Post on 14-Jan-2016
description
transcript
Social Insurance
Medicaid and Medicare
Introduction
• No longer will older Americans be denied the healing miracle of modern medicine. No longer will illness crush and destroy the savings that they have so carefully put away over a lifetime so that they might enjoy dignity in their later years. No longer will young families see their own incomes, and their own hopes, eaten away simply because they are carrying out their deep moral obligations to their parents, and to their uncles, and their aunts. ~President Lyndon Johnson
Medicaid
• Social Insurance for the poor
Other Social Insurance Programs
• State Children’s Health Insurance Program (SCHIP)
• Veterans Administration
Crowding Out
• When private insurance take up falls after introduction of increases in public benefits.
• Concerns over public option.
HHS Estimates of Low-Income Subsidy Eligibility and Participation Under the Medicare Drug Benefit, 2008
Total Eligible for Low-Income Subsidies = 12.5 million
Applied for and receiving subsidy
Eligible but estimated to have
other drug coverage
1.5 million 12%
NOTES: MSP is Medicare Savings Program; SSI is Supplemental Security Income. SOURCE: Kaiser Family Foundation, based on HHS data, January 31, 2008 ( Data as of January 2008).
Eligible but not receiving subsidy
2.6 million 21%
Full dual eligibles
automatically receiving subsidy
6.2 million 49%
Future anticipated facilitated
enrollment <0.1 million (0.5%)
MSP and SSI recipients automatically receiving
subsidy
1.7 million 13%
.5 million 4%
Medicaid Today
Health Insurance Coverage
29 million children & 15 million adults in low-income families; 14 million elderly and
persons with disabilities
State Capacity for Health Coverage
43% of federal funds to states
MEDICAID
Support for Health Care System and Safety-net
16% of national spending on health services and supplies
Assistance to Medicare
Beneficiaries
7.5 million aged and disabled — 19% of
Medicare beneficiaries
Long-Term Care Assistance
1 million nursing home residents; 41% of long-
term care services
Source: Kaiser Commission on Medicaid and the Uninsured, 2008
Medicaid’s Role for Selected Populations
65%
44%
20%
51%
23%
41%
40%
27%
20%
19%
Nursing Home Residents
People Living with HIV/ AIDS
People with Severe Disabilities
Medicare Beneficiaries
Births (Pregnant Women)
Low-Income Adults
Low-Income Children
All Children
Near Poor
Poor
Note: “Poor” is defined as living below the federal poverty level, which was $17,600 for a family of 3 in 2008. SOURCE: Kaiser Commission on Medicaid and the Uninsured, Kaiser Family Foundation, and Urban Institute estimates; Birth data: NGA, MCH Update.
Percent with Medicaid Coverage:
Families
Aged & Disabled
Medicaid Enrollees and Expendituresby Enrollment Group, 2005
Enrollees Expenditures onbenefits
Children 18%
Elderly28%
Disabled42%
Adults 12%
Children50%
Elderly10%
Disabled14%
Adults26%
Total = 59 million Total = $275 billion
SOURCE: Kaiser Commission on Medicaid and the Uninsured and Urban Institute estimates based on 2005 MSIS data.
Medicaid Payments Per Enrolleeby Acute and Long-Term Care, 2005
Children Adults Disabled Elderly
Long-Term Care
AcuteCare
$1,617$2,102
$13,524
$11,839
SOURCE: Kaiser Commission on Medicaid and the Uninsured and Urban Institute estimates based on 2005 MSIS data.
Medicaid Enrollment Growth Average Annual Growth Rates, 2000-2006
2.6%
11.4%
2.9%
5.7%
3.3% 3.2%
-0.4%
2.0%
2000-2002 2002-2004 2004-2005 2005-2006
Aged/Disabled Families
SOURCE: Kaiser Commission on Medicaid and the Uninsured and Urban Institute estimates based on KCMU Medicaid enrollment data collected by Health Management Associates from 44 states inflated proportionally to national totals, 2007.
Overall Average Annual Total Medicaid Spending Growth, 2000-2006
11.9%
4.0%
7.2%6.5%
-0.2%
NOTE: Adjusted expenditures exclude all prescription drug spending for dual eligibles to remove the effect of their transition to Medicare Part D in 2006.SOURCE: Kaiser Commission on Medicaid and the Uninsured and Urban Institute, 2007; estimates based on data from HCFA Financial Management Reports, 2006 (HCFA-64/CMS-64).
$295.9Annual Spendingat End of Period(billions)
‘02-’04
$315.0
‘05-’06
$257.3
‘00-’02 ‘04-’05Adjuste
d ‘05-’06
$314.5 $310.8
Medicaid and SCHIP Enrollment of Children, 1998-2005
20.7 20.9 21.823.4
25.527.3 27.8 28.3
.72.0
3.44.6 5.4 6.0 6.1 6.1
1998 1999 2000 2001 2002 2003 2004 2005
Medicaid SCHIP
SOURCE: Kaiser Commission on Medicaid and the Uninsured and Urban Institute analysis of HCFA-2082, MSIS, and SEDS data, 2007.
