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Medicare

Providing Health Care Coverage for 2.1 Million Ohioans

Medicare is the federal health insurance program for Ohioans who are 65 or older, certain younger people with disabilities and people with end-stage renal disease. More than 2.1 million Ohioans, or 18.5 percent of the population, are enrolled in Medicare.

Medicare assists in paying for hospitalizations, physician visits, prescription drugs, post-acute care, skilled nursing facility care, home health and hospice care, and preventive services.

FINANCE NEWS - MEDICARE

Connect here to view Medicare-specific Finance News prepared by OHA's Health Economics & Policy team.

MEDICARE AND OHIO HOSPITALS

Medicare is the largest payer of health care bills to Ohio hospitals — but reimburses about 95 cents for every dollar of care provided to Ohio’s elderly and disabled patients. Spending for this federal health insurance accounted for 15 percent of total federal spending in 2016 and 20 percent of total national health spending in 2015.

Payment rates are set annually by the federal government. Hospitals have little ability to negotiate reimbursement rates.

VARIOUS ELEMENTS OF MEDICARE

Most hospital services are covered or partially covered by Medicare. Beneficiaries often choose to obtain supplemental insurance plans for services and items not covered by Medicare. These plans are called Medigap policies, and include:
  • Hospital Insurance (Part A): Covers 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): Covers any 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 managed care plans, that offer Parts A, B, & D benefits, often in conjunction with additional benefits.
  • Prescription Drug Coverage (Part D): This optional program provides coverage to help seniors pay for prescription drugs. 

MEDICARE DSH PAYMENTS

Medicare Disproportionate Share Hospital Program, or DSH, payment adjustments compensate hospitals for the higher operating costs they incur treating a large share of vulnerable low-income patients. DSH funds preserve access to care for Medicare and low-income populations by financially assisting the hospitals they use.

Low-income Medicare patients tend to be sicker and more costly to treat than other Medicare patients with the same diagnosis. Higher costs also result from the need for additional staffing and services, such as translators and social workers, to care for low-income patients.

Ohio hospitals earned $103 million in DSH payments in 2016, yet still posted a loss of $1.2 billion on services provided to Medicare beneficiaries based on the federal reimbursement rates.