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Social Insurance

Social Insurance. Medicaid and Medicare. Introduction. Medicare. Social Insurance for the elderly Description 1965 Medicare Part A, B, C, . Characteristics of the Medicare Population, 2006. Percent of total Medicare population:. Income less than 200% FPL. 3+ chronic conditions.

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Social Insurance

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  1. Social Insurance Medicaid and Medicare

  2. Introduction

  3. Medicare • Social Insurance for the elderly • Description 1965 • Medicare Part A, B, C,

  4. Characteristics of the Medicare Population, 2006 Percent of total Medicare population: Income less than 200% FPL 3+ chronic conditions Cognitive/mental impairment Fair/poor health Less than high school education 2+ ADL limitations Under-65 disabled Age 85+ Long-term care facility resident NOTES: ADL is activity of daily living. The federal poverty (FPL) threshold for people age 65 and over was $9,669/individual and $12,201/couple in 2006.SOURCE: Income data from US Census Bureau, Current Population Survey published on statehealthfacts.org; all other data from Kaiser Family Foundation analysis of the Medicare Current Beneficiary Survey 2006 Access to Care file.

  5. Medicare Enrollment, by Eligibility Status, 2001-2007 In millions: 44.0 43.0 42.5 41.7 41.1 41.0 40.1 SOURCE: Kaiser Family Foundation, based on Annual Report of the Boards of Trustees of the Federal Hospital Insurance and Federal Supplementary Medical Insurance Trust Funds, 2002-2008.

  6. Medicare: Part A • Medicare Part A is a type of hospital insurance provided by Medicare. The coverage provided by Part A includes inpatient care in hospitals, nursing homes, skilled nursing facilities, and critical access hospitals. Part A does not include long-term or custodial care. If you meet specific requirements, then you may also be eligible for hospice or home health care. • Fiscal Intermediaries handle the claims for the Medicare Part A plan. These are private insurance companies that act as agents for the federal government in processing and paying Medicare claims.

  7. Medicare Part A (Health Insurance) Trust Fund Balance, 2001-2019Under High Cost, Low Cost, and Intermediate Assumptions Fund balance as % of annual expenditures: Low cost ActualProjected Intermediate High cost NOTE: The Medicare Trustees recommend that the HI Trust Fund assets should be maintained at a level of at least 100% of annual expenditures. SOURCE: Kaiser Family Foundation, based on 2008 Annual Report of the Boards of Trustees of the Federal Hospital Insurance and Federal Supplementary Medical Insurance Trust Funds.

  8. Medicare: Part B • Medicare Part B is a medical insurance provided by the federal government to eligible beneficiaries. The coverage provided by Part B includes medically necessary doctor's services, outpatient care, and most other services that Part A does not cover such as some physical or occupational therapies and some home health care services. Part B covers preventive services as well.

  9. Medicare: Part C • Medicare Part C combines your Part A and Part B options and must cover all medically needed services. The difference is that private insurance companies that are approved by Medicare provide this type of coverage. In most cases, Part C is a lower-cost alternative to the Original Medicare Plan, and providers usually offer extra benefits and include prescription drug coverage (Part D). • Part C plans often have networks, and you must use the doctors or hospitals that belong to the plan. These plans help you coordinate and manage your overall care. Part C includes specialized care for people who need a large amount of health care services. If you find yourself needing medical attention while traveling out of your plan coverage area, you will still be covered for emergency or urgent care services.

  10. Medicare: Part D • Prescription Drug Coverage • “Donut hole” $3,600 • Part D is prescription drug coverage insurance that is provided by private companies approved by Medicare. You need to enroll when you first become eligible to keep from paying a penalty cost later. Part D was designed to help people with Medicare to lower their prescription drug costs and to protect against future costs. A prescription drug plan will also enable you to have greater access to medically necessary drugs.

  11. Effects of Medicare: Part D • Shang and Goldman 2007 • Overall, a $1 increase in prescription drug spending is associated with a $2.06 reduction in Medicare spending. Furthermore, the substitution effect decreases as income rises, and thus provides support for the low-income assistance program of Medicare Part D.