Millions of Children
Income and Health Status of Medicaid and the Low-Income Privately Insured, 2002
61%
48%49%
16% 15%
27%
0%
25%
50%
75%
100%
Percent of Enrolled Adults:
Poor Health Conditions that
limit work
Fair or Poor Health
SOURCE: Coughlin et. al, “Assessing Access to Care Under Medicaid: Evidence for the National and Thirteen States,” Health Affairs 24(4):1073-1083. Based on a 2002 NSAF analysis for Kaiser Commission on Medicaid and the Uninsured.
Medicaid Low-Income andPrivately Insured
Concentration of Health Spending in the Medicaid Population, 2001
Enrollees Expenditures
SOURCE: Kaiser Commission on Medicaid and the Uninsured/Urban Institute estimates based on MSIS 2001 data.
Adults 1%
Disabled 25%
Total = 46.9 million
Total = $180.0 billion
Elderly 20%
<$25,000 in Costs
96%
Children 3%
<$25,000 in Costs
52%
>$25,000 in Costs• Children (.2%)• Adults (.1%)• Disabled (1.6%)• Elderly (1.8%)
>$25,000 in
Costs
Medicaid Expenditures by Service, 2006
Total = $304.0 billionNOTE: Total may not add to 100% due to rounding. Excludes administrative spending, adjustments and payments to the territories.SOURCE: Urban Institute estimates based on data from CMS (Form 64), prepared for the Kaiser Commission on Medicaid and the Uninsured.
Inpatient 14.1%
Physician/ Lab/ X-ray 3.8%
Outpatient/Clinic 6.8%
Drugs5.5%
Other Acute6.9%
Payments to MCOs 18.0%
Nursing Facilities
15.7%
ICF/MR4.3%
Mental Health1.0%
Home Health and Personal Care
14.8%
Payments to Medicare 3.3%
DSH Payments
5.6%
AcuteCare
58.5%
Long-TermCare
35.8%
Medicaid in the Health System, 2006
16% 17%
43%
9%13%
Total HealthServices and
Supplies
HospitalCare
ProfessionalServices
NursingHome Care
PrescriptionDrugs
NOTE: Does not include spending on SCHIPSOURCE: Kaiser Commission on Medicaid and the Uninsured, based on A Catlin et al, “National Health Spending in 2006: A Year of Change for Prescription Drugs,” Health Affairs 27(1)14-29, January/February 2008. Based on National Health Care Expenditure Data, CMS, Office of the Actuary.
Total National Spending(billions)
$2,106
$648 $660 $125
$217
Medicaid as a share of national health care spending:
Medicaid Financing of Safety-Net Providers
Medicare20%
State/ Local Subsidies
14%
Self Pay/ Other7%
Commerical
24%
Medicaid35%
Total = $29 billion
SOURCE: Kaiser Commission on Medicaid and the Uninsured, based on America’s Public Hospitals and Health Systems, 2004, National Association of Public Hospitals and Health Systems, October 2006. KCMU Analysis of 2006 UDS Data from HRSA.
Federal Grants22%
Self Pay7%
State/ Local13%
Private7%
Medicare6%
Medicaid37%
Other9%
Total = $8.1 billion
Public Hospital Net Revenues by Payer, 2004
Health Center Revenues
by Payer, 2006
National Spending on Nursing Home and Home Health Care, 2006
Medicare17%
Private Insurance
7%
Other 6%
Medicaid43%
Out-of-Pocket26%
Total = $124.9 billionNote: Medicaid percentage includes spending through SCHIP. Other includes private and public funds SOURCE: Kaiser Commission on Medicaid and the Uninsured, based on Health Affairs January/February 2008, CMS, National Health Accounts.
Out-of-Pocket11%
Other* 6%Private
Insurance11%
Medicare38%
Medicaid34%
Total = $52.7 billion
Nursing Home Care Home Health Care
Growth in Medicaid Long-Term Care Expenditures, 1990-2006
1990 1995 2000 2002 2004 2006
Home andCommunity-Based
Institutional Care
In Billions:
$32
$54
$75
87%80%
70%13%
20%
30%
32%
68%
$92$100
63%
37%
$109
41%
59%
Note: Home and community-based care includes home health, personal care services and home and community-based service waivers.SOURCE: Kaiser Commission on Medicaid and the Uninsured and Urban Institute analysis of HCFA/CMS-64 data.
