2006 State Report > Economics > Medicare
Economics: Medicare
Medicare is health insurance offered by the federal government to people aged 65 and older and to some younger people with disabilities. Medicare has two parts:
- Hospital Insurance (Medicare Part A) helps pay for hospital bills
- Medical Insurance (Medicare Part B) helps pay for doctor bills
Most people get Medicare Part A at no monthly cost. Part A typically covers care in hospitals as an inpatient, critical access hospitals, skilled nursing facilities, hospice care, and some home health care. Medicare Part B coverage is optional, and enrollees must pay a monthly premium for coverage. In 2006, Medicare Part B coverage cost $88.50 per month. Part B typically covers doctors' services, durable medical equipment, outpatient hospital care, and other medical services that Part A does not cover, such as the services of physical and occupational therapists, and some home health care.
Most South Carolinians enroll in Medicare once they reach age 65. In 2003, 94.9 percent of the estimated population aged 65 and over was enrolled in Medicare Part A and/or Part B.
Medicare Enrollment for South Carolina's 65+ Population in 2003
Source: Total estimated 65+ population in 2003 is from the U.S. Census Bureau, Population Division. Enrollment data is from the Centers for Medicare and Medicaid Services.
Because of the size and administrative structure of the Medicare program, it has been designated as a program at high risk for abuse by the General Accounting Office. The U.S. General Accounting Office estimates that $1 of every $7 spent on Medicare is paid inappropriately due to error, fraud, or abuse. The most common forms of Medicare fraud include:
- Billing for services not furnished,
- Misrepresenting the diagnosis to justify payment,
- Soliciting, offering, or receiving a kickback,
- Unbundling or "exploding" charges,
- Falsifying certificates of medical necessity, plans of treatment, and medical records to justify payment, and
- Billing for a service not furnished as billed.
Since 1995, the U.S. Administration on Aging has provided grants to support local Senior Medicare Patrols across the nation. These grants are used to develop public information campaigns and to train retired professionals to help older citizens in identifying and reporting potential waste, fraud, and abuse. Since 1997, complaints reported by Senior Medicaid Patrol projects have saved the Medicare and Medicaid programs $104.2 million. In 2005, the Administration on Aging awarded $9.4 million to 64 Senior Medicaid Patrol projects nationwide.
In South Carolina the Senior Medicare Patrol Program is administered by the Lieutenant Governor's Office on Aging. In fiscal year 2004-05, the program served 12,507 persons through individual contacts, suspected fraud complaints, or outreach events. An additional 67,820 people were reached through media events.
With the new Medicare prescription drug benefit going into effect in 2006, it will be even more important for seniors to be aware of Medicare fraud. Suspected Medicare fraud can be reported to the Medicare Fraud Hotline at 1-800-447-8477.