  12. Prescription Drug Coverage Among Medicare Beneficiaries, by Income, 2006 $10,000 or less $10,001-$20,000 $20,001-$30,000 $30,001-$40,000 $40,001 or more (N=6.4 mil) (N=9.4 mil) (N=7.0 mil) (N=5.7 mil) (N=6.7 mil) NOTES: Percents rounded to the nearest whole number. N=weighted estimate of number of beneficiaries; mil=million. SOURCE: Kaiser Family Foundation analysis of the CMS Medicare Current Beneficiary Survey Access to Care File, 2006.

  13. HHS Estimates of Prescription Drug Coverage Among Medicare Beneficiaries, 2008 No Drug Coverage 4.6million10% Stand-Alone PDPs Other Creditable Drug Coverage1 11.2million25% 4.0million9% Total in Part D Plans: 25.4 Million (57%) 10.2million23% 6.2million14% Dual Eligibles in PDPs Retiree DrugCoverage2 8.0million18% Medicare Advantage Drug Plans3 Total Number of Beneficiaries = 44.2 Million NOTES: Estimates do not sum to 100% due to rounding. 1Includes Veterans Affairs, Indian Health Service, state pharmacy assistance programs, employer plans for active workers, Medigap, multiple sources, and other sources. 2Includes Retiree Drug Subsidy (RDS) coverage; retiree coverage without RDS; and FEHBP and TRICARE retiree coverage. 3Includes 0.4 million enrolled in other Medicare health plan types. PDP = Prescription Drug Plan. SOURCE: Kaiser Family Foundation analysis of HHS data, January 31, 2008 (Data as of January 2008).

  14. Standard Medicare Prescription Drug Benefit, 2008 Plan Pays 15%; Medicare Pays 80% Enrollee Pays 5% $5,726 in Total Drug Costs($4,050 out of pocket) $3,216 Coverage Gap (“Doughnut Hole”) Enrollee Pays 100% $2,510 in Total Drug Costs Enrollee Pays 25% Plan Pays 75% $275 Deductible $320 Average Annual Premium NOTE: Annual premium amount based on $26.70 national average monthly beneficiary premium (CBO, March 2008). Amounts for premium, coverage gap, and catastrophic coverage threshold rounded to nearest dollar. SOURCE: Kaiser Family Foundation illustration of standard Medicare drug benefit for 2008 (standard benefit parameter update from CMS, April 2007).

  15. Medicare Part D Enrollees Who Reached the Coverage Gap in 2007 Excludes Part D Enrollees Who Receive Low-Income Subsidies and Non-Users Did not reach the coverage gap Reached the coverage gap NOTES: Estimates based on analysis of retail pharmacy claims for 1.9 million Part D enrollees in 2007.SOURCE: Georgetown University/NORC/Kaiser Family Foundation analysis of IMS Health LRx database, 2007.

  16. The Standard Medicare Part D Benefit Coverage Gap, 2006-2017 Amount of beneficiary out- of-pocket costs in the gap Actual Projected SOURCE: Kaiser Family Foundation, based on 2008 Annual Report of the Boards of Trustees of the Federal Hospital Insurance and Federal Supplementary Medical Insurance Trust Funds.

  17. Financing Medicare • Part A • Payroll Taxes • Medicare FICA is uncapped and 2.9% split 50/50 with the employer

  18. Medicare Cost Containment • Diagnostic Related Groups (DRGs) • Move towards risk adjustments • Reforming Physician Reimursements • Limits balance billing (115% of Medicare rate) • Growth Rates Capped • Medicare Managed Care • Selection Bias in Medicare HMOs

  19. Medicare Spending as a Share of Total Federal Outlays, FY2009 FY 2009 Total Outlays = $3.0 trillion SOURCE: Kaiser Family Foundation, based on OMB, Fiscal Year 2009 Budget, February 2008; Baseline Category Totals.

  20. Supplemental Coverage Among Medicare Beneficiaries, by Income, 2006 $10,000 or less $10,001-$20,000 $20,001-$30,000 $30,001-$40,000 $40,001 or more (N=6.4 mil) (N=9.4 mil) (N=7.0 mil) (N=5.7 mil) (N=6.7 mil) NOTES: Percents rounded to the nearest whole number. N=weighted estimate of number of beneficiaries; mil=million. SOURCE: Kaiser Family Foundation analysis of the CMS Medicare Current Beneficiary Survey Access to Care File, 2006.