Source: Stan Dorn, Bowen Garrett, John Holahan, and Aimee Williams, Medicaid, SCHIP and Economic Downturn: Policy Challenges and Policy Responses, prepared for the Kaiser Commission on Medicaid and the Uninsured, April 2008
Impact of Unemployment Growth on Medicaid and SCHIP and the Number Uninsured
1%
Increase in National Unemployment
Rate
=1.0 1.1
Increase in Medicaid
and SCHIP Enrollment
(million)
Increase in Uninsured(million)
&$2.0
$1.4
$3.4
Increase in Medicaid and
SCHIP Spending(billion)
State
Federal
State Authorized Children’s Eligibility for Medicaid/SCHIP by Income, January 2008
AZAR
MS
LA
WA
MN
ND
WY
ID
UTCO
OR
NV
CA
MT
IA
WIMI
NE
SD
ME
MOKS
OHIN
NY
IL
KY
TNNC
NH
MA
VT
PA
VAWV
CTNJ
DE
MD
RI
HI
DC
AK
SCNM
OK
GA
*The Federal Poverty Line (FPL) for a family of three in 2007 is $17,170 per year.**Effective eligibility higher than 250% FPL accounts for earnings disregards. ***IL uses state funds to cover children above 200% FPL.SOURCE: Based on a national survey conducted by the Center on Budget and Policy Priorities for the Kaiser Commission on Medicaid and the Uninsured., 2008.
TX
IL
FL
AL
< 200% FPL (6 states)
Effective >250% FPL (23 states)
200-250% FPL (22 states)
Authorized Medicaid Eligibility for Working Parents by Income, January 2008
AZAR
MS
LA
WA
MN
ND
WY
ID
UTCO
OR
NV
CA
MT
IA
WIMI
NE
SD
ME
MOKS
OHIN
NY
IL
KY
TNNC
NH
MA
VT
PA
VAWV
CTNJ
DE
MD
RI
HI
DC
AK
SCNM
OK
GA
NOTE: The Federal Poverty Line (FPL) for a family of three in 2008 is $17,600 per year. AR, IN, & UT operate waivers allowing higher-income parents to enroll, but the coverage has higher cost-sharing and reduced benefits.SOURCE: Based on a national survey conducted by the Center on Budget and Policy Priorities for the Kaiser Commission on Medicaid and the Uninsured, 2008.
TX
IL
FL
AL
50% - 99% FPL (21 states)< 50% FPL (12 states)
100% or higher FPL (18 states including DC)US Median Eligibility = 63% FPL
Nearly Two-Thirds of States Expanded Access to Medicaid and
SCHIP, July 06 – January 08
SOURCE: Based on a national survey conducted by the Center on Budget and Policy Priorities for the Kaiser Commission on Medicaid and the Uninsured, 2008.
32
26
11
7
Total EligibilityIncreases
EnrollmentProcedure
Simplifications
ReducedChildren'sPremiums
Number of States With…
Community Hospital Payment-to-Cost Ratios, by Source of Revenue, 1980-2006
Note: Payment-to-cost ratios show the degree to which payments from each payer cover the costs of treating its patients. They cannot be used to compare payment levels across payers, however, because the service mix and intensity vary. Data are for community hospitals. Medicaid includes Medicaid Disproportionate Share payments.
Source: American Hospital Association and Avalere Health, Avalere Health analysis of 2006 American Hospital Association Annual Survey data, for community hospitals, Trendwatch Chartbook 2008, Trends Affecting Hospitals and Health Systems, April 2008, Table 4.4, p. A-35, at http://www.aha.org/aha/trendwatch/chartbook/2008/08appendix4.pdf.
70%
80%
90%
100%
110%
120%
130%
140%
1980 1982 1984 1986 1988 1990 1992 1994 1996 1998 2000 2002 2004 2006
Private Payers
Medicare
Medicaid
Medicaid Managed Care and Traditional Enrollment, 1990-2004
2.3 2.7 3.6 4.8 7.8 9.813.3 15.3 16.6 17.8 18.8 20.8 23.1 25.3 26.923.0
25.627.3
28.625.8 23.6
19.9 16.7 14.3 14.2 14.915.8
17.017.5 17.4
0
5
10
15
20
25
30
35
40
45
50
1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004
Number Enrolled in Traditional Medicaid Programs
Number Enrolled in Medicaid Managed Care
Note: Numbers may not produce totals because of rounding. These figures represent point-in-time enrollment as of June 30 of each reporting year. Total Medicaid enrollment for 1996-2004 was collected by states at the same time the managed care enrollment numbers were collected, instead of using the CMS 2082 Medicaid data reporting system as in previous years. The unduplicated managed care enrollment data include enrollees receiving comprehensive benefits and limited benefits. This table also provides unduplicated national figures for the Total Medicaid population and Other population. The statistics also include individuals enrolled in State health care reform programs that expand eligibility beyond traditional Medicaid eligibility standards.
Source: Kaiser Family Foundation, Trends and Indicators in the Changing Health Care Marketplace, 2002, May 2002, Exhibit 2.8, p.23, at http://www.kff.org/insurance/3161-index.cfm, using and updated with data from the Centers for Medicare and Medicaid Services, at http://new.cms.hhs.gov/MedicaidDataSourcesGenInfo/04_MdManCrEnrllRep.asp.
