WEBVTT 1 00:00:00.780 --> 00:00:02.460 Hello, and welcome back 2 00:00:02.460 --> 00:00:06.240 to the basics of health insurance and managed care. 3 00:00:06.240 --> 00:00:07.240 In this chapter, 4 00:00:07.240 --> 00:00:09.803 we will be discussing the Medicare program. 5 00:00:10.910 --> 00:00:14.580 So far we've covered the key elements of managed care, 6 00:00:14.580 --> 00:00:18.230 cost sharing, provider payments, provider networks, 7 00:00:18.230 --> 00:00:21.070 utilization management, quality measurement, 8 00:00:21.070 --> 00:00:25.470 and accreditation, and how health insurance is regulated. 9 00:00:25.470 --> 00:00:27.580 Most of our discussions thus far 10 00:00:27.580 --> 00:00:30.700 have focused on employer sponsored insurance. 11 00:00:30.700 --> 00:00:33.760 We'll now shift our focus to public insurance, 12 00:00:33.760 --> 00:00:35.800 starting with Medicare. 13 00:00:35.800 --> 00:00:37.480 We will discuss Medicaid, 14 00:00:37.480 --> 00:00:40.350 the Children's Health Insurance Program or CHIP, 15 00:00:40.350 --> 00:00:43.963 and the health insurance exchanges in future chapters. 16 00:00:45.070 --> 00:00:48.550 Medicare is an entitlement health insurance program 17 00:00:48.550 --> 00:00:53.550 established in 1965 for older Americans and the disabled. 18 00:00:54.300 --> 00:00:58.080 Remember, an entitlement program is a public program 19 00:00:58.080 --> 00:01:00.923 in which all US citizens are eligible. 20 00:01:01.790 --> 00:01:04.090 In this lecture we'll go through the basics 21 00:01:04.090 --> 00:01:07.750 of the Medicare program, such as who is eligible, 22 00:01:07.750 --> 00:01:10.660 and what benefits beneficiaries receive, 23 00:01:10.660 --> 00:01:13.460 but we'll also talk about Medicare health plans, 24 00:01:13.460 --> 00:01:17.380 and the centers for Medicare and Medicaid Services or CMS, 25 00:01:17.380 --> 00:01:19.793 which administers the Medicare program. 26 00:01:20.670 --> 00:01:24.570 Medicare health plans are called Medicare Advantage plans, 27 00:01:24.570 --> 00:01:27.860 and they are reviewed by CMS to ensure compliance 28 00:01:27.860 --> 00:01:29.763 with Medicare laws and regulations. 29 00:01:31.890 --> 00:01:36.030 Medicare is one of the most important players in healthcare. 30 00:01:36.030 --> 00:01:37.860 As I've mentioned before, 31 00:01:37.860 --> 00:01:40.130 healthcare leaders pay close attention 32 00:01:40.130 --> 00:01:42.350 to what changes Medicare makes, 33 00:01:42.350 --> 00:01:46.000 because it is likely to be adopted by state Medicaid plans, 34 00:01:46.000 --> 00:01:47.570 employer plans, 35 00:01:47.570 --> 00:01:51.070 and the private individual health insurance market. 36 00:01:51.070 --> 00:01:52.140 For example, 37 00:01:52.140 --> 00:01:54.530 we've discussed how Medicare has been a leader 38 00:01:54.530 --> 00:01:56.650 in provider payment initiatives 39 00:01:56.650 --> 00:02:00.310 that promote quality and cost effectiveness. 40 00:02:00.310 --> 00:02:03.540 Part of the reason that Medicare has such an influence 41 00:02:03.540 --> 00:02:07.670 is that it plays a major role in the US healthcare system, 42 00:02:07.670 --> 00:02:12.670 accounting for 20% of total national health spending in 2015 43 00:02:13.080 --> 00:02:16.773 and 15% of total spending in 2016. 44 00:02:17.700 --> 00:02:20.310 As an analysis of 2015 spending 45 00:02:20.310 --> 00:02:22.930 from the Kaiser Family Foundation shows, 46 00:02:22.930 --> 00:02:27.710 Medicare pays for 29% of spending on prescription drugs, 47 00:02:27.710 --> 00:02:30.940 25% of spending on hospital care, 48 00:02:30.940 --> 00:02:35.250 and 23% of spending on physician services. 49 00:02:35.250 --> 00:02:39.060 Medicare continues to be a leading payer of healthcare costs 50 00:02:39.060 --> 00:02:43.700 and its spending is expected to increase to 171/2% 51 00:02:43.700 --> 00:02:46.913 of total national health spending by 2027. 52 00:02:47.860 --> 00:02:51.030 Also of importance, the Medicare trust fund, 53 00:02:51.030 --> 00:02:53.910 which is funded by American payroll taxes 54 00:02:53.910 --> 00:02:57.740 is projected to be solvent until 2026. 55 00:02:57.740 --> 00:03:00.280 More on this in a few minutes. 56 00:03:00.280 --> 00:03:02.270 This would impact provider revenues 57 00:03:02.270 --> 00:03:04.913 in all parts of the healthcare industry. 58 00:03:06.490 --> 00:03:08.480 You may recall from chapter one 59 00:03:08.480 --> 00:03:11.180 on the history of insurance and managed care, 60 00:03:11.180 --> 00:03:14.310 that Medicare was created in 1965 61 00:03:14.310 --> 00:03:16.740 for people ages 65 and older, 62 00:03:16.740 --> 00:03:20.090 regardless of income or health status. 63 00:03:20.090 --> 00:03:23.660 In 2017 Medicare provided insurance coverage 64 00:03:23.660 --> 00:03:26.453 for 59 million Americans. 65 00:03:28.500 --> 00:03:33.210 In 1972 the program was expanded to cover individuals 66 00:03:33.210 --> 00:03:36.753 under age 65 with permanent disabilities. 67 00:03:39.000 --> 00:03:41.170 You may recall from chapter one 68 00:03:41.170 --> 00:03:43.910 on the history of insurance and managed care, 69 00:03:43.910 --> 00:03:48.910 the Medicare was created in 1965 for people ages 65 and over 70 00:03:49.970 --> 00:03:52.980 regardless of income or health status. 71 00:03:52.980 --> 00:03:56.197 In 2017 Medicare provided insurance coverage 72 00:03:56.197 --> 00:03:59.320 for 59 million Americans. 