What is the Medicare Catastrophic Coverage Act of 1988?
On July 1, 1988, the Medicare Catastrophic Coverage Act of 1988 (Public Law 100-360) became law. This bill expands Medicare benefits to include outpatient drugs and caps enrollees' copayment costs for other covered services.
What year was the Medicare Catastrophic Coverage Act of 1988 repealed?
1989Our conclusions are based on a representative national telephone survey of 500 Medicare beneficiaries conducted in spring 1989, just over halfway between the time the legislation was signed (July 1988) and eventually repealed (November 1989).
What is Medicare catastrophic coverage?
Catastrophic coverage is a phase of coverage designed to protect you from having to pay very high out-of-pocket costs for prescription drugs. It usually begins after you have spent a pre-determined amount on your health care. For example, Part D prescription drug plans offer catastrophic coverage.
What did the Medicare Modernization Act do?
The 2003 Medicare Modernization Act (MMA) is considered one of the biggest overhauls of the Medicare program. It established prescription drug coverage and the modern Medicare Advantage program, among other provisions. It also created premium adjustments for low-income and wealthy beneficiaries.
What are the updates for a bill?
You will get updates for major actions that take place on this bill and some related bills. Major actions include if this bill gets a new cosponsor, has a hearing scheduled, is reported by committee, scheduled for debate, voted on, or enacted, or if the bill's text is incorporated into another bill that is enacted. You will also get updates when bill's text becomes available and when we write a summary of the legislation.
How many bills are reported out of committee?
A committee has voted to issue a report to the full chamber recommending that the bill be considered further. Only about 1 in 4 bills are reported out of committee.
Why did Congress retract the Medicare Catastrophic Coverage Act of 1988?
Key Takeaways. A year after enacting the Medicare Catastrophic Coverage Act of 1988, Congress was forced to retract the legislation due to widespread criticism. Some found the wording of the bill regarding payment structures to be confusing, and so they pushed against it. Many people find it hard to support changes to Medicare taxation as they feel ...
When did Medicare catastrophic coverage start?
The Medicare Catastrophic Coverage Act of 1988 (MCAA) was a government bill designed to improve acute care benefits for the elderly and disabled, which was to be phased in from 1989 to 1993.
What is Medicare pay?
Medicare is a complex and weighty federal program that taxpayers help pay for with Medicare wages. These are generally taken out of the paychecks of U.S. employees on a regular basis. Controllers and individuals withhold a percentage from annual income. 5
How much will Medicare cost in 2021?
The average premium in 2022 for Medicare Advantage plans will be $19 per month versus $21.22 in 2021. 7
What is the Medicare tax rate for 2021?
For 2021, the Medicare tax rate is 1.45% for the employee and 1.45% for the employer, or a total of 2.9%. Employers are responsible for withholding the 0.9% Additional Medicare Tax on an employee's wages that exceed $200,000 in a calendar year, regardless of filing status. There's no employer match for Additional Medicare Tax. 6 .
Why was the MCCA progressive?
The MCCA was a supplemental premium that individuals eligible for Medicare Part A paid to finance the expanded coverage because of high federal budget deficits at the time. This supplemental premium was progressive, meaning that payments were gradual. 3 For this reason, it was designed not to cause hardship for less wealthy enrollees.
Is there a match for Medicare tax?
There's no employer match for Additional Medicare Tax. 6 . Medicare tax is similar to Social Security tax, which is also taken out of employees’ paychecks. For 2021, the Social Security tax is 6.2% on the first $142,800 of wages. 7 Employers also pay a 6.2% tax on behalf of employees. The Social Security tax rate is assessed on all types ...
When did the Medicare catastrophe coverage act start?
The Medicare Catastrophic Coverage Act of 1988
What was the purpose of the Catastrophic Coverage Act of 1986?
The Medicare Catastrophic Coverage Act is the offspring of the Secretary's proposals to deal with the first aspect of the problem, that of acute-care costs for the elderly and disabled. It expands Medicare (and Medicaid) benefits, but maintains the acute-care nature of the Medicare program. The new Medicare benefits enacted by the Congress are considerably greater than the expansion proposed by the Secretary, however--a 7 percent increase when fully implemented, instead of 3 percent. Higher benefits result primarily from a lower cap on copayment costs and from the addition of coverage for prescription drug costs. The act conforms to the Secretary's original proposal in that the costs of the new Medicare benefits are to be financed entirely by Medicare enrollees. Under the original proposal, costs would have been financed by additional fixed monthly premiums paid by all enrollees. As passed by the Congress, 37 percent of costs are to be financed by fixed monthly premiums. The remaining costs are to be financed by an income-related "supplemental premium"--an income surtax that will affect less than half of enrollees. This income- related mechanism represents a major change in Medicare's financing. This paper has four sections. The first section describes the new Medicare and related Medicaid benefits, in comparison to benefits as they were prior to passage of the act. The second section describes the financing provisions under the act. The third section simulates the impact the benefit and financing provisions would have had on Medicare enrollees if the provisions of the act had been fully effective throughout 1988. The fourth section concludes the discussion. BENEFITS
What percentage of Medicare enrollees have supplementary coverage?