Enrollment (in millions)
25.3
28.3
30.9
33.4
33.6
33.4
33.2
32.1
30.9
31.9
33.7
36.6
40.1
42.7
44.4
Enrollment in Medicare Managed Care and Traditional Medicare, 1990-2005
Source: Kaiser Family Foundation calculations using CCP enrollment data from the Centers for Medicare and Medicaid Services' monthly Medicare Managed Care Contract Reports for December 1 of each year, at http://www.cms.hhs.gov/HealthPlanRepFileData/04_Monthly.asp#TopOfPage (Zipped Monthly Summary (MMCC) Text Report, CCP plans), and total Medicare enrollment data from the 2006 Annual Report of the Boards of Trustees of the Federal Hospital Insurance and Federal Supplementary Medical Insurance Trust Funds, May 1, 2006, Table III.A3, p. 34, at http://www.cms.hhs.gov/ReportsTrustFunds/downloads/tr2006.pdf
1.3 1.4 1.6 1.8 2.3 3.1 4.1 5.2 6.1 6.3 6.3 5.5 4.9 4.6 4.7 5.2
33.0 33.5 34.0 34.5 34.7 34.5 34.0 33.3 32.8 32.9 33.4 34.6 35.6 36.6 37.2 37.3
0
5
10
15
20
25
30
35
40
45
1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005
Number Enrolled in Traditional Medicare Program
Number Enrolled in Medicare Managed Care
Enrollment (in millions)
34.3
34.9
35.6
36.3
37.0
37.6
38.1
38.5
38.9
39.2
39.7
40.1
40.5
41.2
41.9
42.5
Note: Total Medicare enrollment includes beneficiaries with HI and/or SMI coverage. Medicare managed care enrollment is enrollment in what Medicare calls CCPs (Coordinated Care Plans), which include health maintenance organizations (HMOs), provider-sponsored organizations (PSOs), and preferred provider organizations (PPOs).
0%
5%
10%
15%
20%
25%
1970
1971
1972
1973
1974
1975
1976
1977
1978
1979
1980
1981
1982
1983
1984
1985
1986
1987
1988
1989
1990
1991
1992
1993
1994
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
Medicare
Private Health Insurance Premiums
Per Enrollee Growth in Medicare Spending and Private Health Insurance Premiums (for
Common Benefits), 1970-2006
Notes: Per enrollee includes primary policy-holder plus dependents. Common benefits include hospital services, physician and clinical services, other professional services, and durable medical products; they exclude, for example, prescription drugs, home health care, non-durable medical products, and nursing home care.
Source: Centers for Medicare and Medicaid Services, Office of the Actuary, National Health Statistics Group, Table 13, at http://www.cms.hhs.gov/NationalHealthExpendData/downloads/tables.pdf.
102%
20%
0%
20%
40%
60%
80%
100%
120%
1996 1997 1998 1999 2000 2001 2002 2003 2004
Family Premium Federal Poverty Level
Cumulative Change in Family Health Insurance Premiums and Federal Poverty Level, 1996 - 2004
Source: Premium data from Agency for Healthcare Research and Quality, Medical Expenditure Panel Survey, 1996-2004, at http://www.meps.ahrq.gov/mepsweb/; Federal Poverty Level based on HHS Federal Poverty Guidelines (1996 through 2004) at http://aspe.hhs.gov/poverty/figures-fed-reg.shtml. Rate of growth based on change for one person (change for 4 person family would be 20.8% rather than 20.3% over the period).
31%
1%
68%
At any time during the past 3 years, was a member of your immediate family or someone you know well receiving long-term care in a nursing home, at home, or in some other type of facility?
Yes
Don’t know/ Refused
No
Source: KFF Update on the Public’s Views of Nursing Homes and Long-Term Care Services (conducted October 1 – October 10, 2007)
American Public's Experience with Long-Term Care, 2007
Median Out-of-Pocket Health Spending as % of Income
11.9% 11.8% 12.0%12.8% 13.0%
14.9%15.5%
1997 1998 1999 2000 2001 2002 2003
Financial Burden of Health Spending Among Medicare Beneficiaries, 1997-
2003
Note: Difference between 1997 and 2003 is statistically significant at .05 level.Source: Kaiser/UCLA analysis of Medicare Current Beneficiary Survey Cost and Use files, 1997-2003.
10.4%
12.7%
8.5%7.7%
6.4%
1.3%2.9%
6.3%7.9%
9.5%
5.6%4.2%
3.2%
0.2%-0.5%
2.2%
2001 2002 2003 2004 2005 2006 2007 2008
Medicaid Spending Growth Medicaid Enrollment Growth
Projected
Percent Change in Medicaid Spending and Enrollment, FY 2001-2008
Notes: Enrollment percentage changes from June to June of each year. Spending growth percentage changes in state fiscal year.Source: KCMU survey of Medicaid Officials in 50 states and DC conducted by Health Management Associates, October 2007.
Distribution of the Increase in Uninsured Children, by Income, 2005-
2006
710,000 Uninsured Children
<200% FPL
200-399% FPL
400%+ FPL
220,000
340,000
150,000
31.3%
47.5%
21.2%
Note: 200% to 399% of the federal poverty level (FPL) is roughly $40,000-$80,000 in annual income for a family of four in 2006.Source: KCMU/Urban Institute analysis of the March 2007 CPS.