73 00:03:59.320 --> 00:04:03.270 In 1972 the program was expanded to cover individuals 74 00:04:03.270 --> 00:04:07.280 under age 65 with permanent disabilities. 75 00:04:07.280 --> 00:04:09.110 Beneficiaries who are eligible 76 00:04:09.110 --> 00:04:11.060 based on a permanent disability, 77 00:04:11.060 --> 00:04:15.653 make up 17% of all Medicare beneficiaries in 2016. 78 00:04:16.730 --> 00:04:21.723 13% of Medicare beneficiaries were over age 85 in 2016. 79 00:04:22.640 --> 00:04:25.180 As one would expect of a population of older 80 00:04:25.180 --> 00:04:28.710 and disabled Americans, many Medicare beneficiaries 81 00:04:28.710 --> 00:04:32.750 have multiple chronic conditions, cognitive impairments, 82 00:04:32.750 --> 00:04:37.750 and limitations of activities of daily living or ADLs. 83 00:04:38.020 --> 00:04:41.840 In 2016 more than one third of Medicare beneficiaries 84 00:04:41.840 --> 00:04:43.740 had a functional limitation, 85 00:04:43.740 --> 00:04:46.130 a cognitive or mental impairment, 86 00:04:46.130 --> 00:04:48.853 or had five or more chronic conditions. 87 00:04:49.800 --> 00:04:52.480 Additionally, many Medicare beneficiaries 88 00:04:52.480 --> 00:04:54.580 have modest incomes. 89 00:04:54.580 --> 00:04:57.200 The Medicaid program provides insurance coverage 90 00:04:57.200 --> 00:04:59.630 for individuals with low incomes. 91 00:04:59.630 --> 00:05:01.670 Half of all Medicare beneficiaries 92 00:05:01.670 --> 00:05:06.260 had incomes below $26,200 in 2016. 93 00:05:07.460 --> 00:05:09.320 These low income beneficiaries 94 00:05:09.320 --> 00:05:12.000 may also qualify for Medicaid, 95 00:05:12.000 --> 00:05:15.100 we call these individuals dual eligibles 96 00:05:15.100 --> 00:05:18.863 because they are eligible for both Medicare and Medicaid. 97 00:05:20.810 --> 00:05:23.640 There are four parts of Medicare. 98 00:05:23.640 --> 00:05:27.540 Parts A and B are considered traditional Medicare. 99 00:05:27.540 --> 00:05:30.560 Part A covers inpatient services, 100 00:05:30.560 --> 00:05:34.470 and Part B covers outpatient services. 101 00:05:34.470 --> 00:05:38.050 Inpatient services would include hospital admissions, 102 00:05:38.050 --> 00:05:40.550 stays in skilled nursing facilities, 103 00:05:40.550 --> 00:05:43.970 and some home health and hospice services. 104 00:05:43.970 --> 00:05:47.010 Part A does have a deductible, 105 00:05:47.010 --> 00:05:49.660 and beneficiaries also pay co-insurance 106 00:05:49.660 --> 00:05:52.090 for longer inpatient stays 107 00:05:52.090 --> 00:05:55.320 in hospitals or skilled nursing facilities. 108 00:05:55.320 --> 00:05:58.870 Part B outpatient benefits include physician visits, 109 00:05:58.870 --> 00:06:01.330 and other outpatient services, 110 00:06:01.330 --> 00:06:04.180 including some home health visits. 111 00:06:04.180 --> 00:06:08.370 Medicare beneficiaries also have a deductible for Part B, 112 00:06:08.370 --> 00:06:12.590 and they pay co-insurance for most Part B benefits. 113 00:06:12.590 --> 00:06:15.900 There is no cost sharing for any preventative services, 114 00:06:15.900 --> 00:06:19.010 including the Medicare annual wellness visit. 115 00:06:19.010 --> 00:06:21.040 This is consistent with the requirements 116 00:06:21.040 --> 00:06:23.310 of the Affordable Care Act or ACA 117 00:06:23.310 --> 00:06:25.073 as we've discussed previously. 118 00:06:26.900 --> 00:06:28.967 When we talked about the history of health insurance 119 00:06:28.967 --> 00:06:31.600 and managed care in chapter one, 120 00:06:31.600 --> 00:06:35.290 we discussed how healthcare costs escalated significantly 121 00:06:35.290 --> 00:06:38.760 following the creation of Medicare and Medicaid. 122 00:06:38.760 --> 00:06:40.620 After years of rising costs, 123 00:06:40.620 --> 00:06:43.740 Congress decided to create a managed care option 124 00:06:43.740 --> 00:06:45.320 for Medicare. 125 00:06:45.320 --> 00:06:49.980 This option is called Part C or Medicare Advantage. 126 00:06:49.980 --> 00:06:52.220 It allows beneficiaries to enroll 127 00:06:52.220 --> 00:06:54.780 in a private managed care health plan, 128 00:06:54.780 --> 00:06:58.320 such as a health maintenance organization, HMO, 129 00:06:58.320 --> 00:07:02.460 or a preferred provider organization or PPO. 130 00:07:02.460 --> 00:07:05.550 Medicare beneficiaries receive all Medicare services 131 00:07:05.550 --> 00:07:08.940 covered under traditional fee for service Medicare, 132 00:07:08.940 --> 00:07:12.470 including Part A and Part B benefits. 133 00:07:12.470 --> 00:07:15.030 Since managed care organizations have controls 134 00:07:15.030 --> 00:07:17.200 in place to contain costs, 135 00:07:17.200 --> 00:07:20.240 these plans are able to offer extra benefits 136 00:07:20.240 --> 00:07:24.270 that members would not receive under traditional Medicare. 137 00:07:24.270 --> 00:07:28.610 Medicare Advantage plans may also have less cost sharing. 138 00:07:28.610 --> 00:07:31.560 Medicare Advantage plans are therefore popular 139 00:07:31.560 --> 00:07:33.570 among Medicare beneficiaries 140 00:07:33.570 --> 00:07:36.290 with one third selecting Medicare Advantage 141 00:07:36.290 --> 00:07:39.093 over traditional Medicare in 2017. 142 00:07:40.040 --> 00:07:42.340 Congress leader added Part D 143 00:07:42.340 --> 00:07:45.150 which covers outpatient prescription drugs 144 00:07:45.150 --> 00:07:47.070 through Medicare Advantage plans 145 00:07:47.070 --> 00:07:48.823 that contract with Medicare. 