12 About 72 percent of Medicare enrollees currently have health benefits supplementary to Medicare, however, and the impact of the act on enrollees is affected by this supplementary coverage. The estimates shown in Tables 5-11 incorporate not only the effects of Medicare, but also of private medigap insurance and of Medicaid.12/ The adjustments made for enrollees' supplementary coverage are summarized below. Medigap Insurance. About 62 percent of Medicare enrollees currently have medigap insurance designed to pick up most of their current Medicare copayment costs.13/ For these enrollees, Medicare copayment costs are reduced, and premium costs (if paid directly by enrollees) are higher, compared to enrollees who do not have medigap insurance. While a variety of medigap policies exist, the paper simulates a prototype that would cover all HI copayment costs and all SMI copayment costs above the $75 deductible. Balance-billing and drug costs would not be covered. For simulation, the medigap premium was set to achieve a "loss ratio" of 75 percent, which is within the range that is typical for medigap insurers. That is, 75 percent of receipts would be paid out in benefits, while the remainder would go for administrative costs and profit. It was assumed that medigap premiums would be paid directly by enrollees, not by current or former employers. The act would have no effect on HI and SMI copayment costs for enrollees with this medigap coverage, but it would reduce their drug and medigap premium costs. Current Medicaid Coverage. About 10 percent of Medicare enrollees currently receive Medicaid benefits as well. For this group of dually eligible enrollees, there are typically no Medicare premium or copayment costs because these costs are paid by Medicaid. Further, this group would receive no new Medicare benefits under the act because the new benefits would accrue to Medicaid--reducing Medicaid costs--rather than to enrollees. New Medicaid Buy-in Coverage. Another 8 percent of Medicare enrollees--those who are poor but are not now receiving Medicaid benefits--could potentially benefit from the new Medicaid buy-in requirement, under which Medicare premium and 12. See Appendix Tables A-6 through A-11 for analogous results showing the effects of Medicare alone, for comparison to those shown in Tables 6-11. 13. Of those enrolled under both Parts A and B of Medicare, about 65 percent have medigap coverage. About a third of those with medigap insurance (or 20 percent of all Medicare enrollees) have part or all of their medigap premium costs paid by former employers.
What are the changes to Medicare in 1989?
Hospital Insurance For 1989, only Hospital Insurance (HI) benefits under Part A of Medicare will change, as follows: Hospital Inpatient Benefits. Acute-care hospital coverage will be unlimited. Medicare will pay all hospital in patient costs above an annual deductible amount ($560 for 1989) . Currently, the number of hospital days for which Medicare will pay in a single spell of illness is limited; enrollees may be liable for more than one hospital deductible; and coinsurance amounts are payable after the 60th day in each spell of illness. Skilled Nursing Facility (SNF) Benefits. The limit on SNF stays will be changed from 100 days in each spell to 150 days a year, and no prior hospital stay will be required. Coinsurance payments will be required only for the first 8 days each year, at 20 percent of average SNF costs per day ($25.50 for 1989). In 1988 under current law, coinsurance amounts of $67.50 are payable on days 21-100 in each spell of illness. Hospice Benefits. The current 210-day lifetime limit on hospice benefits will be eliminated, although a cost limit will remain. Small coinsurance requirements for drug and in- home respite expenses will continue. Effective January 1990: Home Health Benefits. The current requirement that limits coverage for home health care to intermittent visits will be relaxed, so that enrollees may receive up to 38 consecutive days of care, 7 days a week. Current interpretation of the requirement that home health care be intermittent limits the frequency of visits to no more than five days a week, for up to three consecutive weeks. There is no limit on the overall number of visits and no coinsurance requirement for home health visits currently; this would not change under the act. Supplementary Medical Insurance
How is Medicare financed?