Percent of Seniors Who Did Not Fill or Delayed Filling Prescriptions Due to Cost, by Source of Drug Coverage,
2006
NOTES: Did not fill or delayed filling prescriptions due to cost refers to within the past twelve months. VA is Department of Veterans Affairs. Reference group for statistical significance is Part D coverage (*p<0.05).SOURCE: Kaiser/Commonwealth/Tufts-New England Medical Center National Survey of Seniors and Prescription Drugs, 2006.
12% *
8% *
20%
23% *
No Rx Part D Employer VA
(Among Non-Institutionalized Seniors Taking 1 or More Rx)
Distribution of Uninsured Children, 2004
1.0 Million
1.1 Million
0.6 Million
8 Million Uninsured Children
Not Eligible on the Basis of Immigration
Status
Not Eligible <300% FPL
Not Eligible >300% FPL
5.4 Million Uninsured Children
are Eligible but Unenrolled in
SCHIP or Medicaid
SOURCE: Urban Institute analysis of the 2005 Annual Social and Economic Supplement to the CPS for KCMU. Data has been adjusted for the Medicaid undercount.
1.7 Million Eligible for
SCHIP
3.7 Million Eligible for Medicaid
Medicare
• Social Insurance for the elderly– Description 1965
– Medicare Part A, B, C,
Percent of total Medicare population:Percent of total Medicare population:
NOTES: ADL is activity of daily living. The federal poverty (FPL) threshold for people age 65 and over was NOTES: ADL is activity of daily living. The federal poverty (FPL) threshold for people age 65 and over was $9,669/individual and $12,201/couple in 2006.$9,669/individual and $12,201/couple in 2006.SOURCE: Income data from US Census Bureau, Current Population Survey SOURCE: Income data from US Census Bureau, Current Population Survey published on statehealthfacts.org; ; all other data from Kaiser Family Foundation analysis of the Medicare Current Beneficiary Survey 2006 all other data from Kaiser Family Foundation analysis of the Medicare Current Beneficiary Survey 2006 Access to Care file.Access to Care file.
Fair/poor healthFair/poor health
Long-term care Long-term care facility residentfacility resident
3+ chronic conditions3+ chronic conditions
Under-65 disabledUnder-65 disabled
Cognitive/mental Cognitive/mental impairmentimpairment
Age 85+Age 85+
2+ ADL limitations2+ ADL limitations
Characteristics of the Medicare Population, 2006
5%
12%
16%
17%
26%
28%
29%
38%
48%Income less than Income less than 200% FPL200% FPL
Less than high school Less than high school educationeducation
Medicare Enrollment, by Eligibility Status, 2001-2007
34.4 35.1 35.0 35.4 35.8 36.0 36.8
5.7 6.0 6.0 6.3 6.7 7.0 7.2
0
5
10
15
20
25
30
35
40
45
2001 2002 2003 2004 2005 2006 2007
DisabledElderly
40.1 41.1 41.0 41.7 42.5 43.0 44.0
SOURCE: Kaiser Family Foundation, based on Annual Report of the Boards of Trustees of the Federal Hospital Insurance and Federal Supplementary Medical Insurance Trust Funds, 2002-2008.
In millions:
Medicare: Part A
• Medicare Part A is a type of hospital insurance provided by Medicare. The coverage provided by Part A includes inpatient care in hospitals, nursing homes, skilled nursing facilities, and critical access hospitals. Part A does not include long-term or custodial care. If you meet specific requirements, then you may also be eligible for hospice or home health care.
• Fiscal Intermediaries handle the claims for the Medicare Part A plan. These are private insurance companies that act as agents for the federal government in processing and paying Medicare claims.
Medicare Part A (Health Insurance) Trust Fund Balance, 2001-2019
Under High Cost, Low Cost, and Intermediate Assumptions
0%
25%
50%
75%
100%
125%
150%
175%
2001 2004 2007 2010 2013 2016 2019
Fund balance as % of annual expenditures:
NOTE: The Medicare Trustees recommend that the HI Trust Fund assets should be maintained at a level of at least 100% of annual expenditures. SOURCE: Kaiser Family Foundation, based on 2008 Annual Report of the Boards of Trustees of the Federal Hospital Insurance and Federal Supplementary Medical Insurance Trust Funds.
Actual Projected Low cost
Intermediate
High cost
Medicare: Part B
• Medicare Part B is a medical insurance provided by the federal government to eligible beneficiaries. The coverage provided by Part B includes medically necessary doctor's services, outpatient care, and most other services that Part A does not cover such as some physical or occupational therapies and some home health care services. Part B covers preventive services as well.
Medicare: Part C
• Medicare Part C combines your Part A and Part B options and must cover all medically needed services. The difference is that private insurance companies that are approved by Medicare provide this type of coverage. In most cases, Part C is a lower-cost alternative to the Original Medicare Plan, and providers usually offer extra benefits and include prescription drug coverage (Part D).
• Part C plans often have networks, and you must use the doctors or hospitals that belong to the plan. These plans help you coordinate and manage your overall care. Part C includes specialized care for people who need a large amount of health care services. If you find yourself needing medical attention while traveling out of your plan coverage area, you will still be covered for emergency or urgent care services.
