Which Of The Following Describes A Federal Program For The Elderly That Covers Hospital Services?

• Periodical Listing
• Health Care Financ Rev
• v.22(ane); Fall 2000
• PMC4194690

Health Care Financ Rev. 2000 Fall; 22(1): 75–103.

Medicare: 35 Years of Service

Medicare in 1965

For persons who are trying to understand what we were up to, the first broad signal to go along in heed is that all of us who developed Medicare and fought for it had been advocates of universal national health insurance. We all saw insurance for the elderly as a fallback position, which nosotros advocated solely because information technology seemed to have the best run a risk politically Although the public record contains some explicit denials, we expected Medicare to be a get-go step toward universal national health insurance, peradventure with "Kiddicare" as another step… President Franklin Roosevelt feared that health insurance was so controversial, because of doctors' opposition, that if he included information technology in his program for economical security he might lose the entire program.

Robert One thousand. Brawl, Social Security Commissioner under Presidents Kennedy, Johnson, and Nixon, 1995

Enactment of Medicare

After President Franklin D. Roosevelt decided non to include health insurance in his proposed Social Security Act in 1934, he authorized his staff to do additional work on the proposal, including consultations with a broad array of groups (Corning, 1969). This piece of work was subsequently incorporated into a national health insurance bill introduced in the Congress in 1943—commonly referred to as the Wagner, Murray, Dingell bill (Congressional Quarterly Almanac, 1965). In 1945, President Truman endorsed this bill and became the first president to send a national wellness insurance beak to the Congress. By the end of Truman's term, in 1952, Medicare was proposed as a scaled down version of national health insurance that would cover all Social Security beneficiaries—the elderly, widows, and orphans. President Eisenhower was opposed to social insurance for health care; in 1954, he proposed a Federal reinsurance plan for private insurance companies. President Kennedy's 1963 proposal for health care for the elderly passed the Senate in 1964, just failed in the Business firm.

After more than than a decade of argue on wellness insurance for the elderly, when Johnson was elected President in 1964, he asked Congress to give Medicare top priority. The earlier efforts towards national health reform finally resulted in coverage for the elderly (Medicare) and the poor (Medicaid), with advocates hoping that coverage would be expanded to other population groups at a subsequently date. In honor of President Truman'southward leadership, President Johnson flew to the Truman Library in Independence, Missouri to sign the bill into law on July 30, 1965 and presented the outset two Medicare cards to former President Truman and Mrs. Truman. Reflecting on the corporeality of fourth dimension that had transpired, Johnson noted at the ceremony: "Nosotros marvel not simply at the passage of this bill, just what we marvel at is that it took so many years to laissez passer it." (Harris, 1966a).

Medicare Covers the Elderly in 1965

I am 1 of your old retired teachers that has been forgotten. I am 80 years old and for ten years I have been living on a bare nil, two meals a 24-hour interval, one egg, a soup, because I want to be independent. I am of Scotch beginnings, my father fought in the Ceremonious War to the end of the war, therefore, I have information technology in my claret to be contained and my dignity would not let me get downward and be on welfare. And I worked so difficult that I have pernicious anemia, $nine.95 for a lilliputian bottle of liquid for shots, wholesale, I couldn't pay for it.

Hearings of the Subcommittee on Problems of the Aged and Crumbling of the Commission of Labor and Public Welfare, 1959 (Stevens, 1996)

When Medicare was enacted in 1965, America was in many ways a dissimilar identify than information technology is today.

Poverty

In 1965, the elderly were the group virtually probable to be living in poverty—nearly one in three were poor (Effigy one). Today, the poverty rate for the elderly is similar to that of the age group 18-64—about 1 in 10 are poor. Children are now the group nearly likely to be living in poverty.

Poverty Rates, by Age: 1966-1998

Access to Care for Minorities

Earlier a hospital could exist certified for Medicare, it had to do more than than have a plan to end discrimination: It had to demonstrate nondiscrimination.

Segregation denied minorities access to the same health care as white persons. With the passage of the Civil Rights Act (recipients of Federal funds are prohibited from discrimination based on race) in 1964 and Medicare (the source of the Federal funds) in 1965, minorities were able to receive health intendance in the same hospitals and clinics used by white persons. More than 1,000 Medicare and Public Health Service staff worked with hospitals to make sure they understood they would accept to serve all Americans when they signed up for the federally funded Medicare program.