146 00:07:50.030 --> 00:07:52.200 This means that Medicare Part D 147 00:07:52.200 --> 00:07:54.930 does not cover prescription drugs administered 148 00:07:54.930 --> 00:07:58.630 while an inpatient in a hospital or a facility. 149 00:07:58.630 --> 00:08:02.410 Those costs are typically included as a medical cost 150 00:08:02.410 --> 00:08:04.560 under a traditional Part A, 151 00:08:04.560 --> 00:08:08.690 or through a Part C Medicare Advantage plan. 152 00:08:08.690 --> 00:08:11.110 There are two types of Part D plans, 153 00:08:11.110 --> 00:08:14.980 standalone prescription drug plans or PDPs, 154 00:08:14.980 --> 00:08:19.980 and Medicare Advantage drug plans called MAPD plans. 155 00:08:20.000 --> 00:08:23.280 Out-of-pocket costs for Medicare beneficiaries vary 156 00:08:23.280 --> 00:08:25.600 by Medicare Advantage plan. 157 00:08:25.600 --> 00:08:27.240 However, one distinct difference 158 00:08:27.240 --> 00:08:31.150 between traditional Medicare and Medicare Advantage plans 159 00:08:31.150 --> 00:08:32.780 is that traditional Medicare 160 00:08:32.780 --> 00:08:35.830 has no out-of-pocket maximum limit, 161 00:08:35.830 --> 00:08:40.830 but all Medicare Advantage plans have a MOOP limit. 162 00:08:40.910 --> 00:08:44.660 There are many options from which beneficiaries can choose. 163 00:08:44.660 --> 00:08:46.970 In fact, in some geographic areas, 164 00:08:46.970 --> 00:08:49.200 there are so many plans available 165 00:08:49.200 --> 00:08:51.040 that it can become overwhelming 166 00:08:51.040 --> 00:08:53.463 for beneficiaries to choose a plan. 167 00:08:54.950 --> 00:08:58.310 Well, Medicare provides comprehensive coverage, 168 00:08:58.310 --> 00:09:01.940 traditional Medicare does not pay for some services 169 00:09:01.940 --> 00:09:03.790 that are important for older people 170 00:09:03.790 --> 00:09:06.150 and people with disabilities. 171 00:09:06.150 --> 00:09:09.360 Most notably, Medicare does not provide coverage 172 00:09:09.360 --> 00:09:12.180 of longterm services and supports, 173 00:09:12.180 --> 00:09:17.180 hearing aids, dental, and vision eyeglass services. 174 00:09:17.280 --> 00:09:20.330 By comparison, Medicare Advantage plans 175 00:09:20.330 --> 00:09:23.140 may cover some of these gaps in coverage, 176 00:09:23.140 --> 00:09:24.810 and as mentioned earlier, 177 00:09:24.810 --> 00:09:28.620 Medicare Advantage plans are required to limit beneficiaries 178 00:09:28.620 --> 00:09:31.680 out-of-pocket spending for services covered 179 00:09:31.680 --> 00:09:35.347 under Medicare Parts A and B to no more than $6,700. 180 00:09:38.800 --> 00:09:41.180 Medicare enrollment periods are similar 181 00:09:41.180 --> 00:09:43.430 to other types of insurance 182 00:09:43.430 --> 00:09:47.020 as there is an annual open enrollment period each year 183 00:09:47.020 --> 00:09:50.920 from October 15th until December 7th. 184 00:09:50.920 --> 00:09:54.400 Medicare also has an initial enrollment period, 185 00:09:54.400 --> 00:09:57.180 which is related to when a person becomes eligible 186 00:09:57.180 --> 00:09:58.680 for Medicare, 187 00:09:58.680 --> 00:10:00.500 and there are special enrollment periods 188 00:10:00.500 --> 00:10:03.020 for qualifying life events. 189 00:10:03.020 --> 00:10:05.410 Lastly, there is a forth enrollment period 190 00:10:05.410 --> 00:10:09.083 exclusively for Medicare Advantage enrollees. 191 00:10:09.930 --> 00:10:12.830 The initial enrollment period begins three months prior 192 00:10:12.830 --> 00:10:14.930 to your 65th birthday, 193 00:10:14.930 --> 00:10:18.760 and ends three months after your birthday month. 194 00:10:18.760 --> 00:10:22.610 During initial enrollment, beneficiaries must decide 195 00:10:22.610 --> 00:10:26.630 whether they want outpatient coverage through Part B. 196 00:10:26.630 --> 00:10:29.360 Well, most beneficiaries are automatically enrolled 197 00:10:29.360 --> 00:10:34.360 into Parts A and B, beneficiaries can opt out of Part B. 198 00:10:35.850 --> 00:10:38.200 Individuals with permanent disabilities, 199 00:10:38.200 --> 00:10:40.170 or Lou Gehrig's disease, 200 00:10:40.170 --> 00:10:43.310 or those who have already received retirement benefits 201 00:10:43.310 --> 00:10:47.460 through the Railroad Retirement Board or Social Security 202 00:10:47.460 --> 00:10:50.350 are automatically enrolled in Part B. 203 00:10:50.350 --> 00:10:53.770 If these beneficiaries choose to opt out of Part B, 204 00:10:53.770 --> 00:10:56.020 they must notify Medicare 205 00:10:56.020 --> 00:10:58.520 upon receiving their Medicare card, 206 00:10:58.520 --> 00:11:00.690 otherwise they will be required to pay 207 00:11:00.690 --> 00:11:03.023 the first monthly Part B premium. 208 00:11:04.090 --> 00:11:05.970 However, it is important to note 209 00:11:05.970 --> 00:11:08.020 that there are financial penalties 210 00:11:08.020 --> 00:11:11.123 for individuals who delay Part B enrollment. 211 00:11:12.100 --> 00:11:14.320 Individuals who are still working, 212 00:11:14.320 --> 00:11:17.310 or are covered on their family members policy 213 00:11:17.310 --> 00:11:19.600 may wish to delay Part B benefits 214 00:11:19.600 --> 00:11:21.510 until after they retire 215 00:11:21.510 --> 00:11:24.853 because they may have an employer plan that is primary. 216 00:11:25.720 --> 00:11:28.380 If beneficiaries choose to delay Part B 217 00:11:28.380 --> 00:11:30.360 because they had other coverage, 218 00:11:30.360 --> 00:11:33.060 they will be eligible for a special enrollment period 219 00:11:33.060 --> 00:11:34.640 upon retirement, 220 00:11:34.640 --> 00:11:37.310 and given two months to enroll in Part B 221 00:11:37.310 --> 00:11:39.083 with no financial penalty. 