AHS360_F10_unit04_PDF - Why Do We Study Medicare Provided...

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1 Medicare, Medicaid and CHIP Chap. 6, pp. 134 – 149, PLB September 7, 2010 AHS 360 - Unit 4 - Fall 2010 1 Why Do We Study Medicare • Provided coverage to greater than 42.5 million people in 2009 • Number of beneficiaries is increasing (from 19.1 million in 1966 to 43 million in 2009) • Actual Expenditures for Medicare have always exceeded Projections • Fewer Wage Earners to Support Recipients • Medicare is projected to Go BROKE! September 7, 2010 2 AHS 360 - Unit 4 - Fall 2010 Profile of Medicare Beneficiaries, 2007 September 7, 2010 AHS 360 - Unit 4 - Fall 2010 3 Table 4.6 Number of Medicare Beneficiaries, 1970-2040 Enrol ment in the Medicare Program is projected to nearly double in the next 30 years. 61.6 78.6 86.4 50 60 70 80 90 100 ment (millions) Actual Projected . Source : Medicare Trustees Report 2006 20.4 28.4 34.2 39.7 42.5 46.5 0 10 20 30 40 1970 1980 1990 2000 2005 2010 2020 2030 2040 Year Enroll September 7, 2010 4 AHS 360 - Unit 4 - Fall 2010 Medicare and the Federal Budget • One of the fastest growing programs in our federal budget Year Percent of Budget 1975 3.5% 1995 10.5% 1999 12.0% 2001 12.0% 2006 12.7% ($342.9B out of $2.7T) 2009 13% September 7, 2010 5 AHS 360 - Unit 4 - Fall 2010 Medicare accounts for 13% of federal spending and 22% of national health spending Defense Discretionary Social Security 21% 23% Medicare and Medicaid/CHIP combined are the 3 rd largest category of federal spending Nondefense Discretionary Medicare Medicaid/ CHIP Other Net Interest 13% 7% 13% 9% 16% Total Federal Spending, 2009 = $3.1 trillion September 7, 2010 6 AHS 360 - Unit 4 - Fall 2010
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2 Medicare: Overview • 1965: 18th Amendment (Title XVIII) to Social Security Act of 1935 • President Johnson: Great Society • Goal: to assure access to health care for the elderly (age 65+) • 1973: added disabled and ESRD • 2006: Added prescription drug benefit September 7, 2010 7 AHS 360 - Unit 4 - Fall 2010 The Need for Medicare in 1965: • High poverty rates among the elderly • Insurance Coverage as part of retirement benefits uncommon • Private insurers reluctant to offer insurance to the elderly September 7, 2010 8 AHS 360 - Unit 4 - Fall 2010 September 7, 2010 9 AHS 360 - Unit 4 - Fall 2010 Buying Power • People who previously didn’t have coverage were now covered • Resultedinanincreasein Resulted in an increase in – Admissions – Length of Stay – Private Physicians Visits September 7, 2010 10 AHS 360 - Unit 4 - Fall 2010 Medicare: Overview Cont’d • U.S. Centers for Medicare and Medicaid Services (CMS) – (Formerly: Health Care Financing Administration) • Entitlement : Federal Government - FICA/Medicare payroll tax – The Medicare tax rate is 2.9% for the employee and the employer (each pay half) September 7, 2010 11 AHS 360 - Unit 4 - Fall 2010 Over the last several decades, both the public and private sector share of health spending has increased, while the share from out-of-pocket spending has declined. September 7, 2010 AHS 360 - Unit 4 - Fall 2010 12
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3 Distribution of Personal Health Care Expenditures by Source of Payment, 1997 and 2007 2007 Public 45.3% Private 54.7% 1997 Public 44.4% Private 55.6% Source: Kaiser Family Foundation calculations using NHE data from Centers for Medicare and Medicaid Services, Of ice of the Actuary, National Health Statistics Group, at ht p:/ www.cms.hhs.gov/NationalHealthExpendData/ (see Historical; National Health Expenditures by type of service and source of funds, CY 1960-2007; file nhe2007.zip).
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This note was uploaded on 08/21/2011 for the course AHS 330 taught by Professor Smith during the Fall '10 term at University of Alabama at Birmingham.

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AHS360_F10_unit04_PDF - Why Do We Study Medicare Provided...

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