  21. Medicare Benefit Payments, by Type of Service, 2007 4% 7% Part A Part B Part D Part A and B 4% 30% 4% 20% 5% 11% 18% Medicare Advantage (Part C) Total Benefit Payments = $426 billion NOTE: Does not include administrative expenses such as spending for implementation of the Medicare drug benefit and the Medicare Advantage program. SOURCE: Kaiser Family Foundation, based on Congressional Budget Office, Medicare Baseline, March 2008.

  22. Estimated Sources of Medicare Revenue, FY2009 TOTAL $506.8 Billion PART A $243.5 Billion PART B $202.4 Billion PART D $60.9 Billion SOURCE: 2008 Annual Report of the Boards of Trustees of the Federal Hospital Insurance and Federal Supplementary Medical Insurance Trust Funds.

  23. Distribution of Total Medicare Beneficiaries and Spending, 2005 Average per capita Medicare spending (FFS only): $7,064 Average per capita Medicare spending among top 10% (FFS only): $44,220 Total Number of FFS Beneficiaries: 37.5 million Total Medicare Spending: $265 billion NOTE: FFS is fee-for-service. Includes noninstitutionalized and institutionalized Medicare fee-for-service beneficiaries, excluding Medicare managed care enrollees. SOURCE: Kaiser Family Foundation analysis of the CMS Medicare Current Beneficiary Survey Cost & Use file, 2005.

  24. Medicare Beneficiaries and The Number of Workers Per Beneficiary Number of workers per beneficiary Millions of beneficiaries SOURCE: Kaiser Family Foundation, based on 2001 and 2008 Annual Reports of the Boards of Trustees of the Federal Hospital Insurance and Federal Supplementary Medical Insurance Trust Funds.

  25. Median Out-of-Pocket Health Care Spending as a Percent of Income for Elderly vs. Non-Elderly Households, 1998-2003 Elderly Non-Elderly SOURCE: Kaiser Family Foundation/UCLA analysis of Consumer Expenditure Survey, 1998-2003.

  26. Projected Medicare Outlays, 2008-2018 Total outlays in billions: 16% 16% 16% 17% 17% 18% 18% 19% 20% 20% 20% 3% 3% 3% 3% 3% 3% 4% 4% 4% 4% 4% Share of: Federal Budget Gross Domestic Product NOTE: Numbers have been rounded to nearest whole number. SOURCE: Kaiser Family Foundation, based on Congressional Budget Office, The Budget and Economic Outlook: An Update, January 2008.

  27. Medicare Advantage Enrollment, 1999-2008 Enrollment in millions: NOTE: Includes local HMOs, PSOs, and PPOs, regional PPOs, PFFS plans, Cost contracts, Demonstrations, HCPP, and PACE contracts. SOURCE: Kaiser Family Foundation, based on Mathematica Policy Research, Inc. “Tracking Medicare Health and Prescription Drug Plans Monthly Report” December 1999-2007. CMS Medicare Advantage, Cost, PACE, Demo, and Prescription Drug Plan Contract Report, Monthly Summary Report, July 2008.

  28. Average Payments to Medicare Advantage Plans Relative to Traditional Fee-for-Service Medicare Traditional Fee-for-Service Medicare = 100% Medicare Advantage Plan Types SOURCE: Kaiser Family Foundation, based on Medicare Payment Advisory Commission, March 2008.

  29. Medicaid • Social Insurance for the poor

  30. Other Social Insurance Programs • State Children’s Health Insurance Program (SCHIP) • Veterans Administration

  31. Crowding Out • When private insurance take up falls after introduction of increases in public benefits. • Concerns over public option.

  32. HHS Estimates of Low-Income Subsidy Eligibility and Participation Under the Medicare Drug Benefit, 2008 Eligible but not receiving subsidy 2.6 million 21% Full dual eligibles automatically receiving subsidy Eligible but estimated to have other drug coverage .5 million 4% 6.2 million 49% Applied for and receiving subsidy 1.5 million 12% Future anticipated facilitated enrollment <0.1 million (0.5%) 1.7 million 13% MSP and SSI recipients automatically receiving subsidy Total Eligible for Low-Income Subsidies = 12.5 million NOTES: MSP is Medicare Savings Program; SSI is Supplemental Security Income. SOURCE: Kaiser Family Foundation, based on HHS data, January 31, 2008 ( Data as of January 2008).