222 00:11:39.920 --> 00:11:42.020 Otherwise, if a beneficiary chooses 223 00:11:42.020 --> 00:11:43.920 to delay Part B enrollment, 224 00:11:43.920 --> 00:11:47.190 the beneficiary may be required to pay a penalty 225 00:11:47.190 --> 00:11:50.890 of as much as 10% above the monthly premium 226 00:11:50.890 --> 00:11:55.470 for every 12 months that he or opted out of coverage. 227 00:11:55.470 --> 00:11:56.980 The longer someone waits, 228 00:11:56.980 --> 00:11:58.873 the higher their monthly premium. 229 00:11:59.710 --> 00:12:02.850 After a beneficiary decides to enroll in Part B, 230 00:12:02.850 --> 00:12:04.830 they have another decision to make. 231 00:12:04.830 --> 00:12:08.100 They may choose traditional fee for service Medicare, 232 00:12:08.100 --> 00:12:10.910 or they may enroll in a Medicare Advantage 233 00:12:10.910 --> 00:12:12.910 managed care plan, 234 00:12:12.910 --> 00:12:14.860 then the beneficiary decides 235 00:12:14.860 --> 00:12:17.980 whether to purchase a prescription drug plan, 236 00:12:17.980 --> 00:12:20.370 either a standalone drug plan, 237 00:12:20.370 --> 00:12:22.790 or a drug plan that is incorporated 238 00:12:22.790 --> 00:12:25.023 with the MA medical benefits. 239 00:12:25.890 --> 00:12:28.870 Lastly, Medicare beneficiaries may opt 240 00:12:28.870 --> 00:12:32.163 to purchase Medigap supplemental insurance. 241 00:12:34.990 --> 00:12:38.800 Medicare beneficiaries may choose Medicare Advantage 242 00:12:38.800 --> 00:12:41.170 for supplemental benefits that are not covered 243 00:12:41.170 --> 00:12:45.740 by traditional Medicare, and the lower out of pocket costs. 244 00:12:45.740 --> 00:12:48.390 Data indicates that members of MA plans 245 00:12:48.390 --> 00:12:51.470 may also receive higher quality services 246 00:12:51.470 --> 00:12:53.840 with better outcomes. 247 00:12:53.840 --> 00:12:57.770 According to America's Health Insurance Plans or AHIP, 248 00:12:57.770 --> 00:13:01.020 which is the national trade association for health plans 249 00:13:01.020 --> 00:13:03.740 there are many reasons that Medicare beneficiaries 250 00:13:03.740 --> 00:13:06.143 choose Medicare Advantage plans. 251 00:13:07.080 --> 00:13:10.180 AHIP says that Medicare Advantage beneficiaries 252 00:13:10.180 --> 00:13:12.540 receive higher quality services 253 00:13:12.540 --> 00:13:15.780 than those under traditional Medicare. 254 00:13:15.780 --> 00:13:18.700 Specifically compared to Medicare beneficiaries 255 00:13:18.700 --> 00:13:21.700 with traditional fee for service Medicare, 256 00:13:21.700 --> 00:13:24.940 Medicare Advantage members receive 7% more 257 00:13:24.940 --> 00:13:26.750 primary care visits, 258 00:13:26.750 --> 00:13:31.750 have 28% fewer hospital readmissions at a 9% lower cost, 259 00:13:33.660 --> 00:13:37.163 and they spend 19% fewer days in a hospital. 260 00:13:38.170 --> 00:13:40.240 AHIP says that Medicare Advantage plans 261 00:13:40.240 --> 00:13:43.740 outperform traditional Medicare in breast cancer, 262 00:13:43.740 --> 00:13:46.743 cholesterol screenings, and diabetes care. 263 00:13:47.760 --> 00:13:51.780 MA plans have also outperformed traditional Medicare, 264 00:13:51.780 --> 00:13:56.680 a nine out of 11 procedures specific clinical measures. 265 00:13:56.680 --> 00:13:59.010 From an affordability perspective, 266 00:13:59.010 --> 00:14:02.120 over 5,000 MA plans nationwide 267 00:14:02.120 --> 00:14:04.723 have no premiums according to AHIP. 268 00:14:05.610 --> 00:14:09.460 Lastly, AHIP data shows that MA plan members 269 00:14:09.460 --> 00:14:13.290 have higher satisfaction than traditional Medicare. 270 00:14:13.290 --> 00:14:17.490 94% of MA plan members said that they were satisfied 271 00:14:17.490 --> 00:14:20.240 with the quality of care that they received, 272 00:14:20.240 --> 00:14:24.040 90% said they were satisfied with their plans, 273 00:14:24.040 --> 00:14:27.803 and 90% were satisfied with the benefits offered. 274 00:14:29.640 --> 00:14:33.930 You may wonder whether HMOs or PPOs are more popular 275 00:14:33.930 --> 00:14:37.190 among Medicare Advantage plan members. 276 00:14:37.190 --> 00:14:42.190 Of all MA enrollees, 62% were enrolled in an HMO in 2019, 277 00:14:44.060 --> 00:14:48.690 and 31% were enrolled in local PPOs, 278 00:14:48.690 --> 00:14:52.680 another 6% were enrolled in regional PPOs 279 00:14:52.680 --> 00:14:54.863 which are used in rural areas. 280 00:14:56.610 --> 00:15:01.610 Approximately 90% of all Medicare beneficiaries have access 281 00:15:01.790 --> 00:15:06.400 to Part D or other credible prescription drug coverage. 282 00:15:06.400 --> 00:15:09.270 Those receiving coverage through Part D plans 283 00:15:09.270 --> 00:15:12.110 have many options from which to choose 284 00:15:12.110 --> 00:15:15.200 as all Medicare Advantage plans are required 285 00:15:15.200 --> 00:15:18.690 to offer at least one Part D plan. 286 00:15:18.690 --> 00:15:22.130 Remember that there are two types of Part D plans, 287 00:15:22.130 --> 00:15:24.670 standalone plans that could be purchased 288 00:15:24.670 --> 00:15:27.580 by beneficiaries who choose traditional Medicare 289 00:15:27.580 --> 00:15:30.070 for Part A and B benefits, 290 00:15:30.070 --> 00:15:33.400 and combination Medicare Advantage Part D plans 291 00:15:33.400 --> 00:15:37.783 that offer Parts A, B and D all in one plan. 292 00:15:38.760 --> 00:15:43.010 Purchasing a Medicare prescription drug plan is voluntary, 293 00:15:43.010 --> 00:15:46.960 but many beneficiaries offer to purchase a Part D plan 294 00:15:46.960 --> 00:15:48.690 because it reduces drug costs 295 00:15:48.690 --> 00:15:53.150 after the deductible is met when there is a deductible, 296 00:15:53.150 --> 00:15:56.700 and Part D plans may also provide catastrophic coverage 297 00:15:56.700 --> 00:15:59.320 from very high drug costs. 