Ways and Means Committee Print WMCP:106-14]
[2000 Green Book]
[From the U.S. Government Printing Office Online via GPO Access]

                 BENEFITS AND BENEFICIARY COST SHARING

                                 Part A

    Part A coverage includes:
    Inpatient hospital care.--The first 60 days of inpatient 
hospital services in a benefit period are subject to a 
deductible ($776 in calendar year 2000). A benefit period 
begins when a patient enters a hospital and ends when he has 
not been in a hospital or SNF for 60 days. For days 61-90 in a 
benefit period, a coinsurance amount ($194 in calendar year 
2000) is imposed. When more than 90 days are required in a 
benefit period, a patient may elect to draw upon a 60-day 
lifetime reserve. A coinsurance amount ($388 in calendar year 
2000) is imposed for each reserve day.
    Skilled nursing facility care.--SNF care is up to 100 days 
(following hospitalization) in an SNF for persons in need of 
continued skilled nursing care and/or skilled rehabilitation 
services on a daily basis. After the first 20 days, there is a 
daily coinsurance ($97 in calendar year 2000) amount.
    Home health care.--Home health visits are provided to 
persons who need skilled nursing care on an intermittent basis, 
or physical therapy, or speech therapy. The Balanced Budget Act 
(BBA) of 1997 gradually transfers from part A to part B home 
health visits that are not part of the first 100 visits 
following a beneficiary's stay in a hospital or SNF (i.e., 
postinstitutional visits) and during a home health spell of 
illness. The transfer is being phased in over 6 years, between 
1998 and 2003, with the Secretary transferring one-sixth of the 
aggregate expenditures associated with transferred


                    TABLE 2-2.--NUMBER OF AGED AND DISABLED ELIGIBLE ENROLLEES AND BENEFICIARIES, AND AVERAGE MEDICARE BENEFIT PAYMENTS PER ENROLLEE, SELECTED YEARS 1975-99
                                                                                  [Beneficiaries in thousands]
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                                                                                                                                                                                       Projected
                                                                                                                                                                  Average    Average    average
                                                                     1975      1980      1985      1990      1995      1998      1999       2000        2001       annual     annual     annual
                           Fiscal year                             (actual)  (actual)  (actual)  (actual)  (actual)  (actual)  (actual)  (est.) \1\  (est.) \1\    growth     growth     growth
                                                                                                                                                                  1975-85    1985-95   1995-2001
                                                                                                                                                                 (percent)  (percent)  (percent)
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
                              Part A

Persons enrolled (monthly average):
    Aged.........................................................    21,795    24,572    27,121    30,050    32,649    33,384    33,585     33,816      34,059        2.2        1.9        0.7
    Disabled.....................................................     2,047     2,968     2,944     3,313     4,366     5,070     5,259      5,445       5,643        3.7        4.0        4.4
                                                                  ------------------------------------------------------------------------------------------------------------------------------
      Total......................................................    23,842    27,540    30,065    33,363    37,015    38,454    38,844     39,261      39,702        2.3        2.1        1.2
                                                                  ==============================================================================================================================
Average annual benefit per person enrolled: \2\ \3\
    Aged.........................................................      $432      $853    $1,563    $1,947    $3,078    $3,550    $3,366     $3,331      $3,577       13.7        7.0        2.5
    Disabled.....................................................       460       948     1,808     2,176     2,955     3,118     3,055      3,042       3,195       14.7        5.0        1.3
                                                                  ------------------------------------------------------------------------------------------------------------------------------
      Total......................................................       434       863     1,587     1,970     3,063     3,493     3,324      3,291       3,523       13.8        6.8        2.4
                                                                  ==============================================================================================================================
                              Part B

