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Medicare provides health coverage to approximately 50 million beneficiaries ages 65 and older and younger people with permanent disabilities. Medicare remains a hot topic in Washington and around the country as political leaders and other policy makers weigh potential changes to the program.

How much do you know about Medicare, the people it serves, the benefits it covers, and its financial status?

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1

Approximately what share of the federal budget goes toward Medicare, the federal program that provides health insurance to elderly and disabled Americans across all income levels?

2

What share of all Medicare beneficiaries lived on incomes of less than $22,000 in 2010, including income from Social Security and all other sources?

3

Which one of the following services is not typically covered by Medicare?

4

What share of Medicare beneficiaries has three or more chronic conditions, such as diabetes, arthritis, or osteoporosis?

5

Most large employer health plans protect enrollees from extraordinarily high medical bills by placing an annual limit on out-of-pocket costs. Does the fee-for-service Medicare program do this?

6

Do all Medicare beneficiaries pay the same premium for coverage of physician and outpatient services, regardless of their income?

7

Is Medicare spending expected to grow faster or slower per person than private health insurance spending over the next decade?

8

What share of the total Medicare population is enrolled in a Medicare Advantage plan, such as a Medicare HMO or PPO, rather than the traditional fee-for-service Medicare program?

9

Does the health reform law close the Medicare prescription drug benefit’s “doughnut hole,” or coverage gap, so seniors no longer have to pay the full cost of their medications when they reach the gap?

10

Under current law, how soon is Medicare’s Hospital Insurance Trust Fund projected to become insolvent, meaning it will not have enough money to pay the full cost of beneficiaries’ hospital care?

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Medicare Quiz

You Answered out of 10 Questions Correctly.

Question

Correct Response

1

Approximately what share of the federal budget goes toward Medicare, the federal program that provides health insurance to elderly and disabled Americans across all income levels?

15%

In 2011, Medicare accounted for 15 percent of total federal spending. Social Security and defense spending each accounted for 20 percent of the federal budget, while federal spending on Medicaid accounted for 8 percent of the budget, according to the Congressional Budget Office.

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2

What share of all Medicare beneficiaries lived on incomes of less than $22,000 in 2010, including income from Social Security and all other sources?

50%

In 2010, half of all Medicare beneficiaries had incomes below $22,000, including Social Security income, pension income, earnings, and income from other sources. Furthermore, most beneficiaries had modest savings. Half of all Medicare beneficiaries had savings of less than $53,000, including both retirement accounts and financial assets.

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3

Which one of the following services is not typically covered by Medicare?

Long-term care services and supports

Medicare does not typically cover the cost of a nursing home or other long-term care services and supports. The program provides coverage for up to 100 days in a skilled nursing facility following an inpatient hospital stay. It also provides home health services in some circumstances.

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4

What share of Medicare beneficiaries has three or more chronic conditions, such as diabetes, arthritis, or osteoporosis?

45% of Medicare beneficiaries have three or more chronic conditions

Overall, more than nine of every ten non-institutionalized Medicare beneficiaries report living with one or more chronic conditions; nearly half (45%) had three or more chronic conditions in 2008. Hypertension and arthritis were the most common, affecting 64 percent and 61 percent of beneficiaries, respectively.

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5

Most large employer health plans protect enrollees from extraordinarily high medical bills by placing an annual limit on out-of-pocket costs. Does the fee-for-service Medicare program do this?

No, Medicare does not include an out-of-pocket limit

The fee-for-service Medicare program does not include an annual limit on beneficiaries’ out-of-pocket spending for inpatient hospital, physician visits, and other medical services covered under Medicare Parts A and B.  Beneficiaries enrolled in Part D prescription drug plans are protected against catastrophic expenses, and are responsible for paying 5 percent of their total drug spending exceeding $6,658 in 2012.  While the fee-for-service portion of the Medicare program does not include an out-of-pocket limit, Medicare Advantage plans do.  Medicare Advantage plans – private plans that contract with Medicare to provide Medicare benefits, currently covering about a quarter of beneficiaries – are required to include a limit on out-of-pocket spending for Medicare-covered services.  In 2012, all Medicare Advantage plans must have an out-of-pocket limit of no more than $6,700.

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6

Do all Medicare beneficiaries pay the same premium for coverage of physician and outpatient services, regardless of their income?

No, not all Medicare beneficiaries pay the same premium

Medicare charges most beneficiaries the same Part B premium for physician and outpatient services – about $100 per month in 2012.  However, higher-income beneficiaries (individuals with annual incomes over $85,000 and couples with annual incomes over $170,000) are required to pay more.  These beneficiaries will pay between $140 to $320 per month in 2012, depending on their income.  Low-income Medicare beneficiaries with modest assets do not pay Medicare Part B premiums if they qualify for Medicaid.

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7

Is Medicare spending expected to grow faster or slower per person than private health insurance spending over the next decade?

Medicare spending is expected to grow SLOWER than private health insurance spending on a per person basis

Medicare spending per beneficiary is expected to grow slower than private health insurance spending on a per person basis from 2010 to 2019, according to official government projections.  Medicare’s relatively low growth rate is largely due to provisions in the 2010 health reform law, including reductions in annual payment updates to hospitals and other health care providers and reductions in payments to Medicare Advantage plans.

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8

What share of the total Medicare population is enrolled in a Medicare Advantage plan, such as a Medicare HMO or PPO, rather than the traditional fee-for-service Medicare program?

25% of Medicare beneficiaries were enrolled in Medicare Advantage plans in 2011

Medicare beneficiaries have the option to receive their Medicare benefits through private health plans, known as Medicare Advantage plans, as an alternative to the traditional fee-for-service Medicare program.  Medicare Advantage plans include health maintenance organizations (HMO), preferred provider organizations (PPOs) and other plan types.  In 2011, nearly 12 million of the 49 million people on Medicare were enrolled in a Medicare Advantage plan.

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9

Does the health reform law close the Medicare prescription drug benefit’s “doughnut hole,” or coverage gap, so seniors no longer have to pay the full cost of their medications when they reach the gap?

Yes, the health reform law does do this

The Medicare Part D drug benefit initially had a coverage gap, in which beneficiaries had to pay the full cost of their drugs after their total drug spending exceeded a certain amount, but the 2010 health reform law has begun to close this gap.  Starting in 2011, the health reform law gradually phases in coverage for beneficiaries who reach the “doughnut hole.”  By 2020, the share of total drug costs for which beneficiaries will be responsible will decrease to 25 percent -- the same share they pay prior to reaching the gap.  

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10

Under current law, how soon is Medicare’s Hospital Insurance Trust Fund projected to become insolvent, meaning it will not have enough money to pay the full cost of beneficiaries’ hospital care?

In 10 – 15 years

According to the Medicare Trustees, the Medicare Part A (Hospital Insurance) Trust Fund that pays for inpatient hospital care is projected to have insufficient funds to pay for all care beginning in 2024.  Part A Trust Fund solvency is affected by growth in the economy, which directly affects the amount of payroll taxes deposited into the Trust Fund, and by the demographic trends of an increasing number of beneficiaries and a declining ratio of workers making payroll tax contributions per beneficiary.  In the past, Congress has implemented policy changes that have extended the life of the Trust Fund by increasing revenue and/or reducing spending.

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