298 00:15:59.320 --> 00:16:00.700 In fact, there were more than 299 00:16:00.700 --> 00:16:05.530 42 million Medicare beneficiaries enrolled in a standalone, 300 00:16:05.530 --> 00:16:09.433 or combination Part D plan in 2017. 301 00:16:11.270 --> 00:16:14.750 The standard Part D plan includes a deductible 302 00:16:14.750 --> 00:16:19.750 which was $405 in 2018 and a 25% co-insurance. 303 00:16:21.000 --> 00:16:23.800 More than half of Medicare Advantage enrollees 304 00:16:23.800 --> 00:16:27.333 are enrolled in combination MA-PD plans. 305 00:16:28.410 --> 00:16:31.310 Beneficiaries with lower incomes may be eligible 306 00:16:31.310 --> 00:16:33.840 for additional financial assistance. 307 00:16:33.840 --> 00:16:36.350 These enrollees pay monthly premiums 308 00:16:36.350 --> 00:16:40.123 that averaged $36 per month in 2017. 309 00:16:41.260 --> 00:16:44.140 Each Part D plan includes a formulary 310 00:16:44.140 --> 00:16:47.280 which is a list of drugs that the plan covers. 311 00:16:47.280 --> 00:16:51.400 Many plans will have different groups of drugs called tiers, 312 00:16:51.400 --> 00:16:55.440 each tier has a different amount of cost sharing required. 313 00:16:55.440 --> 00:16:57.070 We will discuss formularies 314 00:16:57.070 --> 00:16:59.300 and prescription drug cost sharing tiers 315 00:16:59.300 --> 00:17:01.493 at greater length in a later chapter. 316 00:17:02.830 --> 00:17:06.770 Overall, Medicare is financed by general revenues, 317 00:17:06.770 --> 00:17:11.770 payroll taxes, beneficiary premiums, and other sources. 318 00:17:11.960 --> 00:17:16.960 In 2016, general revenues made up 45% of Medicare funding, 319 00:17:17.780 --> 00:17:20.930 payroll taxes made up 36%, 320 00:17:20.930 --> 00:17:25.300 and beneficiary premiums contributed 13%. 321 00:17:25.300 --> 00:17:29.220 Let's look at how each part of Medicare is financed. 322 00:17:29.220 --> 00:17:34.220 Part A is mainly funded through a 2.9% payroll tax, 323 00:17:34.830 --> 00:17:37.210 this tax is split between the employer 324 00:17:37.210 --> 00:17:42.210 and the employee at 1.45% each. 325 00:17:42.310 --> 00:17:43.950 These funds are deposited 326 00:17:43.950 --> 00:17:46.660 into the health insurance trust fund. 327 00:17:46.660 --> 00:17:48.650 Individuals with higher earnings 328 00:17:48.650 --> 00:17:53.310 pay a higher tax rate of 2.35%. 329 00:17:53.310 --> 00:17:54.670 As I mentioned earlier, 330 00:17:54.670 --> 00:17:57.020 the Hospital Trust Fund is expected 331 00:17:57.020 --> 00:18:02.020 to be 100% solvent until 2026. 332 00:18:02.330 --> 00:18:07.120 According to the 2019 annual report of the funds trustees, 333 00:18:07.120 --> 00:18:12.050 this does not mean that after 2026 Medicare is bankrupt, 334 00:18:12.050 --> 00:18:14.910 this means that after 2026, 335 00:18:14.910 --> 00:18:19.720 Medicare will not be able to pay for 100% of costs, 336 00:18:19.720 --> 00:18:23.220 instead, it will only be able to cover 89% 337 00:18:23.220 --> 00:18:25.340 of hospital costs. 338 00:18:25.340 --> 00:18:30.340 Also the 2026 only applies to Part A benefits, 339 00:18:30.600 --> 00:18:34.590 it does not impact outpatient or prescription drug benefits, 340 00:18:34.590 --> 00:18:36.503 which are financed differently. 341 00:18:37.940 --> 00:18:41.220 The Part B benefit is funded by general revenues 342 00:18:41.220 --> 00:18:44.610 and monthly premiums paid by beneficiaries. 343 00:18:44.610 --> 00:18:49.320 The typical monthly premium in 2018 was $134, 344 00:18:49.320 --> 00:18:52.420 the same as it was in 2017. 345 00:18:52.420 --> 00:18:55.830 For dual eligibles with lower incomes, 346 00:18:55.830 --> 00:18:59.500 Medicaid pays the Part B monthly premium. 347 00:18:59.500 --> 00:19:02.100 Individuals with higher incomes pay more, 348 00:19:02.100 --> 00:19:06.203 so some people may pay a monthly premium of up to $428. 349 00:19:08.560 --> 00:19:11.220 Since Medicare Part C offers coverage 350 00:19:11.220 --> 00:19:12.980 through private health plans, 351 00:19:12.980 --> 00:19:16.020 the services are not financed separately, 352 00:19:16.020 --> 00:19:17.200 benefits are funded 353 00:19:17.200 --> 00:19:20.290 just as they are under traditional Medicare. 354 00:19:20.290 --> 00:19:24.180 In other words, services are covered through payroll taxes, 355 00:19:24.180 --> 00:19:28.410 general revenue, premiums, and other sources. 356 00:19:28.410 --> 00:19:30.930 Medicare Advantage plan members typically pay 357 00:19:30.930 --> 00:19:33.250 two separate monthly premiums, 358 00:19:33.250 --> 00:19:36.010 one for Part B and an additional premium 359 00:19:36.010 --> 00:19:37.753 directly to the MA plan. 360 00:19:39.100 --> 00:19:41.870 Part D is funded by general revenues 361 00:19:41.870 --> 00:19:44.080 and beneficiary premiums, 362 00:19:44.080 --> 00:19:47.040 but in addition, some state Medicaid programs 363 00:19:47.040 --> 00:19:50.253 may make payments for dually eligible beneficiaries. 