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Tricia Neuman, Sc.D. Director, Medicare Policy Project Vice President, Kaiser Family Foundation
For KaiserEDU June 2009
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Exhibit 2
Medicare Overview
1965: Signed into law by President Johnson to provide health and economic security to seniors 1972: expanded to cover younger adults with permanent disabilities 2009: covers 45 million people, including 7 million under-65 disabled Covers individuals without regard to income or medical history Helps pay for range of medical services, including inpatient hospital, physician, home health, diagnostic tests and prescription drugs
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Exhibit 3
NOTE: ADL is activity of daily living. SOURCE: Income data for 2007 from U.S. Census Bureau, Current Population Survey, 2008 Annual Social and Economic Supplement. All other data from Kaiser Family Foundation analysis of the Centers for Medicare & Medicaid Services Medicare Current Beneficiary Survey, Access to Care file, 2006.
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Exhibit 4
Exhibit 5
Access to doctors and other health care providers is typically limited to those in the plans network
Plans are paid a fixed amount per enrollee On average, 14 percent more than it would pay under traditional Medicare This extra payment will increase overall costs to Medicare by about~$150 b over 10 years
1999
2001
2003
2005
2007
2009
Exhibit 6
Premiums and cost-sharing vary; most plans have a gap in coverage (doughnut hole) Additional premium and cost-sharing subsidies for low-income Funded by general revenues, enrollee premiums and payments from states
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Exhibit 7
Part A
Part B
Part D Part A and B
4%
6% 4% 28%
5%
19%
5%
4%
Home Health
23%
Exhibit 8
40%
77%
Beneficiary Premiums Payments from States Taxation of Social Security Benefits Interest and Other
39%
12% 3% 4%
2%
1%
7% 7%
PART A $237 Billion
25%
2% PART B $196 Billion
11% 13%
PART D $66 Billion
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Source: 2009 Annual Report of the Boards of Trustees of the Federal Hospital Insurance and Federal Supplementary Medical Insurance Trust Funds.
Exhibit 9
Medicare offers important coverage, but with high cost-sharing and benefit gaps
Does not cover all medical benefits Very limited long-term care coverage No dental, hearing aids or eyeglasses Has relatively high cost-sharing requirements Deductibles for Part A, Part B, and Part D Coinsurance/copayments Part D coverage gap (doughnut hole) No limit on out-of-pocket spending Unlike typical plans offered by large employer Pays about half of beneficiaries total health and long-term care spending
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Exhibit 10
Employer
Medicaid
59%
52%
19%
Self-Purchased Only
3% 20% 21% 9% 1% 14% 16% 11% 7% 1% <1% <1% 5% <1% 21%
1%
1% 20%
Other Public/Private
No Supplemental Coverage
$10,000 or less
$10,00120,000
$20,00130,000
$30,00140,000
$40,001 or more
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SOURCE: Kaiser Family Foundation analysis of the CMS Medicare Current Beneficiary Survey Access to Care File, 2006.
Exhibit 11
Median out-of-pocket health spending as a percent of income for Medicare beneficiaries is on the rise especially for those with modest incomes
1997
21.9% 17.6% 16.1% 11.9% 10.6% 7.8% 5.4% 16.0% 14.9% 22.4%
2005
Total
<100% Poverty
100-199% Poverty
200-399% Poverty
400%+ Poverty
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NOTES: In 2005, federal poverty level: $9,570/individual and $12,830/couple. SOURCE: Kaiser Family Foundation. Skin-in-the-Game, November 2008.
Exhibit 12
2018 (projected)
48%
Part B: Supplementary Medical Insurance Premiums Deductible $1,157 $135 $1,577 $184
36% 36%
Premiums
Deductible Coverage gap
$364
$295 $3,454
$667
$490 $5,755
83% 66%
67%
Return to Tutorials Source: 2009 Annual Report of the Boards of Trustees of the Federal Hospital Insurance and Federal Supplementary Medical Insurance Trust Funds.
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Exhibit 14
Medicare accounts for 13% of federal spending and 22% of national health spending
23%
21%
13% 16%
Nondefense Discretionary
Medicare
7% 13%
Medicaid/ CHIP
9%
Net Interest Other
Exhibit 15
63%
90%
37%
NOTE: Excludes Medicare Advantage enrollees *Average Medicare FFS Spending only SOURCE: Kaiser Family Foundation analysis of the CMS Medicare Current Beneficiary Survey Cost & Use file, 2005.
Exhibit 16
GDP Medicare spending is projected to double from 3.5% of GDP in 2010 to 6.4% of GDP by 2030.
The Congressional Budget Office indicates most of the growth is due to rising health costs, rather than the aging of the Baby Boom generation.
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Exhibit 17
Exhibit 18
Additional Resources
Kaiser Family Foundations Medicare Policy Project kff.org/medicare/index.cfm Official Medicare site medicare.gov/ Centers for Medicare & Medicaid Services (CMS) cms.hhs.gov Congressional Budget Office (CBO) cbo.gov Medicare Payment Advisory Commission (MedPAC) medpac.gov
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