A Primer on Medicare: Key Facts About the Medicare Program and the People it Covers
Appendix 1: Medicare Benefits and Cost-Sharing Requirements, 2015
| PART A | |
| Deductible | $1,260 per benefit period |
| Inpatient hospital | |
| Days 1-60 | No coinsurance |
| Days 61-90 | $315 per day |
| Days 91-150 | $630 per day (for up to 60 lifetime reserve days) |
| After 150 Days | Not covered |
| Skilled nursing facility | |
| Days 1-20 | No coinsurance |
| Days 21-100 | $157.50 per day |
| After 100 Days | Not covered |
| Home Health | No coinsurance; no limit on number of visits |
| Hospice | No coinsurance for hospice care; copayment of up to $5 for outpatient drugs and 5% coinsurance for inpatient respite care |
| Inpatient psychiatric hospital | Up to 190 days in a lifetime |
| PART B | |
| Deductible | $147 |
| Premium | Standard = $104.90/month; income-related monthly premiums: |
| $85,000-$107,000/single or $170,000-$214,000/couple: $146.90 | |
| $107,000-$160,000/single or $214,000-$320,000/couple: $209.80 | |
| $160,000-$214,000/single or $320,000-$428,000/couple: $272.70 | |
| Greater than $214,000/single or $428,000/couple: $335.70 | |
| Physician and other medical services | |
| MD accepts assignment | 20% coinsurance |
| MD does not accept assignment | 20% coinsurance, plus up to 15% above the Medicare-approved fee |
| Outpatient hospital care | 20% coinsurance |
| Ambulatory surgical services | 20% coinsurance |
| Diagnostic tests, X-rays, and lab services | 20% coinsurance |
| Durable medical equipment | 20% coinsurance |
| Outpatient mental health services | 20% coinsurance |
| Physical, occupational, and speech therapy | 20% coinsurance; certain limits may apply |
| Clinical laboratory services | No coinsurance |
| Home health care | No coinsurance; no limit on number of visits |
| One-time “Welcome to Medicare” physical exam | No coinsurance; covered within first 12 months of Part B enrollment; Part B deductible does not apply |
| Preventive services* | |
| Annual “wellness exam”, flu shot, pneumococcal shot, Hepatitis B shot, colorectal and prostate cancer screening, pap smear, mammogram, cardiovascular screening, abdominal aortic aneurysm screening, bone mass measurement, diabetes screening/monitoring, glaucoma screening, smoking cessation, HIV screening | No coinsurance for most preventive services if received from a provider who accepts assignment; however, a coinsurance may apply to an office visit when these services are received |
| PART D | |
| Information below applies to the standard Part D benefit; benefits and cost-sharing requirements typically vary across plans. Beneficiaries receiving low-income subsidies pay reduced cost-sharing amounts. | |
| Deductible | $320 |
| Premium | $33.13 national average monthly premium (unweighted PDP and MA-PD plan average) |
| Income-related monthly premium amounts (plus plan premium): | |
| $85,001-$107,000/single or $170,001-$214,000/couple: $12.30 | |
| $107,001-$160,000/single or $214,001-$320,000/couple: $31.80 | |
| $160,001-$214,000/single or $320,001-$480,000/couple: $51.30 | |
| Greater than $214,000/single or $480,000/couple: $70.80 | |
| Initial coverage (up to $2,960 in total drug costs) | 25% coinsurance |
| Coverage gap (between $2,960 and $7,062 in total drug costs) | 45% coinsurance for brand-name drugs, 65% coinsurance for generic drugs; phasing down to 25% in 2020 |
| Catastrophic coverage (above $4,700 in out-of-pocket costs) | Minimum of $2.65/generic, $6.60/brand; or 5% coinsurance |
| NOTES: *This table does not include all Medicare-covered benefits or preventive services; for a complete listing, see http://www.medicare.gov/Coverage/Home.asp and http://www.medicare.gov/Health/Overview.asp. | |
| SOURCE: Centers for Medicare & Medicaid Services, www.medicare.gov, Medicare & You 2015. | |
Appendix 2: Standard Medigap Plan Benefits
| Standard Medigap Plan Benefits | ||||||||||||||
| MEDIGAP POLICY | ||||||||||||||
| BENEFITS | A | B | C | D | E1 | F | G2 | H1 | I1 | J1 | K3 | L3 | M4 | N4,5 |
| Medicare Part A Coinsurance and all costs after hospital benefits are exhausted | x | x | x | x | x | x | x | x | x | x | x | x | x | x |
| Medicare Part B Coinsurance or Copayment for other than preventive services | x | x | x | x | x | x | x | x | x | x | 50% | 75% | x | x |
| Blood (first 3 pints) | x | x | x | x | x | x | x | x | x | x | 50% | 75% | x | x |