  33. Medicaid Today Health Insurance Coverage 29 million children & 15 million adults in low-income families; 14 million elderly and persons with disabilities Assistance to Medicare Beneficiaries 7.5 million aged and disabled — 19% of Medicare beneficiaries Long-Term Care Assistance 1 million nursing home residents; 41% of long-term care services MEDICAID Support for Health Care System and Safety-net 16% of national spending on health services and supplies State Capacity for Health Coverage 43% of federal funds to states Source: Kaiser Commission on Medicaid and the Uninsured, 2008

  34. Medicaid’s Role for Selected Populations Percent with Medicaid Coverage: Families Aged & Disabled Note: “Poor” is defined as living below the federal poverty level, which was $17,600 for a family of 3 in 2008. SOURCE: Kaiser Commission on Medicaid and the Uninsured, Kaiser Family Foundation, and Urban Institute estimates; Birth data: NGA, MCH Update.

  35. Medicaid Enrollees and Expendituresby Enrollment Group, 2005 Elderly 10% Elderly 28% Disabled 14% Adults 26% Disabled 42% Children 50% Adults 12% Children 18% Total = 59 million Total = $275 billion SOURCE: Kaiser Commission on Medicaid and the Uninsured and Urban Institute estimates based on 2005 MSIS data.

  36. Medicaid Payments Per Enrolleeby Acute and Long-Term Care, 2005 $13,524 $11,839 $2,102 $1,617 SOURCE: Kaiser Commission on Medicaid and the Uninsured and Urban Institute estimates based on 2005 MSIS data.

  37. Medicaid Enrollment Growth Average Annual Growth Rates, 2000-2006 Aged/Disabled Families SOURCE: Kaiser Commission on Medicaid and the Uninsured andUrban Institute estimates based on KCMU Medicaid enrollment data collected by Health Management Associates from 44 states inflated proportionally to national totals, 2007.

  38. Overall Average Annual Total Medicaid Spending Growth, 2000-2006 Adjusted ‘05-’06 ‘00-’02 ‘02-’04 ‘04-’05 ‘05-’06 Annual Spending at End of Period (billions) $257.3 $295.9 $315.0 $314.5 $310.8 NOTE: Adjusted expenditures exclude all prescription drug spending for dual eligibles to remove the effect of their transition to Medicare Part D in 2006. SOURCE: Kaiser Commission on Medicaid and the Uninsured andUrban Institute, 2007; estimates based on data from HCFA Financial Management Reports, 2006 (HCFA-64/CMS-64).

  39. Medicaid and SCHIP Enrollment of Children, 1998-2005 Millions of Children SOURCE: Kaiser Commission on Medicaid and the Uninsured and Urban Institute analysis of HCFA-2082, MSIS, and SEDS data, 2007.

  40. Income and Health Status of Medicaid and the Low-Income Privately Insured, 2002 Percent of Enrolled Adults: Low-Income and Privately Insured Medicaid Poor Fair or Poor Health Health Conditions that limit work SOURCE: Coughlin et. al, “Assessing Access to Care Under Medicaid: Evidence for the National and Thirteen States,” Health Affairs 24(4):1073-1083. Based on a 2002 NSAF analysis for Kaiser Commission on Medicaid and the Uninsured.

  41. Concentration of Health Spending in the Medicaid Population, 2001 <$25,000 in Costs 96% <$25,000 in Costs 52% >$25,000 in Costs • >$25,000 in Costs • Children (.2%) • Adults (.1%) • Disabled (1.6%) • Elderly (1.8%) Children 3% Adults 1% Disabled 25% Elderly 20% Total = 46.9 million Total = $180.0 billion SOURCE: Kaiser Commission on Medicaid and the Uninsured/Urban Institute estimates based on MSIS 2001 data.

  42. Medicaid Expenditures by Service, 2006 DSH Payments 5.6% Inpatient 14.1% Home Health and Personal Care 14.8% Physician/ Lab/ X-ray 3.8% Mental Health 1.0% Outpatient/Clinic 6.8% Long-Term Care 35.8% ICF/MR 4.3% Acute Care 58.5% Drugs 5.5% Nursing Facilities 15.7% Other Acute 6.9% Payments to Medicare 3.3% Payments to MCOs 18.0% Total = $304.0 billion NOTE: Total may not add to 100% due to rounding. Excludes administrative spending, adjustments and payments to the territories. SOURCE: Urban Institute estimates based on data from CMS (Form 64), prepared for the Kaiser Commission on Medicaid and the Uninsured.