Black hospitalization rates were about 70 percent of white hospitalization rates in the program's first few years. Over the next several years, hospitalization rates rose to comparable levels. In 1963, minorities age 75 or over averaged four.eight visits to the md; by 1971, their visits grew to vii.3, comparable with white utilization rates (National Center for Wellness Statistics, 1963-1964; 1971).

While Medicare and Medicaid take contributed to considerable progress in the health of minorities, in that location is still room for improvement as disparities in health status, utilization, and outcomes persist today (Gornick, 2000).

Insurance Coverage

About one-half of America'due south seniors did not take hospital insurance prior to Medicare. By contrast, 75 percent of adults under age 65 had hospital insurance, primarily through their employer. For the uninsured, needing hospital services could mean going without wellness intendance or turning to family unit, friends, and/or charity to cover medical bills. More than 1 in 4 elderly were estimated to become without medical care due to toll concerns (Harris, 1966b).

Medicare, along with other programs, notably Social Security, and a strong economy, have profoundly improved the ability of the elderly and the disabled to live without these worries. Medicare covers nearly all of the elderly (about 97 percent), making them the population grouping nearly likely to have health insurance coverage. Today, the groups least likely to have health insurance coverage are immature people, Hispanics, and low-wage workers.

Medicare Modeled on Private Insurance Plans

We proposed assuring the same level of care for the elderly as was then enjoyed by paying and insured patients; otherwise, we did not intend to disrupt the condition quo. Had we advocated anything else, information technology never would accept passed.

Medicare's benefit package, administration, and payment methods were modeled on the private sector insurance plans prevalent at the time, such as Blue Cross and Blue Shield plans and Aetna's program for Federal employees (the model for Medicare Office B) (Ball, 1995). Hospitals were allowed to nominate an intermediary (a private insurance visitor) to practise the actual work of beak payment and to be the contact point with the hospitals. Payment methods for facilities (hospitals, nursing dwelling, and home health) were based on reasonable costs. Payments for physicians and other suppliers were based on the lower of the surface area'due south prevailing or their ain customary or actual accuse. These payment methods were designed to make sure Medicare beneficiaries would have access to intendance on the same terms as privately insured patients. When Medicare began, there was concern, which did non turn out to be the example, that demand for services would strain the capacity of the health care system (Gornick, 1996).

Advantages of this approach included: faster implementation—and with eleven months betwixt enactment and implementation that was no pocket-size consideration—and political acceptability: The programme looked familiar to providers, insurance companies who would administer the new program, and beneficiaries.

Disadvantages of this arroyo included: payment methods that turned out to exist inflationary, prompting considerable legislative activity in subsequent years to control escalating costs; and using private insurance companies to administrate the programme without allowing for their selection on a competitive basis, which hampered command of the programme. Medicare's benefit packet was not designed for some of the specific needs of the elderly. For example, today, near one-third have hearing impairments, nearly 20 percent have visual impairments, and nigh one-third take no natural teeth (National Center for Wellness Statistics, 1999). Nevertheless, hearing aids, eyeglasses, dentures, outpatient prescription drugs, and long term nursing dwelling intendance were not by and large covered by individual insurance and and so were not covered by Medicare. In that location was no limit on beneficiary liability, leaving beneficiaries vulnerable to catastrophic expenses. Nor was there provision in the statute for what are at present known as preventive services. Simply medical intendance that was necessary for the handling of an injury or an affliction was covered.

Medicare Covers the Disabled in 1972

In 1972, Congress extended Medicare coverage to the disabled on Social Security Disability Insurance (SSDI) and those with end stage renal disease (ESRD). Afterwards receiving SSDI, the disabled take a lengthy waiting period, 24 months, before Medicare coverage begins. In 1973, nearly 2 1000000 persons with disabilities and ESRD enrolled in Medicare. People with ESRD needed very expensive dialysis services to stay alive; concerns about their admission to such life-saving services motivated the expansion of Medicare coverage. ESRD remains the but disease-specific group eligible for Medicare coverage; although others have been proposed, notably human immunodeficiency virus acquired immunodeficiency syndrome, none has been enacted.