| Hospice Coinsurance or Copayment6 | x | x | x | x | x | x | 50% | 75% | x | x | ||||
| Skilled Nursing Facility Coinsurance | x | x | x | x | x | x | x | x | 50% | 75% | x | x | ||
| Medicare Part A Deductible | x | x | x | x | x | x | x | x | x | 50% | 75% | 50% | x | |
| Medicare Part B Deductible | x | x | x | |||||||||||
| Medicare Part B Excess Charges | x | x | x | x | ||||||||||
| Foreign Travel Emergency (up to plan limits) |
80% | 80% | x | 80% | 80% | x | x | x | 80% | 80% | ||||
| Out-of-Pocket Limit | $4,940 | $2,470 | ||||||||||||
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NOTE: Check marks indicate 100 percent benefit coverage. Shaded columns indicate Medigap policies no longer available for sale to new policyholders. Amount in table is the plan’s coinsurance amount for each covered benefit after beneficiary pays deductibles or cost-sharing amounts, where applicable. The Affordable Care Act eliminated cost-sharing for preventive benefits rated A or B by the U.S. Preventive Services Task Force, effective 2011.
1 As of June 1, 2010, Medigap Plans E, H, I, and J are no longer available for purchase by new policyholders; existing policyholders may remain in these plans.
2 Benefits for Plan G reflect the standard benefit after June 1, 2010 (Part B excess charges changed from 80% to 100%).
3 Medigap Plans K and L became available for purchase in 2005.
4 Medigap Plans M and N became available for purchase after June 1, 2010.
5 Plan N pays 100% of the Part B coinsurance except up to $20 copayment for some office visits and up to $50 for emergency department visits that don’t result in an inpatient admission.
6 Hospice Coinsurance or Copayment coverage added to Plans A, B, C, D, F, and G in June 2010.
SOURCE: Centers for Medicare & Medicaid Services, 2015 Guide to Health Insurance.
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Appendix 3: Common Medicaid Eligibility Pathways and Benefits for Medicare Beneficiaries, 2014
| Common Medicaid Eligibility Pathways and Benefits for Medicare Beneficiaries, 2014 | |||
| Pathway to Eligibility | Income Eligibility Level (individual/couple) | Asset Limit (individual/couple) |
Covered Costs and Benefits |
| SSI Related (mandatory) | <75% of poverty |
$2,000/$3,000
(varies by state)
|
Medicaid benefits,Medicare Part A and Part B premiums and cost sharing |
| Poverty Level (optional) | (SSI income eligibility) | ||
| Medically Needy (optional) | ≤100% of poverty | ||
| Special Income Rule for Nursing Home Residents (optional) | Must spend income down to a specified level to qualify, varies by state | ||
| HCBS Waiver (optional) |
Institutionalized individuals with income <300% of the SSI level | ||
| Medicare Savings Programs | |||
| Qualified Medicare Beneficiary (QMB) (mandatory) | <100% of poverty | $7,160/$10,750 | Medicare Part A and Part B premiums and cost sharing |
| Specified Low-Income Medicare Beneficiary (SLMB) (mandatory) | 100%-120% of poverty | $7,160/$10,750 | Medicare Part B premiums |
| Qualified Individual (QI) (mandatory) | 120%-135% of poverty | $7,160/$10,750 | Medicare Part B premiums |
| Qualified Disabled and Working Individual (QDWI) (mandatory) | <200% of poverty | $4,000/$6,000 | Medicare Part A premiums |
| NOTE: SSI is Supplemental Security Income. HCBS is home and community based services. Medicaid benefits for dual-eligible beneficiaries are jointly financed by the federal government and states. Although certain categories of dual-eligible beneficiaries are eligible for Medicaid coverage of their Medicare cost sharing, the Balanced Budget Act of 1997 permitted states to pay less than the full amount of cost sharing if the Medicare rates minus the cost-sharing amount is higher than the Medicaid rate for these services. Resource limits for QMB, SLMB, QI, and LIS are adjusted annually for inflation. Not all income and resources (e.g., the value of a house, vehicle, etc.) are counted towards limits. In addition, states may use less restrictive methodologies for counting income and resources, enabling them to expand eligibility above limits shown here. Eleven 209(b) states may use more restrictive limits and methodologies when determining eligibility for full Medicaid benefits. | |||
Appendix 4: Medicare Payments to Providers
| Medicare Payments to Providers | |||
