Medicare is federal health insurance for people age 65 or older, under 65 with certain disabilities and any age with End Stage Renal Disease (permanent kidney failure) requiring dialysis or a kidney transplant.
Most beneficiaries (87 percent) are aged 65 and above and automatically qualify for Medicare. Disabled persons who receive Social Security payments usually become eligible after a two-year waiting period. Of Medicare beneficiaries, 40 percent have incomes at or below twice the poverty level. Payments are set annually by the federal government and hospitals have little ability to negotiate Medicare reimbursement.
One in six Ohioans were enrolled in Medicare in 2013. 83 percent of all Ohio Medicare beneficiaries are over 65. Ohio Medicare enrollment increased 21 percent between 2000 and 2013, growing from 1.69 million to 2.06 million Ohioans.
Most hospital services are covered or partially covered. Beneficiaries often choose to obtain supplemental insurance plans for services and items not covered by Medicare. These plans are called “Medigap” policies.
“Hospital Insurance” (Part A): Inpatient hospital services, nursing home care and hospice. Part A coverage is automatic for beneficiaries and is financed by a payroll tax on both employers and employees
“Supplemental Medical Insurance” (Part B): Many outpatient services, laboratory tests, physician services and medical devices. Part B is optional coverage and is generally paid through beneficiaries’ monthly premium
“Medicare Advantage” (Part C): Optional and paid through premiums, this includes private plans such as HMOs that offer Parts A, B, & D benefits, often in conjunction with additional benefits
“Prescription Drug Coverage” (Part D): Optional program that provides insurance to help seniors pay for prescription drugs
Medicare and Ohio Hospitals
Medicare reimburses Ohio hospitals 89 cents for each dollar it costs to treat Medicare patients. In 2013, Medicare losses for Ohio hospitals totaled $691.7 million.
Medicare and Healthcare Reform
The Affordable Care Act (ACA) requires a number of Medicare payment cuts to hospitals. OHA anticipates that Medicare payments to Ohio hospitals will be cut by $12.9 billion by CMS' use of smaller than scheduled annual updates and coding adjustments in the years from 2012-2024. According to the American Hospital Association, hospitals' Medicare and Medicaid payments have already been cut by $113 billion nationwide since 2010 as a result of the ACA and other regulatory actions.
In addition, hospitals will lose $2.1 billion to bad debt as a result of the Middle Class Tax Relief and Job Creation Act of 2012 and $12.2 billion to Medicaid disproportionate share hospital payment cuts included in the Middle Class Tax Relief and Job Creation Act of 2012, the American Taxpayer Relief Act of 2012 and the Bipartisan Budget Act of 2013.
View MedPAC Medicare Payment Basics
for all provider types.
View CMS Guided Pathways to Medicare Resources
View CMS Quarterly Compliance Newsletters