Medicare

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Medicare, enacted in 1965, is a broad-based social insurance program administered by the federal government. State governments are largely out of the picture; however, there is some overlap in the programs. States pay Medicare care premiums for some low-income Medicaid eligible seniors, so-called dual eligibles. The Medicare program provides insurance to people over 65 and eligible for Social Security (people with disabilities became eligible in 1972). Medicare Part A covers hospital costs and is mandatory. Medicare Part B covers physician services, is voluntary, and requires a premium. The program is administered by the Centers for Medicare and Medicaid Services (CMS, formerly the Health Care Financing Administration, or HCFA), which uses private intermediaries to implement Part A and private insurance carriers to implement Part B. Commercial insurers or Blue Cross Blue Shield plans are generally used to review claims and make payments. Part C of Medicare provides options for beneficiaries to select a health care plan or managed care organization to provide their health benefits. Part D, as part of legislation signed into law in December 2003, provides a prescription drug benefit that will be fully available in 2006.

The Medicare program does not provide long-term care services for its beneficiaries, although it does provide some home care services and skilled nursing home services associated with an illness of hospital stay. As mentioned above, certain low-income elders are eligible for both the Medicare and Medicaid program; they are called dual eligibles. For these people, Medicaid pays Medicare premiums and other beneficiary out-of-pocket costs (copayments, co-insurance, and deductibles). Complex coverage and payment differences between the two programs, along with a lack of program coordination, make for dynamic intergovernmental relations. States want to limit Medicaid expenses and have Medicare pick up as much of the cost as possible, while Medicare administrators at CMS try to prevent this in the effort to keep federal costs down.

BIBLIOGRAPHY: Jennifer O’Sullivan and Richard Price, “Medicare, Congressional Research Service Brief,” Library of Congress (April 12, 1996): 2.

Michael Doonan

SEE ALSO: Health Care Policy; Medicaid