Medicare: Part D
• Prescription Drug Coverage• “Donut hole” $3,600*• * Changes by year• Part D is prescription drug coverage insurance that is
provided by private companies approved by Medicare. You need to enroll when you first become eligible to keep from paying a penalty cost later. Part D was designed to help people with Medicare to lower their prescription drug costs and to protect against future costs. A prescription drug plan will also enable you to have greater access to medically necessary drugs.
Donut Hole
Total drug spend
TrOOPOut-of-pocket cost
Portion covered by Medicare
$0–$295 $0–$295Deductible is out-of-pocket
No Medicare coverage of costs
$295–$2,700 $295–$896.2525% out-of-pocket
75% covered by Medicare
$2,700–$6,154$896.25–$4,350.25
All costs are out-of-pocket
No Medicare coverage of costs
over $6,154 over $4,350.255% out-of-pocket
95% covered by Medicare
Effects of Medicare: Part D
• Shang and Goldman 2007
• Overall, a $1 increase in prescription drug spending is associated with a $2.06 reduction in Medicare spending. Furthermore, the substitution effect decreases as income rises, and thus provides support for the low-income assistance program of Medicare Part D.
Prescription Drug Coverage Among Medicare Beneficiaries, by Income, 2006
9% 13% 13% 11% 9%
37%47% 53%
16%
20%
19%
12%67%
46%
28% 23% 24%
1%<1%1%
1%3%1%
1%2% 2%
2%7%
17%
16%
Part D - Stand-alonePDP
Part D - MedicareAdvantage drug plan
Employer-sponsored
Self-purchased only
Other public/ private
No drug coverage
$10,000 or less
$10,001-$20,000
$20,001-$30,000
$30,001-$40,000
$40,001 or more
(N=6.4 mil) (N=9.4 mil) (N=7.0 mil) (N=5.7 mil) (N=6.7 mil)
NOTES: Percents rounded to the nearest whole number. N=weighted estimate of number of beneficiaries; mil=million. SOURCE: Kaiser Family Foundation analysis of the CMS Medicare Current Beneficiary Survey Access to Care File, 2006.
HHS Estimates of Prescription Drug Coverage Among Medicare Beneficiaries, 2008
NOTES: Estimates do not sum to 100% due to rounding. 1Includes Veterans Affairs, Indian Health Service, state pharmacy assistance programs, employer plans for active workers, Medigap, multiple sources, and other sources. 2Includes Retiree Drug Subsidy (RDS) coverage; retiree coverage without RDS; and FEHBP and TRICARE retiree coverage. 3Includes 0.4 million enrolled in other Medicare health plan types. PDP = Prescription Drug Plan. SOURCE: Kaiser Family Foundation analysis of HHS data, January 31, 2008 (Data as of January 2008).
Total Number of Beneficiaries = 44.2 Million
Total in Part D Plans: 25.4
Million(57%)
Stand-Alone PDPs
Medicare Advantage Drug
Plans3
Dual Eligibles in
PDPs
Retiree DrugCoverage2
No Drug Coverage
Other Creditable
Drug Coverage1
4.6million
10% 11.2million
25%
6.2million
14%8.0
million18%
10.2million
23%
4.0million
9%
Standard Medicare Prescription Drug Benefit, 2008
$320 Average Annual Premium$320 Average Annual Premium
$275 Deductible$275 Deductible
$2,510 in $2,510 in Total Drug CostsTotal Drug Costs
$5,726 in $5,726 in Total Drug CostsTotal Drug Costs ($4,050 out of pocket)($4,050 out of pocket)
$3,216 Coverage Gap (“Doughnut
Hole”)
NOTE: Annual premium amount based on $26.70 national average monthly beneficiary premium (CBO, March 2008). Amounts for premium, coverage gap, and catastrophic coverage threshold rounded to nearest dollar.SOURCE: Kaiser Family Foundation illustration of standard Medicare drug benefit for 2008 (standard benefit parameter update from CMS, April 2007).
Plan Pays 75%
Plan Pays 15%; Medicare Pays
80%
Enrollee Pays Enrollee Pays 100%100%
Enrollee Pays Enrollee Pays 5%5%
Enrollee Enrollee Pays Pays 25%25%
Medicare Part D Enrollees Who Reached the Coverage Gap in 2007
26%74%
Did not reach the coverage
gap
Reached the
coverage gap
Excludes Part D Enrollees Who Receive Low-Income Subsidies and Non-Users
NOTES: Estimates based on analysis of retail pharmacy claims for 1.9 million Part D enrollees in 2007.SOURCE: Georgetown University/NORC/Kaiser Family Foundation analysis of IMS Health LRx database, 2007.
The Standard Medicare Part D Benefit Coverage Gap, 2006-2017
$2,850$3,216
$3,721
$4,358
$5,100
$6,058 $6,241
$5,583
$4,706
$4,041
$3,439$3,051
2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017
Actual Projected
SOURCE: Kaiser Family Foundation, based on 2008 Annual Report of the Boards of Trustees of the Federal Hospital Insurance and Federal Supplementary Medical Insurance Trust Funds.