364 00:19:51.090 --> 00:19:54.600 In 2018 the average monthly premium for Part D 365 00:19:54.600 --> 00:19:56.790 was about $43. 366 00:19:56.790 --> 00:19:59.960 Similar to cost sharing for other parts of Medicare 367 00:19:59.960 --> 00:20:03.340 beneficiaries with higher incomes pay a larger share 368 00:20:03.340 --> 00:20:04.823 of Part D coverage. 369 00:20:05.930 --> 00:20:08.350 We've discussed out-of-pocket cost sharing 370 00:20:08.350 --> 00:20:09.980 throughout this lecture, 371 00:20:09.980 --> 00:20:12.410 but I wanted to provide you with some statistics 372 00:20:12.410 --> 00:20:15.340 regarding Medicare beneficiary healthcare spending 373 00:20:15.340 --> 00:20:16.890 in general. 374 00:20:16.890 --> 00:20:19.480 According to the Kaiser Family Foundation, 375 00:20:19.480 --> 00:20:21.520 traditional Medicare beneficiaries 376 00:20:21.520 --> 00:20:26.520 with Parts A and B in 2016 spent on average over $5,400 377 00:20:28.270 --> 00:20:31.510 out of pocket for healthcare spending. 378 00:20:31.510 --> 00:20:34.930 Over 40% of beneficiary total spending 379 00:20:34.930 --> 00:20:37.440 was spent on Medicare premiums. 380 00:20:37.440 --> 00:20:39.950 Well, nearly 60% of total spending 381 00:20:39.950 --> 00:20:43.840 was on medical and longterm care services. 382 00:20:43.840 --> 00:20:46.290 Looking at different types of services, 383 00:20:46.290 --> 00:20:48.860 the highest average per capita cost 384 00:20:48.860 --> 00:20:52.600 was spent on longterm care facility services, 385 00:20:52.600 --> 00:20:55.000 then medical supplies and providers 386 00:20:55.000 --> 00:20:58.393 followed by prescription drugs and dental services. 387 00:21:01.890 --> 00:21:05.930 Given the out-of-pocket spending and gaps in benefits, 388 00:21:05.930 --> 00:21:09.680 many Medicare beneficiaries also have a secondary 389 00:21:09.680 --> 00:21:12.930 or supplemental source of insurance. 390 00:21:12.930 --> 00:21:16.370 In 2016, one third of Medicare beneficiaries 391 00:21:16.370 --> 00:21:18.490 received supplemental insurance 392 00:21:18.490 --> 00:21:21.060 through employer sponsored insurance, 393 00:21:21.060 --> 00:21:25.300 another third had a Medigap policy that they purchased. 394 00:21:25.300 --> 00:21:30.300 22% were dually eligible, receiving coverage from Medicaid, 395 00:21:30.340 --> 00:21:34.403 and 19% of beneficiaries had no supplemental coverage. 396 00:21:35.350 --> 00:21:37.340 Medicare beneficiaries may have 397 00:21:37.340 --> 00:21:40.550 an employer sponsored retiree plan. 398 00:21:40.550 --> 00:21:43.590 However, analysts expect that fewer beneficiaries 399 00:21:43.590 --> 00:21:45.590 will have this type of coverage 400 00:21:45.590 --> 00:21:48.810 since the number of employers offering retiree coverage 401 00:21:48.810 --> 00:21:53.810 has decreased from 66% in 1988 to 18% in 2018. 402 00:21:56.730 --> 00:21:58.820 According to the Kaiser Family Foundations 403 00:21:58.820 --> 00:22:01.230 2019 employer survey, 404 00:22:01.230 --> 00:22:05.500 28% of large employers who offer health benefits 405 00:22:05.500 --> 00:22:08.303 also offer retiree health benefits. 406 00:22:09.560 --> 00:22:11.820 For our dual eligible population, 407 00:22:11.820 --> 00:22:15.170 Medicaid is a source of supplemental insurance. 408 00:22:15.170 --> 00:22:18.160 It is considered a secondary source of insurance 409 00:22:18.160 --> 00:22:21.130 as Medicare pays for services first, 410 00:22:21.130 --> 00:22:24.870 then any services for which Medicare does not pay 411 00:22:24.870 --> 00:22:27.570 Medicaid may pay depending. 412 00:22:27.570 --> 00:22:31.440 This is particularly relevant to longterm care services 413 00:22:31.440 --> 00:22:34.150 for which Medicare offers little coverage. 414 00:22:34.150 --> 00:22:38.890 So nursing homes largely rely on Medicaid for payments. 415 00:22:38.890 --> 00:22:42.030 Medicaid also helps pay for Medicare premiums 416 00:22:42.030 --> 00:22:43.083 and cost sharing. 417 00:22:45.410 --> 00:22:47.590 Beneficiaries who do not have access 418 00:22:47.590 --> 00:22:50.670 to employer sponsored retiree benefits, 419 00:22:50.670 --> 00:22:52.840 and are not eligible for Medicaid 420 00:22:52.840 --> 00:22:56.400 may choose to purchase a Medigap policy. 421 00:22:56.400 --> 00:22:59.120 Medigap policies are typically sold 422 00:22:59.120 --> 00:23:01.780 by private insurance companies. 423 00:23:01.780 --> 00:23:03.700 Medigap plans may fully 424 00:23:03.700 --> 00:23:06.473 or partially cover Medicare cost sharing. 425 00:23:07.390 --> 00:23:09.420 Of those Medicare beneficiaries 426 00:23:09.420 --> 00:23:11.800 who have no supplemental insurance, 427 00:23:11.800 --> 00:23:16.450 a disproportionate share are under age 65 428 00:23:16.450 --> 00:23:18.293 with permanent disabilities. 429 00:23:21.160 --> 00:23:24.370 As with all public health insurance programs, 430 00:23:24.370 --> 00:23:26.300 participating insurance plans 431 00:23:26.300 --> 00:23:29.140 must follow legal requirements. 432 00:23:29.140 --> 00:23:31.520 CMS administers the program, 433 00:23:31.520 --> 00:23:34.120 and reviews Medicare Advantage plans 434 00:23:34.120 --> 00:23:37.280 to ensure regulatory compliance. 435 00:23:37.280 --> 00:23:38.660 Medicare Advantage plans 436 00:23:38.660 --> 00:23:41.810 must be licensed as a risk bearing entity 437 00:23:41.810 --> 00:23:45.960 in the state in which they plan to sell Medicare policies. 