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Is Medicare a state or federal program?
Just the essentials...
Medicare is a federal program
The US Congress authorized Medicare in 1966
Medicare funds come from federal taxes, consumer payments, and premiums
The Centers for Medicare and Medicaid administer Medicare
Medicaid is State-run program using partial federal funding
Medicare is the national health services program for older Americans. It has several parts designed to make a comprehensive healthcare system. It provides medical care, prescription drugs, and hospital care.
The federal government has a strong legal responsibility when carrying out Medicare. It must keep a rule of medical necessity. It must provide that which is necessary for the diagnosis and treatment of illness or injury.
The Federal Health Insurance for Older Americans
Medicare began as an amendment to the Social Security Act. The Original Medicare was the Medical Insurance of Part B and the Hospital coverage of Part A. The below-listed items are the major parts of Medicare.
Medicare Part A – Hospital Insurance
Medicare Part B – Medical Insurance
Medicare Part C – Medicare Advantage
Medicare Part D – Prescription Drugs
Medicare Supplement, also known as Medigap – Gap insurance
Beginning with Federal Original Medicare
Medicare Parts A and Part B comprise the Original Medicare. The Congress later added the Prescription Drug benefit and the private sector style of health insurance in Medicare Advantage.
The Original Medicare is a government run program for medical services and hospital care. Users are free to select among doctors and hospitals that agree to accept the Medicare assignment of fees and payments.
Users must pay any balance bill differences. Original Medicare does not operate on the basis of network and referrals; users select the medical services they need.
The massive undertaking to insure a national and diverse population requires technical expertise and consistency. The Centers for Medicare and Medicaid use several networks of private contractors to process claims and maintain records.
These layers of business interface work closely with the medical service providers in every region. The process helped reconcile differences in benefits that can develop between geographic areas.
The Centers for Medicare and Medicaid approve plans presented by private insurers for Medicare Advantage. These plans must cover the benefit of Original Medicare, but they can do so in various ways. The insurers can devise methods for saving costs in some areas and reducing out of pocket expenses in another area.
This is the type of creative approached Congress wished to see when authorizing Medicare Part C.
Types of Managed Care in Medicare Advantage
The private insurance plans in Medicare Advantage offer a wide variety of choices for consumers. There is another level of choice, and that is the managed care organizations. The balancing of resources, prices, and consumer costs require trade-offs. High premiums go along with low deductibles and out-of-pocket costs.
A managed care approach that helps one user may work against another. The use of networks means that there is a price preference for them and this limits choice or makes choices more costly. The below-itemized managed care types affect consumer choice in Medicare Advantage plans.
HMO is the health maintenance organization. They feature prevention and wellness programs in addition to a network for medical services. They did not use outside resources.
PPO is the preferred provider organization. This form of the plan does not restrict users to network resources; it pays a lower rate of cost sharing for outside resources. The PPO does not require referral nor does it use a primary care physician to oversee a patient’s care.
EPO is the exclusive provider network. It does not use outside resources. The EPO offers low prices to its members and full use of the network resources. The EPO does not use a primary care physician and does not require referrals.
HMOPOS is an HMO with a flexible option for outside services. The HMO has a primary care doctor and requires referrals for using network services. The point of service option is that the primary care physician can make referrals to outside sources. The insurance will cover the outside referral but at a much lower rate of cost sharing than with network resources.
PFFS is the private fee for services organization. These networks can provide significant costs savings. They do not use outside resources, and all costs are negotiated terms. The consumer gets the costs sharing they wish and decide when to go to outside sources and pay the fees out-of-pocket.
States Play a Role
States regulate the insurance business, and they license companies including Medigap insurance companies. States require certain combinations of Medigap insurance from those that choose to sell any Medigap policies in their jurisdiction.
They often require some extensive coverage plans along with any reduced feature plans. States control the enforcement of their rules about plan marketing.
States Run Medicaid
The federal government watches the quality of care that states use when providing Medicaid assistance. In effect, each state program is a combination of federal funds, federal quality standards, and state resources.
States set their own qualifications for Medicaid and are often at odds with federal policy. This was the case with Medicaid expansion and the Medicaid Gap.
Medicaid Expansion and Obamacare
The Obamacare Marketplace requires a minimum income level to generate tax credits and advance premium assistance. Without this, may people could not afford Obamacare policies. The states set an upper limit on income to qualify for Medicaid.
Between the state maximum and the Obamacare minimum, millions of families were trapped with no relief in sight. The Congress authorized an Expansion of Medicaid to support those in between the poverty line and about 138 percent of the poverty line.
The Medicaid Gap
States turned down federal funds to expand coverage to their vulnerable residents. They declined although expansion would have reduced the numbers of uninsured residents and avoided the weight of unpaid bills that plague local hospitals and clinics.
They reacted along political lines with Republican governors and legislatures turning away funds their residents needed.
Providing health and dental coverage, these programs are an integral part of the social safety net that protects the most vulnerable members of the society.
The private companies that offer Medicare Supplement must offer an approved combination of plans. States require a combination of comprehensive plans along with any limited option plans. The insurance companies can use medical underwriting to determine process, discriminate against applicants and reject applications.
They can grant provisional acceptance to some applicants and delay full participation up to 90 days. Medicare Supplement requires Medicare Parts A, and B. Acceptance is guaranteed during open enrollments and the initial enrollment period.
Medicare is a Federal Program with State Cooperation
Federal taxes, federal administration, and federal standards govern the largest healthcare system in the country. Medicare is the heart of the national entitlements.
Comparison shopping is an excellent way to find the best values in the private plans offered through Medicare Advantage, Prescriptions in Part D, and comprehensive care in Medicare Advantage.