Legislative History

When Medicare was enacted, the original statute comprised 58 pages of text. Over the subsequent 35 years, the statute has grown almost tenfold to more than 500 pages. Highlights past blazon of reform include:

• Eligibility—Pregnant expansion of eligibility occurred once, when the disabled and those with ESRD were included in 1972. Public-sector employees were required to pay Medicare payroll taxes in the early on 1980s.

• Financing—Part A acquirement sources were expanded several times in the 1980s and 1990s to filibuster insolvency of the Hospital Insurance (HI) Trust Fund. Part B premiums were initially gear up at half of the plan'due south cost, but due to plan spending growing faster than Social Security do good increases, premiums were limited to the growth in the Social Security cost of living adjustment and are now set by statute at 25 pct of program spending.

• Payment Policy—Nigh of the major legislative activity in the 1980s and 1990s focused on payment policy, in an effort to control rapidly escalating program spending. Hospitals and other Part A providers were moved from cost-based payment to prospective payment systems (PPSs). Physicians and many other Office B suppliers were moved from charge-based payment to fee schedules. Managed care plans' gamble-based payment was modified at the end of the 1990s to reduce the geographic variation in payment amounts and to adjust for the relative health condition of their patients.

• Benefits—The do good package was essentially updated in the 1988 Medicare Catastrophic Coverage Act (MCCA) to include coverage of outpatient prescription drugs and other changes. Information technology was repealed in 1989 after college income elderly protested a new tax to partially finance the new benefits. Every bit the importance of preventive benefits became clear, many take been added by the Congress on an incremental basis. Other changes in covered services have included the add-on of hospice care, improved coverage for mental health services, and expanded home wellness benefits.

Chronology of Major Legislative Activity

• July xxx, 1965—The Medicare program, authorized under Title Xviii of the Social Security Act, was enacted to provide health insurance coverage for the elderly.

• July 1, 1966—Medicare benefits began for more than 19 million individuals enrolled in the program.

• 1972—Medicare eligibility was extended to individuals under age 65 with long-term disabilities subsequently 24 months of Social Security disability benefits and to individuals with ESRD subsequently a iii-calendar month course of dialysis; 2 1000000 such individuals enrolled in the program in 1973.

• 1980—The home wellness do good was broadened; the prior hospitalization requirement was eliminated as was the limit on visits. Medicare supplemental insurance, also called "medigap," was brought under Federal oversight.

• 1982—A prospective run a risk-contracting option for wellness maintenance organizations (HMOs) was added to facilitate program participation. Hospice benefits for the terminally ill were covered. Medicare was made secondary payer for aged workers and their spouses. Medicare utilization and quality-control peer review organizations were established. Rate-of-increase limits were placed on inpatient hospital services.

• 1983—An inpatient hospital PPS, in which a pre-determined rate is paid based on patients' diagnoses, was adopted to replace cost-based payments. (The PPS was later on adopted by other payers and other countries.) Federal employees were required to pay the HI payroll tax.

• 1985—Medicare coverage was fabricated mandatory for newly hired State and local authorities employees.

• 1988—The MCCA was the largest expansion of Medicare benefits since the program was enacted. It included an outpatient prescription drug benefit, a cap on patient liability for catastrophic medical expenses, expanded skilled nursing facility (SNF) benefits, and modifications to the cost-sharing and episode-of-illness provisions of Part A Expansions were funded in part by an increment in the Part B premium and a new supplemental income-related premium for Part A beneficiaries. Under Medicaid, States were required to provide assistance with Medicare cost-sharing to low-income Medicare beneficiaries.

• 1989—The MCCA was repealed after higher-income elderly protested the new tax. A new fee schedule for physician services, called the resource-based relative value scale (RBRVS), was enacted. Physicians were required to submit bills to Medicare on behalf of all Medicare patients. Casher liability for dr. bills, above and beyond what Medicare pays, was limited. (The RBRVS was afterwards adopted by other payers.)

• 1990—Additional Federal standards for Medicare supplemental insurance policies were added. The Role B deductible was increased and prospective payments for inpatient hospital uppercase expenditures replaced payments based on reasonable costs. Screening mammography was covered and fractional hospitalization services in customs mental health centers were covered.