Amount of beneficiary out- of-pocket costs in the gap
Financing Medicare
• Part A– Payroll Taxes– Medicare FICA is uncapped and 2.9% split
50/50 with the employer
Medicare Cost Containment
• Diagnostic Related Groups (DRGs)
• Move towards risk adjustments
• Reforming Physician Reimursements– Limits balance billing (115% of Medicare rate)
• Growth Rates Capped
• Medicare Managed Care
• Selection Bias in Medicare HMOs
Medicare Spending as a Share of Total Federal Outlays, FY2009
Net Interest8%
Medicare14%
Social Security22%
Defense Discretionary
20%
Nondefense Discretionary
16%
Other12%
Medicaid and SCHIP
7%
SOURCE: Kaiser Family Foundation, based on OMB, Fiscal Year 2009 Budget, February 2008; Baseline Category Totals.
FY 2009 Total Outlays = $3.0 trillion
Supplemental Coverage Among Medicare Beneficiaries, by Income, 2006
14% 16% 11% 7% 5%
52%
19%
9%
20%
21%21% 20%
8%20%
42%52%
59%
1%1%
1%<1%<1% 1% 1%3%
18%
23%
22%
19%15%
Employer-sponsored
Medicare Advantage
Self-purchased only
Medicaid
Other public/ private
None - Medicare fee-for-service only
$10,000 or less
$10,001-$20,000
$20,001-$30,000
$30,001-$40,000
$40,001 or more
NOTES: Percents rounded to the nearest whole number. N=weighted estimate of number of beneficiaries; mil=million. SOURCE: Kaiser Family Foundation analysis of the CMS Medicare Current Beneficiary Survey Access to Care File, 2006.
(N=6.4 mil) (N=9.4 mil) (N=7.0 mil) (N=5.7 mil) (N=6.7 mil)
Medicare Benefit Payments, by Type of Service, 2007
Low-Income Subsidy Payments
Payments to Union/ Employer-Sponsored Plans
1%
Other Part B Benefits
Payments to Drug Plans
Hospital Outpatient
Hospital Inpatient
Skilled Nursing Facilities
Hospice2%
Physicians and Other Suppliers
Home Health
Total Benefit Payments = $426 billionNOTE: Does not include administrative expenses such as spending for implementation of the Medicare drug benefit and the Medicare Advantage program. SOURCE: Kaiser Family Foundation, based on Congressional Budget Office, Medicare Baseline, March 2008.
Part A
Part B
Part D
Part A and B20%
11% 18%
5%
30%
4%7%
4%
4%
Medicare Advantage (Part C)
Estimated Sources of Medicare Revenue, FY2009
8%3%6%
12%
12% 25% 9%
39%
73%79%
41%
85%
2%5%
1%
1%
Payroll Taxes
General Revenue
BeneficiaryPremiums
Payments fromStates
Taxation of SocialSecurity Benefits
Interest andOther
SOURCE: 2008 Annual Report of the Boards of Trustees of the Federal Hospital Insurance and Federal Supplementary Medical Insurance Trust Funds.
PART A$243.5 Billion
PART D$60.9 Billion
PART B$202.4 Billion
TOTAL$506.8 Billion
Distribution of Total Medicare Beneficiaries and Spending, 2005
10%
63%
37%
90%
Total Number of FFS Beneficiaries: 37.5 million
Total Medicare Spending: $265 billion
Average per capita Medicare spending (FFS only): $7,064
Average per capita Medicare spending among
top 10% (FFS only): $44,220
NOTE: FFS is fee-for-service. Includes noninstitutionalized and institutionalized Medicare fee-for-service beneficiaries, excluding Medicare managed care enrollees. SOURCE: Kaiser Family Foundation analysis of the CMS Medicare Current Beneficiary Survey Cost & Use file, 2005.
Medicare Beneficiaries and The Number of Workers Per Beneficiary
79
62
47
19
40
34
20
1966 1970 1990 2000 2010 2020 2030
Millions of beneficiaries
4.0
2.4
2.9
3.7
2000 2010 2020 2030
Number of workers per beneficiary
SOURCE: Kaiser Family Foundation, based on 2001 and 2008 Annual Reports of the Boards of Trustees of the Federal Hospital Insurance and Federal Supplementary Medical Insurance Trust Funds.
Median Out-of-Pocket Health Care Spending as a Percent of Income for Elderly vs. Non-Elderly
Households, 1998-2003
SOURCE: Kaiser Family Foundation/UCLA analysis of Consumer Expenditure Survey, 1998-2003.
13.4%12.4%
11.8%
13.7% 13.4%14.4%
2.7% 2.6%2.7% 2.6% 2.7% 2.7%
0%
2%
4%
6%
8%
10%
12%
14%
16%
1998 1999 2000 2001 2002 2003
Elderly
Non-Elderly
$454 $486 $514$567 $568
$636 $681$729
$814 $850 $887
$0
$200
$400
$600
$800
$1,000
2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018
Projected Medicare Outlays, 2008-2018Total outlays in billions:
NOTE: Numbers have been rounded to nearest whole number. SOURCE: Kaiser Family Foundation, based on Congressional Budget Office, The Budget and Economic Outlook: An Update, January 2008.