| Type of care/ Provider setting | Unit and basis of payment | Examples of Payment Adjustments1 | Total Medicare Payments (2013) |
| Acute Inpatient Care | |||
| Acute care hospitals | Per case (discharge) based on 751 diagnosis categories | (+) Added payments for: teaching hospitals; high share of low-income patients; outlier costs(-) Penalties based on: readmission rates; hospital acquired condition rates; no qualified EHR | $136.8 billion |
| Inpatient psychiatric facilities | Per day, based on one national average rate | (+) Added payments for: teaching hospitals, facilities with EDs; electroconvulsive therapy treatment; selected patient characteristics(-) Daily rate declines as length of stay increases | $4.4 billion |
| Critical access hospitals | Per service, based on hospital’s reported costs | Payments are calculated from submitted accounting data to equal 101% of allowable Medicare costs | $9 billion |
| Ambulatory Care | |||
| Physicians and other health professionals | Per service, based on 7,000+ items/services | (+) Added payments for services provided in health professional shortage areas;(-) Reductions for non-physician practitioners; penalty for no qualified EHR; SGR formula calls for fee cuts | $68.6 billion |
| Hospital outpatient departments | Per service, based on ~750 categories | (+) Added payments for: certain drugs and devices; outlier costs; some cancer and pediatric hospitals(-) Multiple procedures reduction in same encounter | $37.2 billion |
| Ambulatory surgical centers | Per surgical procedure, based on 300+ categories | (+) Added payments for certain implantable devises(-) Multiple procedures reduction in same encounter | $3.7 billion |
| Outpatient dialysis | Per dialysis treatment, at 3x/week; bundled services, drugs, labs, equipment | (+) Increased payments for: certain tests/drugs; patient and facility characteristics; outlier costs(-) Reductions for not achieving quality targets | $10.7 billion |
| Post-Acute Care | |||
| Skilled nursing facilities | Per day, based on 66 service needs categories | (+) Added payments for patients with AIDS | $28.4 billion |
| Home health care | Per 60-day episode, based on 153 categories/ 5 subgroups | (+) Added payment for: services in rural areas; outlier costs; use of non-routine medical supplies | $18.4 billion |
| Inpatient rehabilitation facilities | Per discharge, based on 385 diagnosis categories | (+) Added payments for: services in rural areas; outlier costs; teaching facilities(-) Reduced payment for short stays | $6.7 billion |
| Long-term care hospitals | Per discharge, based on ~1,000 diagnosis categories | (+) Added payments for outlier costs(-) Reduced payment for: short stays; referrals from same hospital exceeding specified thresholds | $5.5 billion |
| Other | |||
| Hospice | Per day, based on 4 categories of care | (-) Agency-specific payment caps may limit payments | $15.9 billion |
| Durable medical equipment | Per item, based on 5 categories of ~2,000 product groups OR competitive bids in some areas | (+) Added payments for: customized items; drugs used with equipment; oxygen | $7.1 billion |
| Outpatient laboratories | Per test, based on ~1,250 fee- schedule codes | Payment rates are not adjusted for geographic differences in input costs, unlike most other Medicare payment systems | $9.7 billion |
| Ambulance services | Per trip, based on 9 categories of transport | (+) Additional payments for transports in rural areas(-) Reduction for non-emergent transport of ESRD patient for dialysis services | $5.3 billion |
| Other2 | $5.6 billion | ||
| Total | $373 billion | ||
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NOTE: EHR is electronic health record. SGR is sustainable growth rate. ED is emergency department. ESRD is end stage renal disease.
1 Most payment systems are also adjusted for geographic and market area differences (e.g., wage index adjustments). Other applicable payment adjustments may not be listed due to lack of space in table.
2 Other includes community mental health centers; federally qualified health centers (FQHCs); hospital outpatient department services not paid for using the outpatient prospective payment system; in-office labs; and rural health clinics.
SOURCE: Kaiser Family Foundation analysis of 2014 Medicare Trustees Report and MedPAC Payment Basics (October 2014).
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