Persons enrolled (average):
    Aged.........................................................    21,504    24,422    27,049    29,426    31,622    32,257    32,350     32,550      32,759        2.3        1.6        0.6
    Disabled.....................................................     1,835     2,698     2,672     2,907     3,874     4,422     4,582      4,730       4,892        3.8        3.8        4.0
                                                                  ------------------------------------------------------------------------------------------------------------------------------
      Total......................................................    23,339    27,120    29,721    32,333    35,496    36,679    36,932     37,280      37,651        2.4        1.8        1.0
                                                                  ==============================================================================================================================
Average annual benefit per person enrolled: \2\
    Aged.........................................................       153       348       705     1,250     1,728     1,989     2,108      2,395       2,628       16.5        9.4        7.2
    Disabled.....................................................       259       610     1,022     1,603     2,282     2,623     2,388      2,667       2,897       14.7        8.4        4.1
                                                                  ------------------------------------------------------------------------------------------------------------------------------
      Total......................................................       161       374       734     1,282     1,788     2,066     2,143      2,430       2,663       16.4        9.3        6.9
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
\1\ Represents projections of current law. Does not include legislative proposals.
\2\ Does not include administrative cost.
\3\ Includes part A catastrophic benefits in fiscal year 1990.

Source: Health Care Financing Administration, Division of Budget Formulation.


                                                                  TABLE 2-3.--BENEFIT PAYMENTS BY SERVICE UNDER MEDICARE PARTS A AND B, SELECTED FISCAL YEARS 1975-2001
                                                                                                        [In millions of dollars]
----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                   1975               1980               1985             1990 \1\             1995          2000 (est.) \2\    2001 (est.) \2\    Average annual     Projected average
                                                            -------------------------------------------------------------------------------------------------------------------------------------    growth rate     annual growth rate
                          Service                                                                                                                                                                     (percent)           (percent)
                                                             Percent   Amount  Percent   Amount   Percent   Amount   Percent   Amount   Percent    Amount   Percent   Amount   Percent   Amount  ---------------------------------------
                                                                                                                                                                                                  1975-85  1985-95  1995-2000  1995-2001
----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
                           Part A

Inpatient hospital.........................................     70.5   $9,947     67.4   $22,877     65.0   $45,218     55.3   $59,285     49.4    $87,449     40.0   $87,930     38.3   $91,932    16.3      6.8        0.1        0.8
Skilled nursing facility...................................      1.9      273      1.2       392      0.8       550      2.6     2,821      5.1      9,104      5.7    12,598      6.2    14,823     7.3     32.4        6.7        8.5
Home health \3\............................................      0.9      133      1.5       524      2.7     1,908      3.1     3,297      8.5     14,995      1.8     3,876      1.5     3,504    30.5     22.9      -23.7      -21.5
Hospice....................................................        0        0        0         0        0        34      0.3       318      1.0      1,854      1.2     2,597      1.1     2,730      NA     49.2        7.0        6.7
Managed care...............................................        0    (\4\)        0     (\4\)        0     (\4\)        0     (\4\)        0      (\4\)     10.1    22,215     11.2    26,880      NA       NA         NA         NA
                                                            ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------
    Total benefit payments.................................     73.3   10,353     70.1    23,793     68.6    47,710     61.3    65,721     64.1    113,402     58.8   129,216     58.2   139,869    16.5      9.0        2.7        3.6
                                                            ============================================================================================================================================================================
                           Part B

