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1 1 (May 13, 2019)

handle is hein.crs/govzqx0001 and id is 1 raw text is: SCongressiona Research Service ~Info rming the legaslatiye debate since 1914 Updated May 13, 2019 Medicare Overview Medicare is a federal program that pays for covered health care services of qualified beneficiaries. It was established in 1965 under Title XVIII of the Social Security Act to provide health insurance to individuals aged 65 and older, and it was expanded in 1972 to include permanently disabled individuals under the age of 65. The program is administered by the Centers for Medicare and Medicaid Services (CMS), but individuals enroll in Medicare through the Social Security Administration. CMS also contracts with private entities to provide certain services, such as claims processing, auditing, and quality oversight. Medicare serves approximately one in six Americans and virtually all of the population aged 65 and older. In 2019, the program will cover an estimated 61 million persons (52 million aged and 9 million disabled). All beneficiaries are entitled to the same coverage regardless of income or medical history. Funding for Medicare benefits is considered mandatory spending and is not subject to the annual congressional appropriations process. Medicare Structure Medicare consists of four distinct parts. Medicare Parts A, B, and D each cover different services, and Part C provides a private plan alternative for Parts A and B. Together, Parts A and B of Medicare comprise original or traditional Medicare. Part A (Hospital Insurance, or HI) covers inpatient hospital services, skilled nursing care, hospice care, and some home health services. Part B (Supplementary Medical Insurance, or SMI) covers a range of medical services and supplies, including physician, laboratory, outpatient hospital and some home health services, physician-administered drugs, and durable medical equipment. Enrollment in Part B is optional, but most beneficiaries with Part A also enroll in Part B. Part C (Medicare Advantage, or MA) is a private plan option that covers all Parts A and B services, except hospice. MA plans may offer additional benefits or require smaller co-payments or deductibles than original Medicare. Those who enroll in MA must also be enrolled in Parts A and B. About one-third of Medicare beneficiaries are enrolled in MA. Part D is an optional outpatient prescription drug benefit. Part D is provided through private prescription drug plans (PDPs), which offer only drug coverage or, through Medicare Advantage, prescription drug plans (MA-PDs), which offer drug coverage that is integrated with the health care coverage they provide to beneficiaries under Part C. About three-quarters of eligible Medicare beneficiaries are enrolled in Part D. Medicare Spending Medicare spending is driven by a variety of factors, such as the level of enrollment, the complexity of medical services provided, health care inflation, and life expectancy. The Congressional Budget Office (CBO) estimates that total Medicare spending in 2019 will be about $772 billion; of this amount, about $749 billion will be spent on benefits. (See Figure 1.) Figure I. Projected Medicare Benefit Spending by Category, FY2019 U PartA Fa rtA and/or B Part S D escp Part C I Part D led Nursing e Faciities 3 Home Health Hospital Outpatient Services Total Benefit Spending = $749 billion Source: CRS figure based on CBO, May 2019 Medicare Baseline. Notes: Totals may not add to 100% due to rounding. CBO estimates that the federal portion of Medicare spending (after deduction of beneficiary premiums and other offsetting receipts) will be close to $637 billion in 2019, accounting for about 14% of total federal spending and 3% of GDP. Over the next 10 years, Medicare spending is expected to almost double due mainly to growing enrollment and increasing health care costs. Eligibility and Enrollment Most persons aged 65 or older are automatically entitled to premium-free Part A because they or their spouses paid Medicare payroll taxes for at least 10 years. Persons under the age of 65 who receive cash disability benefits from Social Security for at least 24 months and individuals of any age with end-stage renal disease (ESRD) are also entitled to Medicare Part A. Eligible individuals who are not entitled to premium-free Part A may obtain coverage by paying a monthly premium. All persons entitled to Part A may enroll in Part B by paying a monthly premium ($135.50 in 2019). Some Part B enrollees may pay less due to a hold-harmless provision in the Social Security Act. Beneficiaries with high incomes pay higher premiums, whereas those with low incomes may qualify for premium assistance through their state Medicaid programs. tps:lcrreportscongress gov

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