16% 16% 16% 17% 17% 18% 18% 19% 20% 20% 20%
3% 3% 3% 3% 3% 3% 4% 4% 4% 4% 4%
Share of:Federal BudgetGross Domestic Product
Medicare Advantage Enrollment, 1999-2008
0.91.7
0.22.3
6.9 6.86.1
5.5 5.3 5.56.1
7.6
9.010.1
1999 2000 2001 2002 2003 2004 2005 2006 2007 2008
Total Medicare Advantage
Private Fee-for-ServiceEnrollment in millions:
NOTE: Includes local HMOs, PSOs, and PPOs, regional PPOs, PFFS plans, Cost contracts, Demonstrations, HCPP, and PACE contracts. SOURCE: Kaiser Family Foundation, based on Mathematica Policy Research, Inc. “Tracking Medicare Health and Prescription Drug Plans Monthly Report” December 1999-2007. CMS Medicare Advantage, Cost, PACE, Demo, and Prescription Drug Plan Contract Report, Monthly Summary Report, July 2008.
Average Payments to Medicare Advantage Plans Relative to Traditional
Fee-for-Service Medicare
113%
112%
119%
117%
115%
All MedicareAdvantage
Plans
Local HMOs Local PPOs Private Fee-For-Service
Plans
Special NeedsPlans
SOURCE: Kaiser Family Foundation, based on Medicare Payment Advisory Commission, March 2008.
Medicare Advantage Plan Types
Traditional Fee-for-Service
Medicare = 100%
Percentage of Children Without Health Insurance, By Poverty Level, 1997-
2005
1997 1998 1999 2000 2001 2002 2003 2004 2005Notes: Survey method change in 2005 affects comparison with earlier years slightly. Children less than 18 years old.Source: L. Ku, “Medicaid: Improving Health, Saving Lives,” Center on Budget and Policy Priorities analysis of National Health Interview Survey data, August 2005.
Children below 200% of poverty
Children above 200% of poverty
23%
14%
6%5%
21%
5%
81%
3%
16%19%
Medicare Private Fee-for-Service Enrollment as a Share of the Total
Medicare Population, 2007
Traditional Medicare
HMO, PPO, and other
Private Fee-for-Service
Total Medicare Beneficiaries = 44 million
Medicare Advantag
e
SOURCE: Centers for Medicare and Medicaid Services, Medicare Advantage, Cost, PACE, Demo and Prescription Drug Plan Contract Report – Monthly Summary Report (Data as of May 2007).
40%
16% 16%
32%
57%49%
12% 10%
3% 3% 3%14% 15% 14%
19%
White African-American
Hispanic
MedicareAdvantage
Medicaid
Private*
None
Other
11 million 2.6 million 2 millionN=Note: Coverage was assigned based on the following hierarchy: Medicare Advantage, Medicaid, Private (employer-sponsored, Medigap), other public and unknown source, and no coverage. Source: Kaiser Family Foundation analysis of 2003 Medicare Current Beneficiary Survey Cost and Use File.
Medicare Advantage and Other Sources of Supplemental Coverage Among Medicare Beneficiaries Below 150% FPL, by
Race/Ethnicity
Total Medicare Private Health Plan Enrollment, 1999-2007
6.9 6.86.1
5.5 5.3 5.56.1
7.68.3
1999 2000 2001 2002 2003 2004 2005 2006 2007Note: Includes local HMOs, PSOs, and PPOs, regional PPOs, PFFS plans, Cost contracts, Demonstrations, HCPP, and PACE contracts. Source: Mathematica Policy Research, Inc. “Tracking Medicare Health and Prescription Drug Plans Monthly Report.” December 1999-2006. CMS Monthly Summary Report, February 2007.
In millions:
Benefits private plans and drug companies too much
Is too complicated
Helps people on Medicare save on
their prescriptions
60%
73%
68%
Percent Agreeing That the Medicare Drug Benefit…
Seniors' Views of the Medicare Rx Drug Benefit, 2006
Notes: Percents include those responding "strongly agree" and "somewhat agree"; margin of error +/- 4 points.
Source: KFF/HSPH The Public's Health Care Agenda for the New Congress and Presidential Campaign (conducted November 9-19, 2006).
Offer Rx Coverage,
Taking Subsidy
78%
Other Strateg
y14%
Do Not Provide Rx Coverage
8%
Large Employers' Expected Medicare Rx Coverage Strategy, 2007
Notes: Virtually all companies not providing drug coverage in 2007 discontinued drug coverage in 2006. "Other Strategy" includes supplementing Medicare drug coverage, contracting with Medicare drug plans, and becoming a Medicare drug plan. Applies to plan with the largest number of age 65+ retirees. Based on a non-probability sample of private-sector firms with 1,000 or more employees offering retiree health benefits.
Source: Kaiser/Hewitt 2006 Survey of Retiree Health Benefits, December 2006.