Lecture 5 Medicare and Other Social Insurance Programs

1. Lecture 5Medicare and Other Social Insurance Programs • Medicare • Unemployment Insurance • Temporary Disability Laws • Workers’ Compensation

2. Medicare • Eligibility • Retirees 65 or older • Dependents 65 or older of workers over 62 • Survivors 65 or older • Disabled persons after 2 years of benefits • Workers, spouses or dependents for end-stage kidney disease • Anyone not eligible who is 65 or older can enroll voluntarily • Primary/secondary rules

3. Medicare Benefits • Part A • No cost (except for voluntary enrollment) • Hospital benefits • Skilled nursing facility benefits • Home health care benefits • Hospice benefits • Part B • Monthly premium ($45.50 for 1999) • Medical expenses not covered under Part A • Numerous exclusions • Deductible and coinsurance • Fee limitations on doctors

4. Medicare Part C Medicare+Choice Balanced Budget Act of 1997 Voluntary alternatives to traditional Medicare Must be eligible for Parts A and B and elect to replace them with Part C Receive supplemental benefits 7 million covered (17%)

5. Medicare Part C 3 Types of plans to choose from Coordinated Care Plans Provider Sponsor Organizations Medicare+Choice MSA Medicare Risk HMOs eliminated Provider receives a uniform capitation payment Annual open enrollment period

6. Unemployment Insurance • Benefits are taxable income to the recipient • Congress instituted this program in 1935 • Objectives • Provide income to workers during temporary unemployment • Help unemployed find jobs • Encourage employers to stabilize employment • Maintain a stable labor supply

7. Unemployment Insurance - (cont.) • Financing of benefits • Federal tax: 0.8% of covered payroll • State tax: experience rated • Eligibility • Prior attachment to labor force • Able and available to work • Actively seeking work • Prescribed waiting period • Free of disqualification • Voluntarily leaving job • Discharged for misconduct • Labor dispute

8. Unemployment Insurance - (cont.) • Benefits • Vary by state • Typically 50% of earnings • Maximum benefits range from $180 to $350/week • Paid for 26 weeks (can be extended by law in periods of high unemployment)

9. Temporary Disability Laws • Apply in California, Hawaii, New Jersey, New York, Rhode Island and Puerto Rico • Covers nonoccupational disability • Eligibility • Employment requirement • Definition of disability • Waiting period • Benefits are taxable income to recipient

10. Workers’ Compensation • Benefits are tax free to the recipient • Each state has its own law • Eligibility • Covered occupation • Accidental occupational injuries arising out of and in the course of employment • Also coverage for occupational disease

11. Workers’ Compensation - (cont.) • Benefits • Medical care • No deductible, coinsurance or limits • Disability income • Approximately 2/3 coverage wages • Death benefits • Rehabilitative services

12. Workers’ Compensation - (cont.) • Problems • Extent of coverage • Adequacy of benefits • Increasing costs • Medical costs • Increased benefits • Expansion of coverage • Increased litigation • Fraud • Concept of 24-Hour Coverage