Medicare

Medicare is a government health insurance program which provides coverage to people at least 65 years of age or those that meet other special criteria. Two of these special criteria are disability and end stage renal disease [1]. If disabled and under 65 years old, a person must have been receiving disability benefits from Social Security or the Railroad Retirement Board for at least 24 months before automatic enrollment in Medicare can take place.

There are two main parts to the original Medicare program known as Part A and Part B. Recently, Part C and Part D were developed as well [2].

Part A: Hospital Insurance

Part A helps to pay for inpatient care in hospitals, critical access hospitals (designed for rural areas), skilled nursing facilities not including custodial or long-term care, hospice care, and some home health care [1].

Most people are automatically entitled to Part A upon turning 65 years old. Since either they or their spouse paid Medicare taxes during the time that they were employed, the monthly premium is waived. Even if a person is not automatically granted it, they may be able to buy it if one of the two criteria are fulfilled:

1. They (or their spouse) are older than 65 years and are not entitled to Social Security due to not working or paying enough Medicare taxes while they worked, OR

2. They are disabled but have returned to work and thus no longer get Part A without a premium [1].

Part B: Medical Insurance

Part B only helps to pay for medically necessary doctors' services, outpatient care, and other medical services which Part A doesn't cover. Additionally, Part B also is able to cover some preventive services [1].

Enrolling in Part B is up to the individual. People are eligible to sign up for Part B anytime from from three months before they turn 65 to three months after they turn 65. The premium people pay for Part B is now based on income. The standard monthly Part B premium in 2007 is $93.50; however, a person may pay more if he did not choose Part B when he first became eligible. The cost of Part B has the potential to increase by 10% for every full 12-month period that a person could have had Part B but chose not to sign up for it. While generally true, there are exceptions to this rule. It is possible that a person is forced to pay this penalty as long as he keeps Part B [1].

Part C: Medicare Advantage Plans

Medicare beneficiaries have the option to receive their Medicare benefits through private health insurance plans (as opposed to Medicare Parts A and B) as a result of the Balanced Budget Act of 1997. Those choosing to do this are participating in Medicare+Choice (Part C) plans. Due to the Medicare Prescription Drug, Improvement, and Modernization Act of 2003 which resulted in compensation and business practices for insurers that offer these plans undergoing change, Medicare+Choice plans became known as Medicare Advantage (MA) plans. MA plans offer comparable coverage to Part A and Part B, and they also may offer Part D coverage as well [2].

Part D: Prescription Drug Plans

Beginning January 1, 2006, Medicare Part D went into effect and was made available to anyone with Part A or B [2]. However, to be entitled to the benefits of Part D, a person with Medicare have to enroll in one of many hundreds of Prescription Drug or Medicare Advantage Plans which features prescription drug coverage [3]. While Medicare approves and regulated these plans, private health insurance companies design and administer them. Part D sets itself apart from Part A and Part B in the fact that coverage is not standardized. Each individual plan may choose the drugs they wish to cover, the level they wish to cover it, and may elect to not cover some drugs at all. Medicare does require that the following drugs be excluded from all coverages: benzodiazepines, cough suppressants and barbiturates. If a plan does cover any excluded drug, the costs may not be passed to Medicare, and the plans are required to repay the Centers for Medicare and Medicaid Services if it is discovered that Medicare was billed [2].

Medicaid

Medicaid is a government health insurance program which provides medical care mainly to the poor, to children and to pregnant women living under the federal poverty level [4]. Others eligible for Medicaid include the following: Supplemental Security Income recipients, adopted or foster children, specially protected groups, children under age 19 whose family income is below federal poverty level, and some Medicare beneficiaries and other groups on a state to state basis. States and the federal government both contribute to the funding of Medicaid. States may provide up to half the funding while counties have also been known to contribute to the Medicaid program as well. In addition to helping fund the program, Medicaid is managed by the states as well [5].

Medicaid covers a broader range of health care than Medicare. Included coverages of Medicaid are as follows: hospital and doctor's visits, prenatal care, emergency room visits, drugs, and other treatments [5]. A social worker is assigned to most families which receive Medicaid benefits. The social worker usually advises the family on its eligibility, and a number of doctors are qualified to inform their patients about the specifics of the Medicaid program [4].

Veterans Affairs

The United States Department of Veterans Affairs is a single payer health care system which is run by the U.S. government. The department deals with veterans benefits for veterans, their families, and their survivors. The VA maintains a budget of more than $60 billion making it the second largest department on the federal government level behind the Department of Defense [6].

Those who have active military service in the Army, Navy, Air Force, Marines, or Coast Guard (or Merchant Marines during WW II), or were discharged from those groups under anything other than dishonorable conditions are eligible for VA health care benefits. Enrollment in the VA program enables traveling veterans or veterans away from their primary treatment facility to obtain care at any VA health care facility across America without reapplying for benefits [7].