  43. Medicaid in the Health System, 2006 Medicaid as a share of national health care spending: Total National Spending (billions) $2,106 $648 $660 $125 $217 NOTE: Does not include spending on SCHIP SOURCE: Kaiser Commission on Medicaid and the Uninsured, based on A Catlin et al, “National Health Spending in 2006: A Year of Change for Prescription Drugs,” Health Affairs 27(1)14-29, January/February 2008. Based on National Health Care Expenditure Data, CMS, Office of the Actuary.

  44. Medicaid Financing of Safety-Net Providers Public Hospital Net Revenues by Payer, 2004 Health Center Revenues by Payer, 2006 Total = $29 billion Total = $8.1 billion SOURCE: Kaiser Commission on Medicaid and the Uninsured, based on America’s Public Hospitals and Health Systems,2004, National Association of Public Hospitals and Health Systems, October 2006. KCMU Analysis of 2006 UDS Data from HRSA.

  45. National Spending on Nursing Home and Home Health Care, 2006 Nursing Home Care Home Health Care Total = $124.9 billion Total = $52.7 billion Note: Medicaid percentage includes spending through SCHIP. Other includes private and public funds SOURCE: Kaiser Commission on Medicaid and the Uninsured, based on Health Affairs January/February 2008, CMS, National Health Accounts.

  46. Growth in Medicaid Long-Term Care Expenditures, 1990-2006 $109 In Billions: $100 $92 41% 37% 32% $75 30% $54 20% 59% $32 63% 70% 68% 13% 80% 87% Note: Home and community-based care includes home health, personal care services and home and community-based service waivers. SOURCE: Kaiser Commission on Medicaid and the Uninsured and Urban Institute analysis of HCFA/CMS-64 data.

  47. Impact of Unemployment Growth on Medicaid and SCHIP and the Number Uninsured $3.4 $1.4 State 1.1 1.0 = 1% & Increase in National Unemployment Rate Federal $2.0 Increase in Medicaid and SCHIP Enrollment (million) Increase in Uninsured (million) Increase in Medicaid and SCHIP Spending (billion) Source: Stan Dorn, Bowen Garrett, John Holahan, and Aimee Williams, Medicaid, SCHIP and Economic Downturn: Policy Challenges and Policy Responses, prepared for the Kaiser Commission on Medicaid and the Uninsured, April 2008

  48. IL State Authorized Children’s Eligibility for Medicaid/SCHIP by Income, January 2008 NH VT WA ME MT ND MN MA OR NY SD WI ID RI MI CT WY PA NJ IA NE OH IN WV DE NV IL UT VA MD CO KS MO KY CA NC DC TN OK SC AR AZ NM AL GA MS TX LA AK FL HI < 200% FPL (6 states) 200-250% FPL (22 states) Effective >250% FPL (23 states) *The Federal Poverty Line (FPL) for a family of three in 2007 is $17,170 per year. **Effective eligibility higher than 250% FPL accounts for earnings disregards. ***IL uses state funds to cover children above 200% FPL. SOURCE: Based on a national survey conducted by the Center on Budget and Policy Priorities for the Kaiser Commission on Medicaid and the Uninsured., 2008.

  49. Authorized Medicaid Eligibility for Working Parents by Income, January 2008 NH VT WA ME MT ND MN MA OR NY SD WI ID RI MI CT WY PA NJ IA NE OH IN DE NV IL IL WV UT VA MD CO KS MO KY CA NC DC TN OK SC AR AZ NM AL GA MS TX LA AK FL HI < 50% FPL (12 states) 50% - 99% FPL (21 states) US Median Eligibility = 63% FPL 100% or higher FPL (18 states including DC) NOTE: The Federal Poverty Line (FPL) for a family of three in 2008 is $17,600 per year. AR, IN, & UT operate waivers allowing higher-income parents to enroll, but the coverage has higher cost-sharing and reduced benefits. SOURCE: Based on a national survey conducted by the Center on Budget and Policy Priorities for the Kaiser Commission on Medicaid and the Uninsured, 2008.

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