Physician..................................................     21.7    3,067     23.0     7,813     24.1    16,788     27.0    28,920    (\5\)      (\5\)    (\5\)     (\5\)    (\5\)     (\5\)    18.5    (\5\)      (\5\)      (\5\)
Outpatient.................................................      3.7      529      5.3     1,803      5.6     3,917      7.8     8,365    (\5\)      (\5\)    (\5\)     (\5\)    (\5\)     (\5\)    22.2    (\5\)      (\5\)      (\5\)
Home health................................................      0.5       75      0.7       232      0.1        40      0.3        75    (\5\)      (\5\)    (\5\)     (\5\)    (\5\)     (\5\)    -6.1    (\5\)      (\5\)      (\5\)
Other medical and health...................................      0.7       94      0.9       296      1.5     1,063      3.8     4,090    (\5\)      (\5\)    (\5\)     (\5\)    (\5\)     (\5\)    27.5    (\5\)      (\5\)      (\5\)
Physician fee schedule.....................................    (\5\)    (\5\)    (\5\)     (\5\)    (\5\)     (\5\)    (\5\)     (\5\)     17.6     31,101     16.2    35,619     15.3    36,647   (\5\)    (\5\)        2.8        2.8
Durable medical equipment..................................    (\5\)    (\5\)    (\5\)     (\5\)    (\5\)     (\5\)    (\5\)     (\5\)      2.0      3,576      2.0     4,443      2.0     4,714   (\5\)    (\5\)        4.4        4.7
Carrier laboratory \6\.....................................    (\5\)    (\5\)    (\5\)     (\5\)    (\5\)     (\5\)    (\5\)     (\5\)      1.6      2,819      0.9     2,038      0.9     2,062   (\5\)    (\5\)       -6.3       -5.1
Other carrier..............................................    (\5\)    (\5\)    (\5\)     (\5\)    (\5\)     (\5\)    (\5\)     (\5\)      2.6      4,513      3.1     6,852      3.1     7,343   (\5\)    (\5\)        8.7        8.4
Hospital \7\...............................................    (\5\)    (\5\)    (\5\)     (\5\)    (\5\)     (\5\)    (\5\)     (\5\)      4.8      8,449      4.1     9,087      4.7    11,356   (\5\)    (\5\)        1.4        5.1
Home health \3\............................................    (\5\)    (\5\)    (\5\)     (\5\)    (\5\)     (\5\)    (\5\)     (\5\)      0.1        223      2.6     5,790      2.9     6,884   (\5\)    (\5\)       91.8       77.1
Intermediary laboratory \8\................................    (\5\)    (\5\)    (\5\)     (\5\)    (\5\)     (\5\)    (\5\)     (\5\)      0.8      1,437      0.7     1,607      0.7     1,667   (\5\)    (\5\)        2.3        2.5
Other intermediary \9\.....................................    (\5\)    (\5\)    (\5\)     (\5\)    (\5\)     (\5\)    (\5\)     (\5\)      2.9      5,111      2.7     6,037      2.7     6,511   (\5\)    (\5\)        3.4        4.1
Managed care...............................................    (\5\)    (\5\)    (\5\)     (\5\)    (\5\)     (\5\)    (\5\)     (\5\)      3.5      6,253      8.7    19,102     9.63    23,089   (\5\)    (\5\)       25.0       24.3
                                                            ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------
    Total benefit payments.................................     26.7    3,765     29.9    10,144     31.4    21,808     38.7    41,450     35.9     63,482     41.2    90,574     41.8   100,273    19.2     11.3        7.4        7.9
                                                            ============================================================================================================================================================================
    Total parts A and B....................................    100.0   14,118    100.0    33,937    100.0    69,518    100.0   107,171    100.0    176,884    100.0   219,790  .......   240,142    17.3      9.8        4.4        5.2
----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
\1\ Includes part A catastrophic benefits in fiscal year 1990.
\2\ Represents current law. Does not include legislative proposals.
\3\ Reflects the Balanced Budget Act of 1997's partial shift of home health to part B, beginning January 1, 1998.
\4\ Part A managed care amounts for fiscal years 1995 and earlier are reflected within the four other service categories.
\5\ Service categories were revised beginning in 1992.
\6\ Laboratory services paid under the laboratory fee schedule performed in a physician's office laboratory or an independent laboratory.
\7\ Includes the hospital facility costs for Medicare part B services which are predominantly in the outpatient department. The physician reimbursement associated with these services is included on the ``physician fee schedule''
  line.
\8\ Laboratory fee services paid under the laboratory fee schedule performed in a hospital outpatient department.
\9\ Includes end-stage renal disease (ESRD) freestanding dialysis facility payments and payments to rural health clinics, outpatient rehabilitation facilities, psychiatric hospitals, and federally qualified health centers.

NA--Not available.

Note.--Totals may not add due to rounding.

Source: Health Care Financing Administration, Division of Budget Formulation.


