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Medical care refers to primary and acute care provided in medical settings—such as doctors’ offices, hospitals and clinics—and administered by licensed practitioners. This section focuses on the various forms of public financing available to older adults to pay for medical care.
Medicare, a federal program enacted by Title XVIII of the Social Security Act, finances medical care for certain populations. It provides nearly all older adults in the U.S. with health insurance, regardless of wealth. In 2003, Medicare covered 41 million people at a cost of $271 billion, making it by far the largest source of medical care funding for older adults.
Parts of Medicare coverage are offered at no premium charge to Medicare-qualified older adults, while other parts require the older adult to pay premiums. Medicare does require payment of deductibles and co-pays. Low-income Medicare beneficiaries can receive assistance with Medicare costs through the Medicare Savings program, which is administered by state Medicaid programs. A person who has both Medicare and Medicaid is referred to as “dually eligible.”
Additionally, older adult military veterans have access to a unique package of health benefits through the Veterans Health Administration.
The Medicare Prescription Drug Improvement and Modernization Act of 2003 (MMA) introduced substantial changes to Medicare. Most significantly, it offers prescription drug benefits to participants. While several states fund prescription drug programs for older adults, state-provided drug coverage will undergo a major change as the new Medicare drug benefit is implemented.
Additionally, the MMA expands the number of choices that older adults need to make about their health coverage, particularly if they live in urban areas where several private health and drug plans may be competing for their enrollment. In that environment, the importance of effective health insurance counseling will increase.
It’s important to note that Medicare does not cover long term care and supportive services. Rather, these services are publicly financed through Medicaid, which is available to low-income older adults. This dual system results in many coordination challenges between Medicare and Medicaid. Recently, many within the medical and long term care communities have been promoting a chronic care model to bridge the two worlds. A chronic care model recognizes that our current system of health care is designed to address acute episodes, and needs to be reoriented to the fact that many older people have chronic conditions that must be addressed over long periods of time and across care settings. For more information on long term care financing, see Financing Long Term Care.