1. Lecture 5 Medicare and Other Social Insurance Programs Medicare Unemployment Insurance Temporary Disability Laws Workers’ Compensation

2. Medicare Eligibility –Retirees 65 or older –Dependents 65 or older of workers over 62 –Survivors 65 or older –Disabled persons after 2 years of benefits –Workers, spouses or dependents for end-stage kidney disease Anyone not eligible who is 65 or older can enroll voluntarily Primary/secondary rules

3. Medicare Benefits Part A –No cost (except for voluntary enrollment) –Hospital benefits –Skilled nursing facility benefits –Home health care benefits –Hospice benefits Part B –Monthly premium ($45.50 for 1999) –Medical expenses not covered under Part A –Numerous exclusions –Deductible and coinsurance –Fee limitations on doctors

4. Medicare Part C Medicare+Choice Balanced Budget Act of 1997 Voluntary alternatives to traditional Medicare Must be eligible for Parts A and B and elect to replace them with Part C Receive supplemental benefits 7 million covered (17%)

5. Medicare Part C 3 Types of plans to choose from Coordinated Care Plans Provider Sponsor Organizations Medicare+Choice MSA Medicare Risk HMOs eliminated Provider receives a uniform capitation payment Annual open enrollment period

6. Unemployment Insurance Benefits are taxable income to the recipient Congress instituted this program in 1935 Objectives –Provide income to workers during temporary unemployment –Help unemployed find jobs –Encourage employers to stabilize employment –Maintain a stable labor supply

7. Unemployment Insurance - (cont.) Financing of benefits –Federal tax: 0.8% of covered payroll –State tax: experience rated Eligibility –Prior attachment to labor force –Able and available to work –Actively seeking work –Prescribed waiting period –Free of disqualification Voluntarily leaving job Discharged for misconduct Labor dispute

8. Unemployment Insurance - (cont.) Benefits –Vary by state –Typically 50% of earnings –Maximum benefits range from $180 to $350/week –Paid for 26 weeks (can be extended by law in periods of high unemployment)

9. Temporary Disability Laws Apply in California, Hawaii, New Jersey, New York, Rhode Island and Puerto Rico Covers nonoccupational disability Eligibility –Employment requirement –Definition of disability –Waiting period Benefits are taxable income to recipient

10. Workers’ Compensation Benefits are tax free to the recipient Each state has its own law Eligibility –Covered occupation –Accidental occupational injuries arising out of and in the course of employment –Also coverage for occupational disease

11. Workers’ Compensation - (cont.) Benefits –Medical care No deductible, coinsurance or limits –Disability income Approximately 2/3 coverage wages –Death benefits –Rehabilitative services

12. Workers’ Compensation - (cont.) Problems –Extent of coverage –Adequacy of benefits –Increasing costs Medical costs Increased benefits Expansion of coverage Increased litigation Fraud –Concept of 24-Hour Coverage