Public Health Financing For the Masses

Public Financing Categorical programs Medicare (four parts) Medicaid PACE SCHIP Military Health Services TriCare Veterans Health Administration CHAMPVA Indian Health Service

Public Financing Medicare Title XVIII of Social Security Act People contribute through taxes and are entitled regardless of income and assets Federal program consistent across the nation MedPAC established in 1997 (BBA)

Public Financing Medicare Beneficiaries Those 65 years old or older Disabled who are entitled to Social Security benefits Those with end-stage renal disease

Public Financing Medicare – Part A (HI) Financed by mandatory payroll taxes Employer and employee pay equally into the Hospital Insurance Trust Fund Covers inpatient hospital care, skilled nursing facility, home health, and hospice

Public Financing Medicare – Part B (SMI) A voluntary program paid partly by general tax revenue and a premium In 2007, premiums became means-tested (MMA 2003) In 2001, 94% of all Medicare enrollees had SMI Covers various outpatient services

Public Financing Medicare Part C (Medicare Advantage) Created in 1997 as Medicare+Choice Current name adopted under MMA Voluntary enrollment in managed care Does not add any specific benefits, but managed care may provide some extras Medicare Advantage Special Needs Plans are available in some locations

Public Financing Medicare Part D (Prescription Drug Coverage) Created under MMA 2003 Implemented in 2006 Enrollees can choose between Stand-alone plans for prescriptions Part C (all services through managed care) Voluntary enrollment Subsidized premiums See Exhibit 6-3

Public Financing Medicare: Financing and Spending HI Trust Fund Expected to become insolvent in 2018 SMI Trust Fund (Parts B and D) Expected to remain solvent Mounting pressures threaten long-term solvency Medical cost inflation Aging population Shrinking tax base

Public Financing Medicare: Noncovered Services Medicare does not cover Vision, dentures, hearing aids, routine foot care, routine physicals, BUT Certain screenings and vaccinations are covered under Part B Long-term care benefit is limited Medicare covered about 45% of the beneficiaries’ expenses in 2002

Public Financing Medicaid Title XIX of Social Security Act Finances health care for the indigent as determined by each state (means tested) A comprehensive health care program

Public financing Medicaid Automatic eligibility under federal law: TANF recipients SSI recipients Children and pregnant women if income is at or below 133% of FPL “Medically needy” designated by a state Mandatory benefits listed in Exhibit 6-6

Public Financing Medicaid: Financing and Spending Jointly financed by federal and state governments Federal matching (FMAP) is between 50% and 83% of total state costs (average 57%) Recipients Payments Children (48%) 17% Blind/disabled (15%) 44% Elderly (8%) 24%

Public Financing Dually-eligible Beneficiaries Eligible for both Medicare and Medicaid (18% of Medicare enrollees) Two main programs: Qualified Medicare Beneficiary (QMB) Specified Low-income Medicare Beneficiary (SLMB)

Programs Created Under Balanced Budget Act 1997 PACE (Program of All-inclusive Care for the Elderly) Community-based care for 55 years old and older who qualify for nursing home placement Care given in day-care centers, homes, hospitals, nursing homes Teams coordinate all medical and social services All covered Medicare and Medicaid services must be made available

Programs Created Under Balanced Budget Act 1997 SCHIP (State Children’s Health Insurance Program) Title XXI of Social Security Act Additional federal funds to states to expand Medicaid eligibility Available to families with incomes up to: 200% of federal poverty level or $41,300 for family of 4 in 2007 First enroll in Medicaid if qualify

Military Health Services System (MHSS) U.S. Department of Defense Health care for active duty and retirees, their dependents and survivors 8.9 million eligible in 2005 MHSS operates 75 hospitals and 461 clinics mainly for active duty personnel Dependents and retirees can enroll in TriCare

Military Health Services System TriCare Regionally managed (11 US regions + Europe, Latin America, and Pacific) Structured after managed care Use of MHSS staff and facilities + civilian health care services Three plan options: TriCare Prime TriCare Extra TriCare Standard TriCare for Life (TFL) for elderly beneficiaries

Department of Veteran Administration (VA) Veterans Health Administration (VHA) The largest integrated health service system in the US Both services connected and other conditions are treated on a priority basis Cost control through global budgets VHA gives a window into what a national health care system may look like: Strained capacity to meet high demand

Indian Health Service Indian Health Service Federal program (IHS) Comprehensive care to Native Americans living on reservations and in rural areas IHS operates its own hospitals, health centers, and health stations

Miscellaneous Private and Public Programs Medigap (Private) Medicare covers less than half of beneficiaries’ costs Some options to cover remaining costs: Medicaid (if dually eligible) Part C can offer some additional benefits Retiree benefits from past employer Purchase private policies (Medigap) Only standardized plans can be sold

Miscellaneous Private and Public Programs Workers Compensation Separate from regular health insurance Covers job accidents and/or injuries Employer responsible regardless of who is at fault State-administered program, fully financed by employers Private, state fund, or self-insurance

Miscellaneous Private and Public Programs Workers Compensation 4 categories of benefits: Cash payment for lost wages Payment for medical treatment Indemnification for loss of occupational capacity and skills Survivors’ death benefit

On to Assignment 7!

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