• 1993—The How-do-you-do payroll revenue enhancement was applied to all wages, rather than the lower Social Security capped amount; and a new taxation on Social Security benefits was imposed above a threshold, with revenues placed in the Hi Trust Fund. Nether Medicaid, States were required to cover Medicare Part B premiums for specified low-income Medicare beneficiaries.

• 1996—The Health Insurance Portability and Accountability Human action contained a number of provisions regarding fraud and abuse and established a mandatory appropriation to secure stable funding for plan integrity activities and opened program integrity contracts to competitive procurement.

• 1997—The Counterbalanced Upkeep Act (BBA) included the most extensive legislative changes since the program was enacted. It:

  • Reduced payment increases to providers, thereby extending solvency of the Hullo Trust Fund.

  • Established Medicare+Choice, a new array of managed intendance and other health programme choices for beneficiaries, with a coordinated annual open enrollment process, a major new beneficiary education entrada, and significant changes in payment rules for health plans.

  • Expanded coverage of preventive benefits.

  • Created new home health, SNF, inpatient rehabilitation and outpatient hospital PPSs for Medicare services to meliorate payment accuracy and to help further restrain the growth of health care spending.

  • Created new approaches to payment and service delivery through research and demonstrations.

• 1999—The Balanced Upkeep Refinement Human action increased payments for some providers relative to the payment reductions in the BBA 1997.

Medicare in 2000

During the past 35 years, Medicare has provided health care coverage to more 93 one thousand thousand elderly and persons with disabilities; more than 39 million are alive today. As a consequence, Medicare has made important contributions to improvements in wellness status for elderly and disabled beneficiaries.

Medicare Beneficiaries

The Medicare program provides health insurance coverage to a diverse and growing segment of the U.South. population (Effigy 2). Over its history, the population that is covered nether the program has not but expanded in numbers, but has grown more circuitous in composition and health care needs. More than 19 one thousand thousand elderly entered Medicare in 1966; today, Medicare provides insurance coverage for 34 meg older Americans. The number of elderly and disabled enrollees has more than than doubled since 1965 to 39 million today. The Medicare population is expected to about double again to more than 77 one thousand thousand in 2030 (22 percent of the population) (Figures two and ​ 3).

Number of Medicare Beneficiaries: 1970-2030

Crumbling of the U.S. Population: 1970-2030

Medicare chop-chop expanded access to intendance for the elderly. Hospital discharges averaged 190 per 1,000 elderly in 1964 and 350 per 1,000 by 1973; the proportion of elderly using physician services jumped from 68 to 76 percent from 1963-1970. Currently, more than 94 percent of elderly beneficiaries receive a health care service paid for by Medicare. Similarly, Medicare has improved access for disabled enrollees.

Sex, Marital Status, Race, and Historic period

Inside the elderly population, there are more females than males enrolled in Medicare, primarily considering of the longer life expectancy of females. The proportion that is female increases with age: females are more than 70 percentage of the population age 85 or over, according to the Medicare Current Casher Survey. Notwithstanding, the relationship is reversed in the disabled population, where more males are enrolled, reflecting the makeup of the SSDI program population.

Older females are much more likely to be widowed and to live alone than older males due to a number of factors, including females' longer life expectancy, the tendency for females to marry males who are slightly older, and higher remarriage rates for widowed males. Among people historic period 85 or over, well-nigh one-half of the males were still married compared with only 13 percent of the females. (Federal Interagency Forum on Crumbling-Related Statistics, 2000).

The majority of the elderly Medicare population is white (84 percent), black comprise seven percent, Hispanic vi percent, and all other races/ethnicities 3 per centum. Amongst disabled enrollees, 69 percent are white, 17 percent are black, and 11 percent are Hispanic.

The living arrangements of the elderly vary past racial and ethnic group. Older white females are much less likely to live with other relatives than older minority females (15 percent compared with thirty-xl percent) (Federal Interagency Forum on Aging-Related Statistics, 2000). Living alone is a risk cistron for nursing home placement, every bit the elderly grow older.

Over 13 percent, or 4.five million, of the Medicare elderly population is historic period 85 or over. The U.S. Demography Bureau estimates that more than than 70,000 Americans are age 100 or over (U.Southward. Bureau of the Census, 1999).

