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Medicare and Medicaid
An Overview
Medicare and Medicaid
• Government funded health programs for
United States citizens who would be
otherwise uninsured
• Created in July 1965 as part of President
Lyndon Johnson’s “Great Society” reforms
• Programs have expanded to cover gaps in
the private insurance system
• Account for approximately $800 billion in
federal spending per year
www.kff.org/medicaid/upload/7334-04.pdf
www.kff.org/medicare/upload/7615-03.pdf
Comparative overview
Medicare Medicaid
For those 65 and over or those with
certain disabilities
For citizens below a certain income
threshold or those with certain disabilities
Financed through social security taxes and
beneficiary premiums
Funded in cooperation between state and
federal governments
Coverage benefits depend on which
program one is enrolled in, prescription
drug costs are not covered by basic
Medicare
Many coverage benefits are federally
mandated, but some (including
prescription drug benefits) are determined
by state
www.nls/prg/conf/medicare-medicaid.htm
Medicare
What is Medicare?
• A government funded health insurance program for people age 65 or
older and people under 65 with certain disabilities or end-stage renal
disease
• Citizens are immediately eligible for Medicare when they reach age 65
if payroll taxes were contributed to Medicare throughout their working
life
• Covers approximately 45 million Americans
• On average, half of enrollees’ health care costs are covered by
Medicare
www.kff.org/medicare/upload/7615-03.pdf
What does Medicare cover?
Medicare Part A Covers
• Inpatient care in hospitals
• Inpatient care in nursing facilities
• Hospice care
• Some home health care
Medicare Part B Covers
• Outpatient care
• Physical and occupational therapy
• Doctor’s services
• Drugs incident to a physicians visit
Medicare Part C Covers Medicare Part D Covers
• Access to a plan from a private
health insurance program approved
by Medicare (Medicare Advantage
Program)
• Prescription drug costs (offered on
a state-by-state basis, must enroll
in Medicare advantage plan)
www.ssa.gov/pgm/medicare.htm
www.kff.org/medicare/upload/7615-03.pdf
*Medicare is divided into 4 parts
Summary of government payers
• Elderly
• Disabled
• Poor
• Young
• Some
disabilities
• If you are
elderly or
disabled and
poor or young
Medicare Medicaid Duel eligible
How is Medicare financed?
Part A Funded through a tax on the earnings of employers and their employees
Part BFunded by government revenues and premiums from higher-income
beneficiaries
Part C Under Parts A, B, and D, and is therefore not funded separately
Part DFunded through government revenues and premiums from higher income
beneficiaries
www.nls.org/conf/medicare-medicaid.htm
www.kff.org/medicare/upload/7615-03.pdf
Medicaid
What is Medicaid?
• A health insurance program operated by the state for low-income
citizens, those with physical or mental disabilities, and seniors
• Covers approximately 60 million Americans including more than 1 in 4
children
– Covers more people than any other private or public insurance program
– Largest provider of coverage for long-term care; covers the majority of nursing home
residents
• Enrollment
– Greatly increased since the recent economic downturn
– Grows at an average annual rate of 4.2%
www.kff.org/medicaid/upload/7334-04.pdf
www.medicaid.gov
What does Medicaid cover?
Federally Mandated Services
• Hospital services
• Physician’s services
• Family planning services
• Screening and x-ray services
• Nursing home facilities
• Some home health care
• Transportation and translation
services
State Optional Services
• Prescription drugs
• Dental and vision services
• Rehabilitation and physical therapy
• Hospice services
• Inpatient psychiatric services
www.healthcare.gov/using-insurance/low-cost-care/medicaid#cover
www.kff.org/medicaid/upload/7334-04.pdf
How is Medicaid financed?
• Funded through a partnership between state and Federal governments
• Federal government matches state Medicaid spending
– The amount of funds matched depends on the state’s per capita income, with poorer
states receiving more federal money
www.nls.org/conf/medicare-medicaid.htm
www.kff.org/medicaid/upload/7334-04.pdf
Medicare, Medicaid, and Health
Care Reform
Effects of Reform on Medicare
• Coverage gap in Medicare Part D will be eliminated to ensure
enrollees have access to affordable prescription drugs
• Cost sharing for preventative care and screenings will be eliminated
• Funding to reduce Medicare fraud will be increased
• National standards of quality and safety will be established to improve
overall care
• Long-term care will be more affordable
• Life of the Medicare Trust Fund will be extended to reduce chance of
bankruptcy
www.healthreform.gov/reports/medicare/medicare.pdf
Effects of reform on Medicaid
• Eligibility to qualify for Medicaid will be expanded to include a
substantially larger group of low-income citizens on a state-by-state
basis
– Federal government will pay all costs of the expansion beginning in 2014
– To accommodate the expansion, enrollment will be simplified and quality of care
available under Medicaid will be improved
www.cnn.com/2102/07/05/opinion/carroll-mediciad-expansion/index.html
Works referenced
• http://www.ssa.gov/pgm/medicare.htm
• http://www.healthreform.gov/reports/medicare/medicare.pdf
• http://www.healthcare.gov/using-insurance/low-cost-care/medicaid
• http://www.cnn.com/2012/07/05/opinion/carroll-medicaid-
expansion/index.html
• http://www.kff.org/medicaid/upload/7334-04.pdf
• http://www.kff.org/medicare/upload/7615-03.pdf
• http://www.nls.org/conf/medicare-medicaid.htm
www.cnn.com/2102/07/05/opinion/carroll-mediciad-expansion/index.html