                TABLE 2-4.--MEDICARE ESTIMATED BENEFIT PAYMENTS, ENROLLMENT, AND PAYMENTS PER ENROLLEE, BY JURISDICTION, FISCAL YEAR 1998
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                                                                                                                                               Estimated
                                                                                                           Total estimated     HI and/or SMI   payments
                             State                                 Managed care       Fee for service      benefit payments      Medicare         per
                                                                                                                                enrollment     enrollee
--------------------------------------------------------------------------------------------------------------------------------------------------------
Alabama.......................................................        $205,426,344       $3,355,291,164       $3,560,717,508         662,299      $5,376
Alaska........................................................                  NA          159,758,199          159,758,199          36,522       4,374
Arizona.......................................................       1,239,778,917        1,745,752,051        2,985,530,968         636,450       4,691
Arkansas......................................................          49,224,065        1,879,525,269        1,928,749,334         431,020       4,475
California....................................................       8,773,118,477       13,784,518,629       22,557,637,106       3,738,081       6,035
Colorado......................................................         643,203,173        1,635,431,750        2,278,634,923         442,452       5,150
Connecticut...................................................         400,112,935        2,728,217,584        3,128,330,518         507,927       6,159
Delaware......................................................                  NA          405,179,514          405,179,514         105,693       3,834
District of Columbia..........................................         144,373,478          777,918,684          922,292,162          78,151      11,801
Florida.......................................................       4,524,774,836       13,378,150,436       17,902,925,272       2,727,545       6,564
Georgia.......................................................         176,623,168        4,110,432,452        4,287,055,620         869,443       4,931
Hawaii........................................................         239,875,943          398,863,192          638,739,135         156,103       4,092
Idaho.........................................................          10,980,148          589,589,258          600,569,407         155,810       3,854
Illinois......................................................         834,190,968        7,656,027,597        8,490,218,565       1,622,181       5,234
Indiana.......................................................          65,964,275        4,197,139,053        4,263,103,328         835,183       5,104
Iowa..........................................................          12,850,611        1,797,001,383        1,809,851,994         475,786       3,804
Kansas........................................................          25,109,448        1,783,589,354        1,808,698,803         387,589       4,667
Kentucky......................................................          53,879,786        2,843,156,472        2,897,036,258         602,570       4,808
Louisiana.....................................................         538,912,807        3,754,572,687        4,293,485,495         592,543       7,246
Maine.........................................................             366,850          792,926,706          793,293,556         207,784       3,818
Maryland......................................................         517,992,313        3,123,552,630        3,641,544,943         619,700       5,876
Massachusetts.................................................       1,117,102,982        4,689,557,576        5,806,660,558         946,879       6,132
Michigan......................................................         257,643,533        7,452,965,590        7,710,609,123       1,369,629       5,630
Minnesota.....................................................         355,714,448        2,442,292,853        2,798,007,301         639,293       4,377
Mississippi...................................................                  NA        2,216,407,663        2,216,407,663         407,440       5,440
Missouri......................................................         602,636,855        4,092,810,974        4,695,447,829         844,920       5,557
Montana.......................................................           4,359,566          529,898,775          534,258,341         133,089       4,014
Nebraska......................................................          54,981,437        1,024,707,802        1,079,689,239         251,029       4,301
Nevada........................................................         399,145,276          706,198,480        1,105,343,755         213,742       5,171
New Hampshire.................................................          43,577,945          603,936,891          647,514,836         161,759       4,003
New Jersey....................................................         697,261,271        6,210,460,644        6,907,721,916       1,182,204       5,843
New Mexico....................................................         167,306,872          662,125,184          829,432,056         221,061       3,752
New York......................................................       2,592,564,064       14,472,498,088       17,065,062,152       2,651,677       6,436
North Carolina................................................          87,759,036        5,207,921,577        5,295,680,613       1,073,564       4,933
North Dakota..................................................           1,024,727          479,367,786          480,392,514         102,764       4,675
Ohio..........................................................       1,175,552,456        7,658,951,361        8,834,503,816       1,683,167       5,249
Oklahoma......................................................         170,664,498        2,201,883,236        2,372,547,734         497,066       4,773
Oregon........................................................         679,992,754        1,151,812,303        1,831,805.057         477,022       3,840
Pennsylvania..................................................       2,783,739,255       10,399,395,849       13,183,135,104       2,084,565       6,324
Puerto Rico...................................................                  NA        1,085,621,690        1,085,621,690         502,760       2,159
Rhode Island..................................................         222,688,282          799,438,068        1,022,126,351         169,359       6,035
South Carolina................................................           8,107,599        2,555,180,022        2,563,287,620         534,827       4,793
South Dakota..................................................                  NA          503,514,478          503,514,478         117,931       4,270
Tennessee.....................................................          69,099,978        4,659,088,195        4,728,188,173         796,692       5,935
Texas.........................................................       1,566,883,357       13,099,231,346       14,666,114,703       2,162,917       6,781
Utah..........................................................         100,786,356          787,529,116          888,315,472         195,326       4,548
Vermont.......................................................           1,282,393          287,952,764          289,235,157          85,562       3,380
Virginia......................................................          61,555,988        3,595,463,713        3,657,019,701         849,493       4,305
Washington....................................................         735,189,539        2,147,994,124        2,883,183,663         708,607       4,069
West Virginia.................................................          13,047,291        1,515,162,298        1,528,209,589         333,217       4,586
Wisconsin.....................................................          89,029,594        3,178,402,378        3,267,431,972         770,405       4,241
Wyoming.......................................................                  NA          218,451,250          218,451,250          62,654       3,487
Outlying areas................................................                  NA           53,543,743           53,543,743         323,287         166
                                                               -----------------------------------------------------------------------------------------
    Total all areas...........................................      32,515,455,895      177,586,359,882      210,101,815,777      38,444,739       5,465
--------------------------------------------------------------------------------------------------------------------------------------------------------
NA--Not available.