Economical Status

Although the economic condition of the elderly as a grouping has improved over the past 35 years, most elderly individuals accept modest incomes. Reflecting the income distribution of beneficiaries, the majority of Medicare spending is for beneficiaries with pocket-sized incomes: 33 pct of program spending is on behalf of those with incomes of less than $10,000 (Figure iv).

Medicare Spending for Fee-for-Service Beneficiaries, past Income: 1997

Many elderly Medicare beneficiaries depend upon their Social Security benefits for much of their income. The reliance on Social Security income is greater among unmarried elderly individuals, and increases dramatically as individuals age: Social Security is one-half of the average 85 year old's income. In 1998, Social Security benefits provided about ii-fifths of the income of older persons; nugget income, pensions, and personal earnings each provided about i-fifth of total income (Federal Interagency Forum on Crumbling-Related Statistics, 2000).

About 30 percent of Medicare beneficiaries live lone, and they are disproportionately female person and poor: 72 percent are female, threescore pct have incomes under $xv,000. Nearly xv percentage of those who alive alone are age 85 or over (Figure 5).

Living Arrangements of Medicare Beneficiaries: 1998

Health, Chronic Conditions, and Functional Condition

Virtually 30 pct of the elderly reported that they were in off-white or poor health, compared with 17 percent of those aged 45-64. The percentage reporting off-white or poor health was higher for minority groups and increased with age: Nigh 35 percent of those age 85 or over considered themselves in relatively poor health. (National Centre for Health Statistics, 1999).

Differences in self-reported health status are reflected in Medicare per capita spending. Not surprisingly, the beneficiaries who reported their health status as poor spent five times as much as the beneficiaries reporting excellent health. Medicare per capita spending also increases as functional status declines.

The incidence of chronic conditions among the elderly, divers as prolonged illnesses that are rarely cured completely, varies significantly past age and racial grouping. For instance, almost 1 in 10 of the elderly has diabetes. However, both the incidence of diabetes and the mortality rates from information technology are higher for minority groups: Diabetes is the third leading cause of expiry for elderly American Indians, the quaternary leading crusade of death among elderly black and Hispanic persons, and the sixth leading cause of death for white persons (National Center for Health Statistics, 1999). The bulk of the elderly written report arthritis, which has important implications for the power to care for oneself while living in the customs. Near 1 in 10 of those who need assistance with the tasks of daily living written report arthritis every bit one of the causes of their need for assistance (National Center for Wellness Statistics, 1999). Hypertension and respiratory illnesses each affect about 1 in three of the elderly. Almost 1 in four of the elderly have eye disease (National Center for Health Statistics, 1999).

Nearly 1 in three of the elderly reported limitations with ane or more than activities of daily living (ADLs).¹ About xi percent of the elderly study limitations in instrumental activities of daily living (IADLs).² About thirty percentage of the disabled Medicare beneficiaries had difficulties with 1 or more ADLs (Figure vi).

Distribution of Medicare Enrollees, past Functional Condition: 1998

Medicare Spending

Medicare benefit spending for financial year (FY) 1967 was $3.3 billion and for FY 1999 is estimated at near $212 billion (Effigy 7). The largest shares of spending are for inpatient hospital services (48 percent) and doc services (27 percent) (Figure 8). As medical care has moved to the outpatient setting, these numbers have changed significantly over fourth dimension. For case, inpatient hospital services accounted for a much higher share of spending, 67 percentage, in 1970.

Medicare Spending: Financial Years 1967-1999

Where the Medicare Dollar Went: 1980 and 1998

Medicare Spending per Beneficiary

In FY 1999 Medicare spent an average of $5,410 per casher. The corporeality varies on the basis of eligibility and masks considerable variation across individuals. Like other insurance programs, a small per centum of beneficiaries account for a disproportionate share of Medicare spending. More than than 75 percentage of Medicare'southward payments for elderly and disabled beneficiaries in 1997 were spent on the 15 percent of enrollees who incurred Medicare payments of $10,000 or more. A like distribution of payments has existed for much of the program'south history.

