1. Public Health Financing
For the Masses

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

3. 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)

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

5. 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

6. 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

7. 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

8. 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

9. 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

10. 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

11. 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

12. 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

13. 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%

14. 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)

15. 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

16. 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

17. 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

18. 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

19. 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

20. 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

21. 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

22. 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

23. 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

24. On to Assignment 7!

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