FINANCING The cost of new Medicare benefits will be financed by additional premiums paid by enrollees. If Congressional projections of costs and enrollees' tax liabilities are realized, 37 percent of new Medicare costs will be covered by additional fixed monthly premiums paid by all Part B enrollees. The remaining 63 percent of costs will be covered by new income-related supplemental premiums. The supplemental premium will be payable by all those eligible for Part A benefits for at least six months of the year who have at least $150 in annual tax liability and who reside in one of the 50 states or the District of Columbia.5/ Liability for the monthly premium could be avoided by disenrolling from Part B; liability for the supplemental premium would be unaffected by disenrollment. For 1989 through 1993, the new monthly and supplemental premium rates are set by law, at levels sufficient to cover projected costs plus a contingency margin to allow for projection error. For 1994 and subsequent years, rates will be increased from the previous year based on the historical growth in costs. For example, the increase in 1994 rates over 1993 values will reflect growth in costs for 1992 over 1991. In addition, rates will incorporate an adjustment to correct for inadequate or excess receipts in previous years, based on account balances at the end of the preceding year. That is, the Administration will look back to account balances at the end of 1992 in setting 1994 rates. In 1989, Part B enrollees will pay a new monthly premium of $4.00 for new benefits under the act, in addition to the basic SMI premium of $27.90, for a total Part B premium of $31.90. As new benefits are phased in, the new monthly premium will increase annually, reaching a value of $10.20 in 1993, when the total monthly Part B premium is projected to be $42.60 (Table 3). In addition, in 1989 an estimated 36 percent of Part A enrollees will be liable for the supplemental premium, in the form of a 15 percent income surtax (a tax on tax liability) for those with at least $150 of annual tax liability. Each enrollee's maximum supplemental liability will be limited by a ceiling, however, set at $800 for 1989. An estimated 5 percent of enrollees will pay 5. B-only enrollees and residents of the territories or commonwealth will pay only a monthly premium for new benefits, with rates based on the insurance value of the new benefits provided to them.
What is the limit for hospice care?
Short-term skilled nursing care. Intermittent home health care. Hospice care for terminally ill. Limits Hospital stays limited to 90 days per spell of illness, plus up to 60 lifetime reserve days (with lifetime limit of 190 days for inpatient psychiatry). SNF stays limited to 100 days per spell, covered only subsequent to hospital stay of at least 3 days. Lifetime limit of 210 days for hospice. Consecutive days of home health care limited to 21. Oeductibles Inpatient deductible for first stay each spell. Blood deductible up to 3 units each spell. Coinsurance Hospital coinsurance paid for days 61-90 (1/4 deductible) and for reserve days (1/2 deductible). SNF coinsurance paid for days 21-100 (1/8 deductible). Hospice coinsurance of 5% of drug/respite charges. Same, with changes noted below. No limit on covered inpatient days (except for psychiatric care where 190-day limit remains). SNF limit changed to 150 days a year, and no prior inpatient stay required for coverage. No limit on hospice days. Consecutive days of home health care limited to 38. Deductible for first stay each year. Blood deductible up to 3 units a year. No hospital coinsurance. SNF coinsurance paid for days 1-8 each year (20% of daily cost).
When did Medicare become a law?
SUMMARY On July 1 , 1988, the Medicare Catastrophic Coverage Act of 1988 (Public Law 100-360) became law. This bill expands Medicare benefits to include outpatient drugs and caps enrollees' copayment costs for other covered services. New benefits will be phased in from 1989 through 1993 and will be financed entirely by enrollees' premiums, part of which will be income-related. This is the first significant expansion of benefits under the Medicare program since its inception in 1966. It represents the largest program expansion since 1973, when eligibility (previously limited to the elderly) was extended to those with permanent disabilities or with chronic renal disease. New Medicare costs projected under the act will total $30.8 billion over the five-year period from fiscal year 1989 through fiscal year 1993. Once the act is fully implemented, about 22 percent of enrollees will be entitled to higher Medicare benefits in any given year, compared to what they would have received if the act had not been passed. The fully-effective act will increase benefit payments per enrollee by about 7 percent, on average. All enrollees receive a substantial subsidy under Medicare currently, and a subsidy on total Medicare benefits will remain under the act. That is, enrollees can expect to receive lifetime Medicare benefits that exceed their payroll tax and premium contributions. This is so even for high-income enrollees, who will pay more in new premiums under the act than they can expect to receive in new benefits. This paper simulates the provisions of the act as if they were fully effective for calendar year 1988. Under the act, Medicare benefits paid per enrollee would be higher by $194, while Medicare premiums payable would be higher by $207. More than 70 percent of enrollees have supplementary "medigap" insurance or receive Medicaid benefits, however, which would alter the impact of the act for them. After adjusting for the effects of medigap insurance and Medicaid, benefits would be $130 higher under the act, on average, while total premium costs "would be higher by $114. Enrollees' benefits would increase by less than Medicare's payments because some new Medicare payments would replace current medigap benefits and because benefits would accrue to Medicaid rather than to enrollees for those who are dually eligible. Enrollees' premium costs would increase by less than Medicare premiums payable because medigap premium costs would fall and because Medicaid would pick up both current and new premium costs for poor enrollees.
Medicare Interactive
Your Bibliography: Medicare Interactive. 2016. Medicare Interactive. [online] Available at: <http://www.medicareinteractive.org/> [Accessed 22 March 2016].
Medicare.gov: the official U.S. government site for Medicare
Your Bibliography: Medicare.gov. 2016. Medicare.gov: the official U.S. government site for Medicare. [online] Available at: <http://medicare.gov> [Accessed 22 March 2016].
Sponsor and status
This bill was enacted after being signed by the President on December 13, 1989.
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History
A bill must be passed by both the House and Senate in identical form and then be signed by the President to become law.