Medi-gap plan.
Here is a rough summary of costs for people in traditional Medicare who want comprehensive coverage:
Beneficiaries pay $104.9 a month in premiums for Part B, about $40 a month for Part D (for drugs), and about $40 a month for the Medi-gap policy. Total $184 a month. (Higher if their income requires them to pay more for Part B).
Another route for Medicare coverage is Part C, also known as Medicare Advantage. These are health plans such a health maintenance organization (HMOs), or Preferred Provider Organizations (PPOs). It is one-stop shopping with everything included, such as drugs and eyeglasses, which might not be covered under traditional Medicare. But beneficiaries need to stay within the Medicare Advantage plan’s network of doctors and hospitals or face substantial additional payments.
Beneficiaries pay the monthly part B premium and an additional payment to the Medicare Advantage plan. Some have zero premiums. The average monthly payment is about $35 or $40.
Many low-income and minority Medicare beneficiaries are enrolled in Part C plans. About 28 percent of beneficiaries are enrolled in these plans. The figure is 31 percent for African-Americans and 38 percent for Hispanics, according to the Alliance for Heath Reform.
Here is how you find a Medicare Advantage (Part C) plan.
A big Medicare story
The federal government is imposing penalties on hospitals for what are considered improper admissions, not justified by the complex codes and classifications of illness and disease under Medicare regulations. Trying to avoid the financial penalty, the hospitals are rapidly increasing the use of “observation status.” The patient goes into the hospital, but is not considered officially admitted. A patient can be in a bed, getting treatments by doctor, nurses, and technicians, receiving medications, and still be considered in observation status.
The result: a patient can be stuck with a big, unexpected bill.
For example, if a patient needs to go to a rehab facility after a hospital stay, they need three days officially in the hospital. Otherwise, a patient can get to rehab and wind up with a bill for thousands of dollars. Medicare covers 100 days in rehab, with the first 20 days free. But only if they were admitted after three “official” days in a hospital.
“For instance, some observation patients owed over $12,000 for post-hospital SNF care, more than 5 times the amount owed by patients who met Medicare’s 3-day prior hospital inpatient stay requirement for coverage,” according to an AARP report.
Here is more information on observation status and some tools to protect you.
Resources for reporters:
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From the LBJ Library: Political History of Medicare and this fact sheet (archival photos and video also available on this site)
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The Law of Medicare and Medicaid at 50 — Video of panel discussions held at the Yale Law School (November, 2014) that include a “who’s who” of health policy.
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The Affordable Care Act and Medicare report from The Commonwealth Fund
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Tiptoeing into Medicare Data, a tip sheet from Charles Ornstein, Pro Publica
Experts
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Judith Feder, Ph.D., Georgetown University McCourt School of Public Policy; 703-508-9447, federj@georgetown.edu
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Abbe Gluck, J.D., Yale Law School; 203-432-6703, abbe.gluck@yale.edu
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Rahul Rajkumar, M.D., J.D., deputy director, Center for Medicare and Medicaid Innovation, Centers for Medicare & Medicaid Services, 410-786-8036 Rahul.Rajkumar@cms.hhs.gov
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Lee Goldberg, J.D., National Academy of Social Insurance, 202-452-8097, lgoldberg@nasi.org
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Stuart Guterman, vice president, medicare & cost control, The Commonwealth Fund, 202-292-6735, sxg@cmwf.org,
Story ideas
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Talk to older folks who remember a time before Medicare. Compare health care then and now.
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Look for ACO models in your community – they’re focused on outcomes, rather than just treatment. What have been their results in key areas, like chronic disease management, falls, readmissions?
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How has closing the doughnut hole in prescription drug funding affected older adults? Issues of compliance, finances, disease management and outcomes come into play.
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Medicare solvency – will the Medicare Trust Fund really go broke? What are the potential results? What are the candidates and experts saying? How will this affect those millions of baby boomers, who are aging into the system? What does it mean for future generations?
Related resources
- Clearing up confusion about ‘dual eligibles’
- Latest innovations in Medicare
- Medicare: The basics, the politics and the resources
- Links to resources about Medicare
Bob Rosenblatt is a freelance writer specializing in aging issues. He is a senior fellow at the National Academy of Social Insurance and editor of the website HelpWithAging. He was a Washington correspondent for the Los Angeles Times, created the paper’s first beat on aging, and wrote a column for the health section called “Benefits Bob” dealing with insurance and Medicare issues. He can be reached at bob@helpwithaging.com.
