Question

Problem 1. Medicare is a national health insurance program for the elderly (aged 65 or above) in the U.S. , providing coverage to over 55 million individuals. The purposeof this problem is to familiarize you with some details on the structure and operation of Medicare.

a. Why is Medicare generally regarded an “entitlement” program? Is there any eli- gibility criteria other than age? (Note : a firm grasp of the nature of entitlement programsis of critical importance if one wants to understand how various social welfare programs work.)

b. What are the major components ( “parts” ) of Medicare and what types of services are covered under each component?

c. Which of the components you mentioned in part b are mandatory? Do Medi- care beneficiaries pay premiums for these components? (Hint: discuss how eachcomponent is funded.)

Answer 1

TO ANSWER THIS QUESTION FIRST OF ALL WE HAVE TO KNOW WHAT IS ENTITLEMENT PROGRAM?

ENTITLEMENT PROGRAM :- THESE ARE THE PROGRAMMES IN WHICH GUARANTEED BENEFITS ARE PROVIDED TO THE CITIZENS THROUGH SOME RIGHTS AND LEGISLATION OF THE COUNTRY. THESE PROGRAMMES ARE MAINLY SPONSORED BY THE GOVERNMENT.

(A):- MEDICARE IS REGARDED AS ENTITLEMENT PROGRAM AS IT IS GOVERNED BY THE GOVERNMENT OF THE U.S.A WHICH PROVIDE BENEFITS TO THE SENIOR CITIZENS OF THE COUNTRY, DISABLES AND WHO ARE UNEMPLOYED. AS IT IS A KIND OF WELFARE PROGRAM SO ALSO REGARDED AS ENTITLEMENT PROGRAM.

ELIGIBILITY CRITERIA FOR MEDICARE:- IT DEPENDS ON TWO TYPES OF INSURANCE AS:-

MEDICARE PART- A (HOSPITAL INSURANCE):- THE ELIGIBILITY FOR THIS INCLUDES:-

• AGE 65 OR OLDER
• DISABLED:- A PERSON IS ENTITLED TO THESE BENEFITS AFTER BEING DISABLED FOR 29 MONTHS.
• END STAGE RENAL DISEASE:- IT BEGINS AT THE MONTH IN WHICH REGULAR DIALYSIS BEGINS.

MEDICARE PART-B (MEDICAL INSURANCE):- THE ELIGIBILITY FOR THIS INCLUDES:

• AGE 65 OR OLDER
• U.S CITIZEN OR RESIDENT

(B):- MAJOR COMPONENTS (PARTS) OF MEDICARE:- THE MEDICARE HAS MAINLY FOUR MAIN COMPONENTS A, B, C, D WHICH ARE BRIEFLY ELLABORATED AS UNDER:

1. PART A ( HOSPITAL INSURANCE):- THIS ENTITLEMENT IS PROVIDED TO THE PERSON WITHOUT ANY CHARGE. IT INCLUDES:-

• PAYMENT OF HOSPITAL AND FACILITY COST SUCH AS ROOM COST, MEALS, HOSPITAL AND HOSPICE SKILLED NURSING FACILITIES.

2. PART B (MEDICAL INSURANCE):- IT COVERS DOCTOR AND MEDICAL EXPENSES AN DTHE AMONUT IS DEDUCTED FORM YOUR SOCIAL SECURITY CHECK. PART B IS VOLUNTARILY TAKEN ENTITLEMENT. IT INCLUDES:-

• DOCTOR VISITS AND OUTPATIENT PROCEDURES.
• ALSO COVERS SOME PREVENTIVE CARE PROVIDED TO THE PERSON.

3. PART C:- ALSO KNOWN AS MEDICARE ADVANTAGE PLAN. IT IS MAINLY PROVIDED BY PRIVATE HEALTH INSURANCE COMPANIES. IT INCLUDES BOTH PLAN-A AND PLAN-B FACILITIES. IT INCLUDES PREVENTIVE DENTAL, HEARING AND VISION COSTS.

4. PART D:- IT IS ALSO KNOWN AS PRESCRIPTION DRUG PLAN AND IT MAINLY COVERS AND PAY FOR ONLY BRAND-NAME AND GENERIC DRUGS. IT IS ALSO PROVIDED BY PRIVATE HEALTH INSURANCE COMPANIES.

(C):- PART A IS MANDATORY IN THE MEDICARE.

• THE MEDICARE BENEFICIARIES PAY PREMIUM ONLY FOR PART-B AS IT IS VOLUNTARILY. THE BENEFICIARIES ENROLL VOLUNTARILY IN THIS PROGRAM AND BY THE GOVERNMENTWHICH CONTRIBUTES FROM GENERAL REVENUE. THESE CONTRIBUTIONS ARE SAVED IN SEPARATE ACCOUNT KNOWN AS FEDERAL SUPPLEMENTARY MEDICAL TRUST FUND. IN TIME OF NEED HT MONEY IS USED FROM THIS FUND FOR PART-B BENEFITS.

EACH COMPONENT IS FUNDED AS FOLLOWS:

1. PART-A IS FUNDED BY A REVENUE FROM A 2.9% PAYROLL TAX LEVIED O EMPLOYERS AND WORKERS.
2. PART-B AND PART-D IS FUNDED BY THE PREMIUMS DEPOSITED BY THE BENEFICIARIES. MAINLY HIGHER INCOME SENIORS PAY FOR THIS.
3. PART C INCLUDES BOTH PART-A AND PART-B AND ALSO FUNDED IN SAME WAY AS PART-A AND PART-B.