Historical Spending Growth Comparison

Policymakers have often gauged Medicare's success by measuring programme spending confronting the growth in private health insurance (PHI) spending, the source of insurance for the majority of the working population under age 65. Medicare and PHI are the 2 largest sources of payment for health care.

Over the 1969-1998 flow, Medicare and PHI benefits have grown at similar average almanac rates—ten.0 and 11.2 percent respectively (Effigy 9). During selected periods, however, the growth rates have diverged dramatically. Divergence in growth rates is non unusual between the two major health intendance payers. Growth rates take frequently differed, with Medicare alternatively being charged with not "paying its fair share" or "price-shifting" (1985-1991-1997-1998) or with being "unable to control costs" (1993-1997). Private and public sector forces human activity to bring spending growth into balance over the long run.

Charge per unit of Growth in Per Enrollee Medicare and Private Wellness Insurance Spending: 1970-1998

Supplemental Insurance, Access to Intendance, and Out-of-Pocket Spending

While Medicare is a very of import plan for the elderly, its benefit package has not kept upwardly with changes in PHI coverage and consequently is less generous than almost health plans offered today by large employers. Merely well-nigh one-half of the personal health care expenditures of the elderly (non including Medicare Part B or individual supplemental insurance premiums) are paid by Medicare (Figure 10). Total annual wellness care spending, from all sources, averaged $9,340 per Medicare beneficiary in 1997. This total masks considerable variation: For example, total health spending for those who lived in the community averaged $vii,181, compared with $43,131 for those who lived in a facility.

Sources of Payment for Medicare Beneficiaries' Use of Medical Services: 1997

Supplemental Insurance

Medicare has been a life saver with a stroke, two center attacks and removal of 1 kidney. There is no way I could've paid for all of that without the assistance of Medicare and supplemental insurance.

Medicare casher in Richmond, VA. (Wellness Care Financing Administration, 2000.)

Virtually beneficiaries accept other supplemental insurance (east.g., private medigap policies, retiree coverage, or Medicaid) to supplement their Medicare benefits (Effigy 11). About fourteen pct of Medicare beneficiaries have no supplemental coverage; groups almost likely to rely solely on Medicare are the disabled, minorities, and those with low incomes. Supplemental insurance reduces beneficiaries' out-of-pocket expenditures associated with the employ of wellness intendance services including Medicare cost sharing.

Type of Supplemental Wellness Insurance Held, by Medicare Beneficiaries: 1998

The majority (approximately 67 percent) of Medicare's elderly beneficiaries in fee-for-service (FFS) have private supplemental insurance, either through an employer and/or purchased individually. Nigh of the elderly enrolled in managed intendance plans (about 75 percent) do not have whatsoever other type of coverage, in part because managed intendance plans tend to have more than generous benefits, making a medigap policy duplicative.

While Federal law guarantees the availability of supplemental insurance policies to elderly beneficiaries (through a limited 6-month open up enrollment menses upon reaching historic period 65), simply a few States guarantee medigap availability for the Medicare disabled population. This may business relationship in part for the lower levels of medigap coverage for the disabled.

Out-of-Pocket Wellness Care Spending

I'yard thankful for Medicare, but I do have a problem with prescriptions. I have supplemental insurance, but it pays some of information technology only not that much. That's what really gets me. Now, you lot go to the drugstore to go medicine—$80, well…

Female Medicare beneficiary in Richmond, VA (Health Care Financing Assistants, 2000.)

Medicare and other sources of health insurance have covered a growing share of the Nation'due south health spending on the elderly. Before Medicare was enacted, the elderly paid 53 per centum of the cost of their health care; that share dropped to 29 percent in 1975 and 18 percent in 1997 (Social Security Administration, 1976; Wellness Care Financing Assistants, 2000). The elderly's wellness costs consumed 24 percent of the average Social Security bank check shortly before Medicare; by 1975, that share dropped to 17 percentage (Social Security Administration, 1976.)

The elderly spend a higher proportion of their income on health than the general population, both because they have higher health care costs (on boilerplate four times that of the nether age 65 population) and because they have lower incomes. Lower-income elderly spend a higher proportion of their income on wellness than higher-income elderly: Those with incomes beneath $10,000 spent one-quarter of their income on health care, those with incomes above $70,000 spent well-nigh 5 percentage of their income on health care (Figure 12).

