Health Care Costs and Payment Models

Medicare Part B

• Insures the elderly for physicians’ services
• Financed by federal taxes and monthly premiums from beneficiaries
• Available to those eligible for Medicare Part A who elect to pay the Medicare Part B premium of $134.00/month

Medicare Plan Structure

Medicare Part D

Medicare Part D

• Voluntary prescription coverage that is added to original Medicare, or included in Medicare Advantage
• Plans have monthly premiums in addition to that paid for Part B, average around $30 but wide variation
• Usually tiered formularies with copayments
• Deductibles vary but may not exceed $405 per year

Medicare Plan Structure
Medicare Advantage Plan

• Beneficiaries can enroll in a private health plan to receive Medicare covered benefits
• Medicare pays private insurers a set monthly fee per member; insurers manage risk
• Plans must cover Medicare parts A and B, usually cover D
• Rules vary: referrals for specialty care, restrictions on out-of-network care

Medicare Plan Structure

Federal program administered by the states, with the federal government paying between 50% and 76% of total Medicaid costs

• Federal program administered by the states, with the federal government paying between 50% and 76% of total Medicaid costs
• Required coverage includes: hospital, physician, laboratory, radiology, prenatal, preventive, nursing home, and home health services
• Pharmacy coverage is optional but currently is provided in all states
• Covered groups: non-elderly, low income persons and the disabled, no requirement for prior tax payments, evolving work requirements in some states

Medicaid6

Pre-ACA: Who were the uninsured?7

Pre-ACA: Who were the uninsured?7

• Adults without dependent children
• Low income families (<400% poverty level)
• Moderate income families (too high to qualify for Medicaid, too low to afford private insurance, some without access to employer sponsored insurance coverage)
• Undocumented persons