HS 543

Health Services Finance May 11 Sec A

Course Project

The Baby Boomers Impact on Medicare

Abstract

This project will address the baby boomers impact on Medicare. Baby boomers have changed the world in which we live and the lens through which we view it. The aging of the baby boomers, which is roughly one third of the population, will continue to usher in dramatic changes across most business sectors and areas of our lives in the years to come.

The Issue

A. How is Medicare Funded?

Medicare provides health coverage for 45.2 million people. In 2008, Medicare spent $468 billion for covered items and services. Medicare is paid through two trust fund accounts held by the US Treasury. These funds can only be used for Medicare. The first trust fund is the Hospital Insurance (HI) Trust Fund. It is funded by payroll taxes paid by most employees, employers, and people who are self-employed. Other sources, such as income taxes paid on Social Security benefits, interest earned on the trust fund investments, and Part A premiums from people who are not eligible for premium free Part A. The second trust fund is the Supplementary Medical Insurance (SIM) Trust Fund. It is funded by funds authorized by Congress, premiums from people enrolled in Part B and Part D, and other sources, such as interest earned on the trust fund investments.

B. Medicare Plans

People with Medicare may be able to get health care coverage in several ways. Original Medicare is a fee for service plan managed by the Federal government. In Original Medicare, people with Medicare Part A (hospital coverage) and Part B (medical coverage) can get all medically-necessary Medicare covered services and preventive services. There are other ways besides Original Medicare that people can get their Medicare health coverage. Congress created Medicare Advantage (MA)