Elderly Health Spending as a Per centum of Income: 1998

The vast majority of beneficiary out-of-pocket spending on health care is full-bodied on three services: long- term facility care accounts for the largest share at 44 percent, with outpatient prescription drugs tied with spending on medico and other supplier services at nearly nineteen percent each (Figure 13).

Distribution of Beneficiary Out-of-Pocket¹ Expenses: 1997

¹ Beneficiary out-of-pocket does not include their payment for Medicare Part B premiums, individual insurance premiums, or wellness maintenance system premiums.

Notation: Institutional long-term care services account for the highest share of beneficiary out-of-pocket payments, followed by outpatient prescription drugs, and medico services.

SOURCE: Wellness Care Financing Assistants, Office of Strategic Planning: Data from the Medicare Electric current Beneficiary Survey, 1997.

Vulnerable Populations and Admission to Care

If it was not for Medicare, I could not get to the doctor.

Medicare Beneficiary (Health Intendance Financing Assistants, 1999.)

Sure vulnerable populations historically have experienced problems with admission to care. The groups include the disabled, Medicare beneficiaries who are eligible for Medicaid (dual eligibles), beneficiaries with low incomes, those age 85 or over, minorities, persons living in rural areas, or in areas designated every bit wellness professional shortage areas. A variety of population groups have significantly college rates of hospitalization for "ambulatory intendance sensitive" atmospheric condition. These are medical conditions that are responsive to good and continuous ambulatory intendance, like asthma or diabetes. For instance, black beneficiaries are more 3 times as probable as white beneficiaries to have a lower limb amputated—ofttimes a consequence of diabetes complications; they are more than than 2 times every bit likely as white beneficiaries to be treated for wound infections and pare breakdowns, also associated with poor quality care (Gornick, 2000).

Authoritative Costs

Medicare'southward overall administrative costs are less than ii pct of full do good payments (Figure xiv). Medicare'due south administrative costs are significantly lower than individual insurers, which the Blue Cross/Bluish Shield Association estimates at 12 percent for their plans. Medicare'south administrative costs accept been failing, reflecting greater efficiency through high levels of electronic claims processing.

Medicare Administrative Expenses every bit a Percentage of Benefit Payments: Fiscal Years 1970-1999

In FY 1999 Medicare candy over 850 1000000 claims at a unit cost per claim of $.84 for Role A fiscal intermediaries and $.77 for Part B carriers (Figure fifteen). Cost per Part A claim has declined past l percent in nominal dollars (if the dollars were adapted for inflation, the refuse would be fifty-fifty larger) over the past 10 years, while the number of claims has doubled.

Medicare Role A Cost Per Claim and Number of Claims: Financial Years, 1988-1999

Electronic claims processing is a key reason that the cost per claim has significantly declined (Figure 16). Electronic submission of claims increased from 74 per centum of Office A claims in 1990 to 97 percentage in 1999, Part B rates rose from 36 percent to 80 percentage over the same menstruum.

Percent of Medicare Electronic Claims, by Calendar Years: 1990-1999

Medicare+Choice

The vast majority of Medicare beneficiaries (83 percent) rely on Medicare's traditional FFS benefits, while 15 pct are enrolled in Medicare+Selection plans. By contrast, in the private sector nearly 80 percent of insured individuals receive their coverage through a managed care plan such as a preferred provider system (PPO), indicate-of-service programme, or traditional HMO.

Enrollment in Medicare+Choice

Enrollment in Medicare+Choice, and before that nether the risk HMO plan, increased every twelvemonth since the showtime of the risk plan in 1985. Increases in enrollment accelerated significantly in the late 1990s, though in recent months, growth has tapered off or fifty-fifty declined. By the stop of 1999, 17 percent of Medicare beneficiaries were enrolled in chance HMOs (Figure 17). The tendency in Medicare HMO enrollment is similar to that of the individual sector.

Medicare and Non-Medicare Health Maintenance Organization (HMO) Enrollment Growth: 1990-1999

Access Under Medicare+Choice

HMO interest in Medicare contracting resulted in dramatic increases in the number of contractors in the mid-1990s. The number of risk contracts more than tripled from 1990-1997. Over the decade of the 1990s, the increase in the availability of plans with benefits more generous than FFS Medicare, coupled with increasing medigap premiums, led more Medicare beneficiaries to enroll in HMOs. Today, about 70 pct of Medicare beneficiaries alive in an area with at least one Medicare +Choice plan bachelor. Medicare+Option enrollment is highly concentrated in sure areas of the land and in certain plans.