438 00:23:45.960 --> 00:23:48.900 Plans must meet a minimum level of enrollment 439 00:23:48.900 --> 00:23:50.600 in the plan. 440 00:23:50.600 --> 00:23:54.520 This enrollment number is lower in rural areas. 441 00:23:54.520 --> 00:23:58.100 Medicare Advantage plans must meet specific requirements 442 00:23:58.100 --> 00:24:01.540 before CMS will contract with the plan. 443 00:24:01.540 --> 00:24:04.410 For example, MA plans must meet 444 00:24:04.410 --> 00:24:07.440 provider network adequacy requirements, 445 00:24:07.440 --> 00:24:09.520 although as you may recall, 446 00:24:09.520 --> 00:24:12.630 CMS does except the review of networks 447 00:24:12.630 --> 00:24:15.300 provided by accreditation organizations 448 00:24:15.300 --> 00:24:18.323 such as NCQA, URAC and AAAHC. 449 00:24:20.330 --> 00:24:25.020 Lastly, Medicare Advantage plans must submit a bid to CMS 450 00:24:25.020 --> 00:24:28.813 and be approved, which we will discuss in the next slide. 451 00:24:30.840 --> 00:24:33.670 Medicare began applying a bidding process 452 00:24:33.670 --> 00:24:36.610 for health plans in 2006. 453 00:24:36.610 --> 00:24:39.160 Health plans estimate the cost of providing 454 00:24:39.160 --> 00:24:43.190 Part A and B services per enrollee, 455 00:24:43.190 --> 00:24:47.590 CMS then compares bids to a benchmark amount, 456 00:24:47.590 --> 00:24:51.110 which is based on a formula set out in the law. 457 00:24:51.110 --> 00:24:53.450 The benchmark is the maximum amount 458 00:24:53.450 --> 00:24:57.940 CMS will pay for services in that geographic area, 459 00:24:57.940 --> 00:25:01.090 so the benchmark varies by county. 460 00:25:01.090 --> 00:25:04.490 If a plan's bid is higher than the benchmark, 461 00:25:04.490 --> 00:25:08.110 beneficiaries will pay the difference in monthly premiums 462 00:25:08.110 --> 00:25:12.083 in addition to the premium beneficiaries pay for Part B. 463 00:25:12.990 --> 00:25:15.510 If the bid is lower than the benchmark, 464 00:25:15.510 --> 00:25:18.180 then the savings is shared between Medicare 465 00:25:18.180 --> 00:25:19.880 and the health plan. 466 00:25:19.880 --> 00:25:23.610 The MA plan share is called a rebate. 467 00:25:23.610 --> 00:25:26.300 Rebates must be returned to the enrollee 468 00:25:26.300 --> 00:25:30.320 in the form of more benefits, reduced cost sharing, 469 00:25:30.320 --> 00:25:33.880 reduced Part B premiums, Part D premiums, 470 00:25:33.880 --> 00:25:36.790 or a combination of these options. 471 00:25:36.790 --> 00:25:40.250 In 2012, the size of the rebate became dependent 472 00:25:40.250 --> 00:25:43.520 about quality star scores. 473 00:25:43.520 --> 00:25:46.860 Lastly, MA plan payments are adjusted 474 00:25:46.860 --> 00:25:49.220 for the risk profile of enrollees, 475 00:25:49.220 --> 00:25:52.783 including enrollment demographics and health history. 476 00:25:54.440 --> 00:25:57.530 Medicare pays MA plans a capitated 477 00:25:57.530 --> 00:26:00.870 or fixed rate per enrollee each month, 478 00:26:00.870 --> 00:26:05.550 this payment pays for Part A and Part B services, 479 00:26:05.550 --> 00:26:08.210 then Medicare makes a second payment 480 00:26:08.210 --> 00:26:10.890 to Medicare Advantage prescription drug plans 481 00:26:10.890 --> 00:26:12.663 for Part D services. 482 00:26:14.550 --> 00:26:19.550 In 2012 CMS began to adjust the size of MA plan rebates 483 00:26:20.660 --> 00:26:23.720 based on the plans quality star score. 484 00:26:23.720 --> 00:26:26.280 You may recall we discussed Medicare stars 485 00:26:26.280 --> 00:26:28.490 in our quality lecture. 486 00:26:28.490 --> 00:26:30.060 As a brief refresher, 487 00:26:30.060 --> 00:26:32.610 plans that receive less than three stars 488 00:26:32.610 --> 00:26:35.560 for three consecutive years are terminated. 489 00:26:35.560 --> 00:26:39.080 In other words, three strikes you're out. 490 00:26:39.080 --> 00:26:43.240 Plans that receive four stars receive financial bonuses, 491 00:26:43.240 --> 00:26:46.170 and plans with five stars receive bonuses 492 00:26:46.170 --> 00:26:50.013 and are also permitted to market their plan year round. 493 00:26:50.960 --> 00:26:54.740 CMS publishes a list of star ratings each year. 494 00:26:54.740 --> 00:26:58.830 For 2019 the MA plan Kaiser Permanente, 495 00:26:58.830 --> 00:27:02.230 again received the highest star score for MA plans 496 00:27:02.230 --> 00:27:04.660 and prescription drug plans. 497 00:27:04.660 --> 00:27:08.620 This is not terribly surprising because Kaiser Permanente 498 00:27:08.620 --> 00:27:11.280 is an integrated delivery system, 499 00:27:11.280 --> 00:27:14.870 and integrated delivery systems are often better coordinated 500 00:27:14.870 --> 00:27:18.780 to measure and act upon quality outcomes. 501 00:27:18.780 --> 00:27:23.180 The 2019 list also showed that most areas of the country 502 00:27:23.180 --> 00:27:26.910 have a combination MA plan and Part D plan 503 00:27:26.910 --> 00:27:29.653 with four stars or higher available. 504 00:27:31.390 --> 00:27:33.730 As we've discussed throughout the course, 505 00:27:33.730 --> 00:27:36.140 healthcare costs continue to rise, 506 00:27:36.140 --> 00:27:40.170 however, Medicare spending has been growing at a slower rate 507 00:27:40.170 --> 00:27:43.720 than private insurance on a per enrollee basis 508 00:27:43.720 --> 00:27:46.570 over the past 25 years. 509 00:27:46.570 --> 00:27:50.240 Data shows that from 2010 to 2016, 510 00:27:50.240 --> 00:27:54.110 Medicare spending rose by an average annual rate of 1.3% 511 00:27:55.542 --> 00:27:59.427 compared to private insurance spending growth at 3.5%. 