Source: Health Care Financing Administration, Office of Information Services.


visits in 1998; two-sixths in 1999; three-sixths in 2000; four-
sixths in 2001; five-sixths in 2002; and six-sixths in 2003. 
Beginning January 1, 2003, part A will cover only 
postinstitutional home health services for up to 100 visits 
during a home health spell of illness, except for those persons 
with part A coverage only, who will be covered for services 
without regard to the postinstitutional limitation.
    Hospice care.--Hospice care services are provided to 
terminally ill Medicare beneficiaries with a life expectancy of 
6 months or less for two 90-day periods, followed by an 
unlimited number of 60-day periods. The medical director or 
physician member of the hospice interdisciplinary team must 
recertify, at the beginning of 60-day periods, that the 
beneficiary is terminally ill.

                                 Part B

    Part B of Medicare generally pays 80 percent of the 
approved amount (fee schedule, reasonable charge, or reasonable 
cost) for covered services in excess of an annual deductible 
($100). Services covered include:
    Doctor's services.--This category includes surgery, 
consultation, and home, office and institutional visits. 
Certain limitations apply for services rendered by dentists, 
podiatrists, and chiropractors and for the treatment of mental 
illness.
    Other medical and health services.--This category includes 
laboratory and other diagnostic tests, x ray and other 
radiation therapy, outpatient hospital services, rural health 
clinic services, DME, home dialysis supplies and equipment, 
artificial devices (other than dental), physical and speech 
therapy, and ambulance services.
    Specified preventive services.--These services include: an 
annual screening mammography for all women over age 40; a 
screening Pap smear and a screening pelvic exam once every 3 
years, except for women who are at a high risk of developing 
cervical cancer; specified colorectal screening procedures; 
diabetes self-management training services; bone mass 
measurements for high-risk persons; and prostate cancer 
screenings.
    Drugs and vaccines.--Generally Medicare does not pay for 
outpatient prescription drugs or biologicals. Part B pays for 
immunosuppressive drugs for a minimum of 36 months following a 
covered organ transplant, erythropoietin (EPO) for treatment of 
anemia for persons with chronic kidney failure, and certain 
oral cancer drugs. The program also covers flu shots, 
pneumococcal pneumonia vaccines, and hepatitis B vaccines for 
those at risk.
    Home health services.--Home services include an unlimited 
number of medically necessary home health visits for persons 
not covered under part A. The 20-percent coinsurance and $100 
deductible do not apply for such benefits. As noted above, BBA 
1997 gradually transfers some home health costs from part A to 
part B, beginning in 1998.
    Table 2-5 illustrates the deductible, coinsurance and 
premium amounts for both part A and part B services from the 
inception of Medicare.