Medicare+Pick enrollees are less likely to be eligible for both Medicare and Medicaid, and are less likely to be institutionalized. Medicare+Pick enrollees also have better-than-average health and are less likely to be very poor or very wealthy.

Benefits Available to Medicare+Choice Enrollees

Most Medicare+Choice enrollees are provided with extra services not covered past Medicare, such as preventive intendance beyond what Medicare covers and prescription drugs. Some Medicare+Choice plans charge no premium, and in about all cases, Medicare+Choice premiums are significantly lower than medigap premiums for similar benefits.

Medicare Beneficiary Satisfaction

Medicare beneficiaries, whether enrolled in FFS or a Medicare+Pick plan, are by and large well satisfied with their medical care (Effigy 18). Members of Medicare+ Selection plans are somewhat more likely to be satisfied or very satisfied with their out-of-pocket costs than FFS beneficiaries (94 percent versus 87 per centum). About 13 percent of FFS beneficiaries were unsatisfied with their out-of-pocket costs, compared with 6 per centum of Medicare+Choice enrollees. While Medicare+ Option members were slightly more than unhappy about their ability to become answers to their questions by telephone, they found the ease of getting to a doctor and the availability of intendance comparable with that experienced by FFS beneficiaries.

Beneficiary Attitudes Towards Wellness Maintenance Organizations (HMO) and Fee-for-Service (FFS): 1998

Medicare's Role in the Broader Health System

Medicare covers about 14 pct of the population, but because of the all-encompassing health care needs of the elderly and disabled, finances about 21 percent of the Nation's health spending, upward from 11 percent in 1970 (Figure xix). Medicare's share varies significantly by type of service and has changed over time equally Medicare has get a more important source of financing of wellness care. For example, in 1970, Medicare paid for nineteen percent of all hospital spending; by 1998, Medicare's share rose to 32 pct.

National Personal Health Expenditures, past Type of Service and Percent Medicare Paid: 1998

Medicare spending finances treat its beneficiaries and also has important ramifications for the health arrangement as a whole. Special payments for rural, inner-metropolis, and teaching hospitals and other rubber net providers help to guarantee access to intendance for other population groups who live in those areas. Medicare'due south role in quality assurance in hospitals, nursing homes, and other settings helps to assure that all Americans receive loftier-quality health care services from those providers. Medicare plays an important part in educating the Nation's physicians by financing a portion of the costs of graduate medical instruction at instruction hospitals, where much of the country's medical enquiry occurs.

Medicare spending is a growing share of the Federal Government's budget: This year, information technology will business relationship for 12 percent of the budget, compared with ten percent in 1993 and four percent in 1970 (De Lew, 1995).

Acknowledgments

The author is grateful for the help of numerous HCFA staff including: Gerry Adler, Nicole Carey, Frank Eppig, Dave Gibson, Chris Klots, Helen Lazenby, Linda Lebovic, Katharine Levit, Rick McNaney, Solomon Mussey, Andrew Shatto, Sharman Stephens, and Dan Waldo, without whom this article would non have been possible.

Footnotes

The author is with the Office of Strategic Planning, Wellness Intendance Financing Assistants (HCFA). The views expressed in this commodity are those of the author and exercise not necessarily reflect the views of HCFA.

^aneADLs, e.thousand. eating, bathing, toileting.

²IADLs, e.1000. making call, paying bills, shopping.

Reprint Requests: Nancy De Lew, 1000.A., M.A.P.A., Health Care Financing Administration, Room 323H, Hubert H. Humphrey Building, 200 Independence Avenue, SW., Washington, DC. 20201. E-mail: vog.afch@weledn

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Articles from Wellness Intendance Financing Review are provided hither courtesy of Centers for Medicare and Medicaid Services

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Which Of The Following Describes A Federal Program For The Elderly That Covers Hospital Services?,

Source: https://www.ncbi.nlm.nih.gov/pmc/articles/PMC4194690/

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