Standard benefits associated with VA medical benefits packages include preventive care services, ambulatory diagnostic and treatment services, hospital diagnostic and treatment, and medication and supplies [8]. In addition to this, VA offers a plethora of clinical programs and initiatives dealing with the following topics: Agent Orange Health Effects, Blind Rehabilitation Services, Cancer Program, Cardiac Surgery, Center for Women Veterans, Cold Injury, Diabetes Program, Gulf War Veterans Health, HIV/AIDS Program, Kidney Diseases Program, Mental Health, Mental Illness, Post Traumatic Stress Disorder, Nursing, Recreational Therapy, Social Work, and War Related Injury and Illness [9].

Military Medicine

A majority of military medicine is overseen by the Association of Military Surgeons of the United States (AMSUS). While originally a membership organization for surgeons and physicians. AMSUS is currently comprised of professionals who serve in the health care disciplines in the following branches of the U.S. Defense Department: US Army, US Navy, US Air Force, US Public Health Service, Department of Veterans Affairs, US Army Reserve, US Navy Reserve, US Air Force Reserve, Army National Guard, Air National Guard, and the Coast Guard.

AMSUS is committed to following four statements:
1. Improve the effectiveness, cohesiveness and esprit de corps of the federal health care services.
2. Improve health care by providing a forum for discussion of ideas and problems whether on a local, national, or international level and by providing continuing education for its members.
3. Contribute to the improvement of health care in the nation through policy study and recommendations.
4. Represent the Association to the Executive and Legislative Branches, to national professional organizations and to the public [10].

Donut Holes

Donut holes deal with Medicare Part D. A donut hole is where the enrollee in the Medicare program is forced to pay 100% of the cost of prescription drugs. In 2006, the donut hole started when total annual spending for drugs reached $2,250 and concludes when total annual spending for drugs was greater than $5,100 [11].

In the following chart, the donut hole can be seen on the third row down.
Total Drug Spend
TrOOP
Out of Pocket Cost
Portion Covered by Medicare
$0-$250
$0-$250
Deductible is out-of-pocket
No Medicare Coverage of Costs
$250-$2,250
$250-$750
25% out-of-pocket
75% Covered by Medicare
$2,250-5,100
$750-$3600
All costs are out-of-pocket
No Medicare Coverage of Costs
over $5,100
over $3600
5% out-of-pocket
95% Covered by Medicare
Source: en.wikipedia.org/wiki/Donut_Hole_%28Medicare%29

Those in favor of the donut hole claim that it helps all beneficiaries and provides substantial help to those with astronomically high drug costs. At the same time, it does not cause the federal program, which is expected to cost hundreds of billions of dollars over the next ten years, to go bankrupt. Opponents of it say that it forces citizens with having to make the decision to stop taking the prescription drugs or pay upwards of thousands of dollars for it out of pocket. Cheaper solutions offered by experts to these groups of people include mail-order pharmacies, comparison shopping, and purchasing the drugs from Canada [12].

Sample Problems

1) Which of the following would be most likely to partake in the Medicare program?
a. A 70 year old retired grandfather
b. A 25 year old mother of four children
c. A 45 year old CEO of a Fortune 500 Company
d. All of the above

2) Which of the following governments manages the Medicaid program?
a. State
b. Federal
c. State and federal
d. Neither state nor federal

3) What percent of total cost of prescription drugs does Medicare pay in the "donut hole" range?
a. 25%
b. 50%
c. 75%
d. 0%

4) Other than the Department of Defense, what is the largest department in the U.S. Government?
a. Department of Labor
b. Department of Veterans Affairs
c. Department of Education
d. Department of State

5) Which of the following would not be covered by Medicare Part A?
a. Critical access hospitals
b. Hospice care
c. Inpatient care in hospitals
d. Outpatient care

Sample Answers

1) a. A 70 year old retired grandfather. Medicare is traditionally designed for those 65 years and older.
2) a. State. State governments are in charge of managing the Medicaid program.
3) d. 0%. Medicare does not cover any of the costs for prescription drugs in the donut hole.
4) b. Department of Veterans Affairs. The DVA has a annual budget of over $60 billion.
5) d. Outpatient care. Outpatient care is covered by Part B, not Part A of Medicare.

Sources

[1] medicare.gov
[2] en.wikipedia.org/wiki/Medicare_Part_D
[3] medicareadvocacy.org/FAQ_PartD_Info.htm#whatIsD
[4] wisegeek.com/what-is-medicaid.htm
[5] en.wikipedia.org/wiki/Medicaid
[6] en.wikipedia.org/wiki/United_States_Department_of_Veterans_Affairs
[7] va.gov/healtheligibility
[8] va.gov/healtheligibility/coveredservices/StandardBenefits.asp
[9] www1.va.gov/health/clinical.html
[10] amsus.org/home.shtml
[11] en.wikipedia.org/wiki/Donut_Hole_%28Medicare%29
[12] washingtonpost.com/wp-dyn/content/article/2006/09/24/AR2006092400957.html


Written by Eric Maroun