Medicare

This is a nationwide health insurance program providing health insurance protection to people 65 years of age and over, people entitled to social security disability payments for 2 years or more, and people with end-stage renal disease, regardless of income. The program was enacted July 30, 1965, as Title XVIII, Health Insurance for the Aged of the Social Security Act, and became effective on July 1, 1966. From its inception, it consists of two separate but coordinated programs, hospital insurance (Part A) and supplementary medical insurance (Part B).

In 1999, additional choices were allowed for delivering Medicare Part A and Part B benefits. Medicare+Choice (Part C) is an expanded set of options for the delivery of health care under Medicare, created in the Balanced Budget Act passed by Congress in 1997. The term Medicare+Choice refers to options other than original Medicare. While all Medicare beneficiaries can receive their benefits through the original fee-for-service (FFS) program, most beneficiaries enrolled in both Part A and Part B can choose to participate in a Medicare+Choice plan instead. Organizations that seek to contract as Medicare+Choice plans must meet specific organizational, financial, and other requirements. Most Medicare+Choice plans are coordinated care plans, which include health maintenance organizations (HMOs), provider-sponsored organizations (PSOs), preferred provider organizations (PPOs), and other certified coordinated care plans and entities that meet the standards set forth in the law. The Medicare+Choice program also includes Medical savings account (MSA) plans, which provide benefits after a single high deductible is met, and private, unrestricted FFS plans, which allow beneficiaries to select certain private providers. These programs are available in only a limited number of States. For those providers who agree to accept the plan's payment terms and conditions, this option does not place the providers at risk, nor does it vary payment rates based on utilization. Only the coordinated care plans are considered "managed care" plans. Except for MSA plans, all Medicare+Choice plans are required to provide at least the current Medicare benefit package, excluding hospice services. Plans may offer additional covered services and are required to do so (or return excess payments) if plan costs are lower than the Medicare payments received by the plan.

In the National Health Interview Survey (NHIS), the category "Medicare HMO" is defined as persons who are age 65 years or over and who responded "yes" when asked if they were under a Medicare managed care arrangement such as an HMO. This is a subset of Medicare Part C. Respondents who stated they had Medicare coverage but did not answer yes to the "managed care arrangement such as an HMO" are included in the Medicare fee-for-service category. "Medicare fee-for-service" is defined as Medicare Part A and/or Part B. The majority of these people had coverage from another source, primarily employer-sponsored retiree health insurance.

SOURCE: Health, United States

Related Links
Health Expenditures, National
Health Maintenance Organization (HMO)
Medicare

This page last reviewed January 11, 2007