512 00:28:00.780 --> 00:28:03.780 However, this trend may change 513 00:28:03.780 --> 00:28:06.720 as the number of Medicare enrollees increases 514 00:28:06.720 --> 00:28:08.880 and thus service utilization 515 00:28:08.880 --> 00:28:11.103 as well as rising healthcare costs. 516 00:28:12.220 --> 00:28:16.860 Analysts predict that from 2017 to 2027, 517 00:28:16.860 --> 00:28:20.190 Medicare share of the national budget will increase 518 00:28:20.190 --> 00:28:25.053 from 14.7% to 171/2%. 519 00:28:26.820 --> 00:28:30.750 Given the high cost of Medicare and future estimates, 520 00:28:30.750 --> 00:28:35.230 the ACA created the Independent Payment Advisory Board 521 00:28:35.230 --> 00:28:39.190 or IPAB to recommend Medicare spending reductions 522 00:28:39.190 --> 00:28:44.190 to Congress if spending exceeds specified target levels. 523 00:28:44.260 --> 00:28:48.090 The IPAB is made up of 15 full time members 524 00:28:48.090 --> 00:28:49.950 that are appointed by the president 525 00:28:49.950 --> 00:28:52.230 and confirmed by the Senate. 526 00:28:52.230 --> 00:28:55.240 To date no individuals have been nominated 527 00:28:55.240 --> 00:28:57.703 to serve on an IPAB by the president. 528 00:28:58.780 --> 00:29:01.570 If the IPAB still remains without members 529 00:29:01.570 --> 00:29:05.610 when a proposal for spending reductions is required by law, 530 00:29:05.610 --> 00:29:09.410 the task of making spending reduction recommendations 531 00:29:09.410 --> 00:29:12.070 becomes the responsibility of the secretary 532 00:29:12.070 --> 00:29:14.993 of the Department of Health and Human Services. 533 00:29:16.650 --> 00:29:20.120 The ACA also created the center for Medicare 534 00:29:20.120 --> 00:29:24.597 and Medicaid innovation or innovation center within CMS. 535 00:29:25.730 --> 00:29:29.270 This part of CMS focuses on a variety of payment 536 00:29:29.270 --> 00:29:31.500 and other healthcare reform efforts 537 00:29:31.500 --> 00:29:34.000 and demonstration programs. 538 00:29:34.000 --> 00:29:36.760 One of the programs that is currently underway 539 00:29:36.760 --> 00:29:40.480 is the development of Accountable Care Organizations 540 00:29:40.480 --> 00:29:42.470 or ACOs. 541 00:29:42.470 --> 00:29:45.370 ACOs are delivery system reform model 542 00:29:45.370 --> 00:29:48.420 being tested by the innovation center. 543 00:29:48.420 --> 00:29:51.370 The ACA explicitly direct CMS 544 00:29:51.370 --> 00:29:56.370 to promote the use of ACOs to deliver Medicare services. 545 00:29:56.680 --> 00:29:59.420 ACOs are made up of groups of providers 546 00:29:59.420 --> 00:30:01.090 that accept the responsibility 547 00:30:01.090 --> 00:30:06.090 for the overall care of specific Medicare beneficiaries. 548 00:30:06.100 --> 00:30:10.320 ACOs contractually share this responsibility with CMS. 549 00:30:10.320 --> 00:30:13.660 If care management leads to Medicare savings, 550 00:30:13.660 --> 00:30:17.810 then CMS will share those savings with the ACO. 551 00:30:17.810 --> 00:30:21.420 If care management leads to an increase in Medicare costs, 552 00:30:21.420 --> 00:30:25.100 then the ACO will suffer a financial loss. 553 00:30:25.100 --> 00:30:26.590 As of 2017, 554 00:30:26.590 --> 00:30:30.060 there were over 10 million Medicare beneficiaries 555 00:30:30.060 --> 00:30:33.300 receiving care through ACO models. 556 00:30:33.300 --> 00:30:36.340 There are many other Medicare reforms being considered 557 00:30:36.340 --> 00:30:39.690 among policy makers and healthcare payers. 558 00:30:39.690 --> 00:30:42.410 For example, there is an increased interest 559 00:30:42.410 --> 00:30:45.410 in the use of bundled payments to reduce costs, 560 00:30:45.410 --> 00:30:48.010 which we will discuss in a future chapter. 561 00:30:48.010 --> 00:30:51.070 Restructuring Medicare benefits and cost sharing, 562 00:30:51.070 --> 00:30:55.010 further increasing premiums for higher income beneficiaries 563 00:30:55.010 --> 00:30:58.083 and raising the Medicare eligibility age. 564 00:30:59.980 --> 00:31:02.200 In the longterm insurance companies 565 00:31:02.200 --> 00:31:05.310 that offer Medicare Advantage plan products 566 00:31:05.310 --> 00:31:09.380 will continue to evolve based on changes in Medicare policy 567 00:31:09.380 --> 00:31:11.550 and innovation directives. 568 00:31:11.550 --> 00:31:14.790 MA plan decisions will have a great impact 569 00:31:14.790 --> 00:31:18.860 on beneficiaries plan selection, out-of-pocket spending 570 00:31:18.860 --> 00:31:21.390 and provider access. 571 00:31:21.390 --> 00:31:23.890 Meanwhile, the Medicare program itself 572 00:31:23.890 --> 00:31:26.530 faces significant future challenges 573 00:31:26.530 --> 00:31:29.600 such as the increase in the number of Medicare eligible 574 00:31:29.600 --> 00:31:32.010 as the US population ages, 575 00:31:32.010 --> 00:31:34.780 and the rising cost of healthcare. 576 00:31:34.780 --> 00:31:36.750 Policy leaders will need to address 577 00:31:36.750 --> 00:31:41.340 the financial stability of Medicare as we approach 2026 578 00:31:41.340 --> 00:31:44.940 when the Hospital Insurance Trust Fund will be depleted, 579 00:31:44.940 --> 00:31:46.770 but perhaps the biggest challenge 580 00:31:46.770 --> 00:31:50.200 is one that has always plagued you as healthcare 581 00:31:50.200 --> 00:31:53.550 finding the right balance between healthcare quality 582 00:31:53.550 --> 00:31:55.573 and healthcare costs containment.