In this Managed Markets Monday segment, we take a deep dive into the differences between Medicare, Medicaid and the impact on both from Health Care Reform.

1. Medicare and Medicaid
An Overview

2. 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

3. Comparative overview
Medicare Medicaid
For those 65 and over or those with For citizens below a certain income
certain disabilities threshold or those with certain disabilities
Financed through social security taxes and Funded in cooperation between state and
beneficiary premiums federal governments
Coverage benefits depend on which Many coverage benefits are federally
program one is enrolled in, prescription mandated, but some (including
drug costs are not covered by basic prescription drug benefits) are determined
Medicare by state
www.nls/prg/conf/medicare-medicaid.htm

4. Medicare

5. 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

6. What does Medicare cover?
*Medicare is divided into 4 parts
Medicare Part A Covers Medicare Part B Covers
• Inpatient care in hospitals • Outpatient care
• Inpatient care in nursing facilities • Physical and occupational therapy
• Hospice care • Doctor’s services
• Some home health care • Drugs incident to a physicians visit
Medicare Part C Covers Medicare Part D Covers
• Access to a plan from a private • Prescription drug costs (offered on
health insurance program approved a state-by-state basis, must enroll
by Medicare (Medicare Advantage in Medicare advantage plan)
Program)
www.ssa.gov/pgm/medicare.htm
www.kff.org/medicare/upload/7615-03.pdf

7. Summary of government payers
Medicare Medicaid Duel eligible
• Elderly • Poor
• If you are
• Disabled • Young
elderly or
• Some
disabled and
disabilities
poor or young

8. How is Medicare financed?
Part A Funded through a tax on the earnings of employers and their employees
Funded by government revenues and premiums from higher-income
Part B
beneficiaries
Part C Under Parts A, B, and D, and is therefore not funded separately
Funded through government revenues and premiums from higher income
Part D
beneficiaries
www.nls.org/conf/medicare-medicaid.htm
www.kff.org/medicare/upload/7615-03.pdf

9. Medicaid

10. 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

11. What does Medicaid cover?
Federally Mandated Services State Optional Services
• Hospital services • Prescription drugs
• Physician’s services • Dental and vision services
• Family planning services • Rehabilitation and physical therapy
• Screening and x-ray services • Hospice services
• Nursing home facilities • Inpatient psychiatric services
• Some home health care
• Transportation and translation
services
www.healthcare.gov/using-insurance/low-cost-care/medicaid#cover
www.kff.org/medicaid/upload/7334-04.pdf

12. 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

13. Medicare, Medicaid, and Health
Care Reform

14. 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

15. 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

16. 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