HEALTH CARE: NON-INCOME-TESTED MEDICARE-HOSPITAL INSURANCE (HI)1 BASIC PROGRAM INFORMATION LEGISLATIVE OBJECTIVE.-To provide hospital insurance for persons who are: (1) age 65 and over and eligible for social security or railroad retirement; (2) disabled and eligible for social security or railroad retirement for at least 24 consecutive months; or (3) chronic renal disease patients who have social security coverage either as worker, spouse, or dependent. DATE ENACTED AND MAJOR CHANGES. The program was enacted in 1965 to cover the hospital expenses of the aged. Coverage was extended to disability insurance beneficiaries and chronic renal disease patients in 1972. ADMINISTERING AGENCY.-The Social Security Administration of the Department of Health, Education, and Welfare, with the assistance of other Federal agencies, State health agencies, and intermediariesBlue Cross plans and private insurance companies-which determine the amount of payments due and process claims. FINANCING.-Medicare hospital insurance is financed by an earmarked payroll tax paid half by the covered employee and half by his employer, and a tax paid by self-employed people on their earnings. The combined health insurance tax rate for employee and employer is 1.8 percent paid on all earnings up to $14,100 (effective Jan. 1, 1975), and the tax rate for the self-employed is 0.9 percent on the same amount. Benefits for persons enrolled who reach age 65 before 1975 and who have insufficient coverage for full entitlement but meet a transitional insured status requirement are financed from general revenues of the U.S. Treasury (See section on old-age, survivors, and disability insurance OASDI.). Other aged can enroll by paying a premium of $36 a month. Premiums are redetermined annually. 1 Total 1973 benefit payments paid directly from the trust fund for health services were $6,653.977,000 incentive reimbursement costs for experiments and projects designed to determine various methods of increasing efficiency and economy in providing health care services, while maintaining the quality of such services, totaled $842,000; and $6,000,000 was received from SMI as reimbursement for certain costs of radiology and pathology services that were initially paid by HI, but were actually liabilities of SMI, leaving net benefit costs of $6,649,000,000. Much of this information, including the supplementary materials, was taken from the "1974 Annual Report of the Board of Trustees of the Federal Hospital Insurance Fund," 93d Cong., 2d sess., House Doc. No. 93-314. Administrative costs in fiscal year 1973 were $192,842,000 or 2.8 percent of total program costs, up from 2.7 percent in 1971. Virtually all persons in the population who are age 65 and over are covered. ELIGIBILITY CRITERIA MAJOR ELIGIBILITY CONDITIONS.-To be eligible to receive benefits, individuals must be: (1) age 65 or over and receiving or entitled to social security or railroad retirement benefits as an insured worker or a dependent or survivor of an insured worker; (2) disabled and eligible for social security or railroad retirement benefits for 24 or more consecutive months; or (3) chronic renal disease patients who have social security coverage either as worker, spouse or dependent. Special temporary provision.-In addition to the above, persons are eligible for hospital insurance who reached age 65 before 1968 and who had insufficient coverage for entitlement to cash benefits. Persons who reach age 65 after 1967 and have three quarters of covered employment for each additional year after 1967 until 1975 for men and 1974 for women are also eligible. At those times, the coverage requirement will be the same as for social security cash benefits. Persons 65 and over not eligible under any other entitlement provisions can get medicare coverage by paying a premium of $36 a month. Excluded from the program are persons eligible for Federal employees' health benefits, aliens admitted for permanent residence who have resided in the United States less than 5 consecutive years immediately preceding application, and persons convicted of certain subversive activities. PERSONS INCLUDED.-Only the eligible individuals noted above are included in the program. INCOME TEST.-There is none. OTHER CONDITIONS Citizenship. There is no requirement except under the special temporary provision for persons not fully entitled. See major eligibility conditions above. Residence requirement.-Payments ordinarily are made only for services provided in the United States, Puerto Rico, the Virgin Islands, Guam, and American Samoa. However, payments may be made for emergency hospital services provided in border areas outside the United States for persons who become ill or are injured in this country if the foreign hospital to which they are admitted is closer or more accessible than the nearest U.S. hospital. Institutional status.-There is no limitation on benefits for persons in institutions. Persons residing in institutions may qualify if they are otherwise eligible. BENEFITS AND SERVICES NATURE OF BENEFITS.-Hospital and posthospital services are covered by insurance as specified in legislation. Payment is made to providers of inpatient hospital services, health maintenance organizations, posthospital extended care in a skilled nursing home or other qualified extended-care facility, and for posthospital home health services for the reasonable cost of such services, within specified limits, reduced by fixed deductible amounts charged to the beneficiary. Inpatient hospital services are provided up to 90 days in each benefit period. Á benefit period begins when the individual receives. hospital or extended-care services and ends when he has not received such care for 60 consecutive days. Determinants of benefit amounts.-The beneficiary pays an inpatient. hospital deductible amount applicable to all hospitalization in a benefit period and a daily coinsurance amount for the 61st through the 90th day. The inpatient hospital deductible was originally $40; however, the medicare law requires an annual review of the deductible by the Secretary of Health, Education, and Welfare and provides a specific formula for redetermining the deductible. In general, the inpatient hospital deductible rises as hospital costs rise; for 1974, the deductible was $84. All coinsurance amounts under hospital insurance are a percentage of the inpatient hospital deductible. Thus, for the 61st through the 90th day of covered hospital care in a benefit period, there is a daily coinsurance amount equal to one-fourth the inpatient hospital deductible; for 1974, the amount was $21 per day. In addition, each beneficiary has a lifetime reserve of 60 inpatient hospital days for optional use with a daily coinsurance amount equal to onehalf the inpatient hospital deductible; for 1974, this amount is $42 per day. For instance, if a beneficiary is in the hospital for any length of time up to 61 days in a benefit period, he pays $84 toward the hospital costs. If he is in the hospital for 90 days, he pays $21 per day for the 61st through the 90th day, or a total of $714. If he stays in the hospital another 10 days and uses part of his lifetime reserve, he pays. an additional $420. Posthospital extended care is allowed for up to 100 days in each benefit period with a daily coinsurance amount equal to one-eighth of the inpatient hospital deductible (for 1974 this amount is $10.50) for each day after the first 20 days. Posthospital home health services for homebound persons (visiting nurse services and various types of therapy) are allowed for a maximum of 100 visits during the year following 3 days or more of hospitalization or extended care. Hospital insurance payments are not made to the extent that payment is made, or can reasonably be expected to be made, under a workmen's compensation plan of the United States or an individual State. Benefit amounts.-The average payment per beneficiary receiving services in fiscal year 1973 was $1,414; the average for all enrolled persons was $318 per year. These amounts were up from $1,210 and $260, respectively, in 1971. |