Chapter 18 Review Questions

Original Medicare: features of Plan B

Medical Insurance: a voluntary program that covers physicians' fees and related medical services covered services of Plan B - physician - clinical laboratory - home health care - outpatient hospital - blood

Medicare Part C options

Medicare Part C Options are parallel to private managed care - Medicare HMOs - Medicare PPO - Medicare Special Needs plan - Medicare Private Fee-for-service plan

is the following loss covered under Medicare Part A or Medicare Part B: Majory, age 66, is hospitalized for five days because of a heart attack.

Part A

describe workers compensation

a social insurance program that provides medical care, cash benefits, and rehabilitation services to workers who are injured or sick from job-related accidents or disease - the benefits are important in reducing the economic uncertainty that may result from a job-related disability

eligibility for unemployment insurance

an unemployed worker must: - have qualifying wages and employment during the base year - be able and available for work - be actively seeking work - be free from disqualification - meet a one-week waiting period

Medicare Part C option: Medicare PPO

beneficiaries can generally see any doctor or provider that accepts Medicare patients - members do not need a referral from a primary care doctor to see a specialist

describe survivor benefits

can be paid to dependents of a deceased worker who is either fully or currently insured

describe disability-income benefits

can be paid to disabled workers who meet certain eligibility requirements - the benefits provide protection against the loss of income during a long-term disability - the worker must meet a 5-month waiting period, and satisfy the definition of disability - the worker must have a physical or mental condition that prevents him or her from doing any substantial gainful activity and is expected to last at least 12 months or is expected to result in death

Medicare Part C option: Medicare Special Needs Plan

focused care for specific groups of people, such as those with chronic illnesses

workers compensation: contributory negligence doctrine

injured workers could not collect damages if they contributed in any way to the injury

Medicare Part C option: Medicare HMOs

managed care plans operated by private insurers - the plan may require members to choose a primary care physician and get a referral to see a specialist - if the plan covers prescription drugs, members must pay a co-payment or coinsurance charge for each covered prescription

unemployment insurance coverage

most private firms, state and local governments, and nonprofit organizations - private firms are subject to the federal unemployment tax

workers compensation: workers compensation laws

most states passed workers compensation laws by 1920 - coverage is based on the fundamental principle of liability without fault - employees do not have to sue their employers

would the following person be eligible for OASDI retirement benefits: A divorces spouse, age 55, who was married to a retired worker for six years.

no; not over age 62 and marriage did not last for at least 10 years

is the following loss covered under Medicare Part A or Medicare Part B: Jeb, age 62, has prostate cancer and visits his family doctor for treatment.

not eligible under either

definition of disability used in the OASDI system

number of work credits required for disability benefits depends on your age at the time of disability - generally, 40 credits are needed: 20 credits must be earned in the last 10 years ending with the year you become disabled - younger workers under age 31 may qualify for disability benefits with fewer credits

describe Medicare Advantage Plans: Part C

option to choose private health plans instead of Original Medicare operated by the government - Medicare pays a set monthly amount to the private plan - most plans provide extra benefits and have lower co-payments than the original Medicare plan

workers compensation: employer liability laws

passed between 1885 and 1910 improved the legal position of injured workers - but, workers still had too sue their employers to collect for their injuries

explain how the OASDI and Medicare programs are funded

requires employer and employee contributions under the Federal Insurance Contributions Act (FICA)

OASDI retirement benefits

social security retirement benefits are an important source of income for most retired workers - full retirement age for unreduced benefits is age 65 (66 if born 1943 - 1954, but will gradually increase to 67) - workers and their spouses can retire at age 62 with actuarially reduced benefits

describe unemployment insurance

the federal and state governments provide unemployment insurance - programs pay weekly cash benefits to workers who are involuntarily unemployed - cash benefits are paid during periods of short-term involuntary unemployment - applicants are encouraged through local employment offices to seek employment - unemployment benefits help stabilize the economy during recessionary periods

workers compensation: fellow-servant doctrine

the injured worker could not collect damages if the injury resulted from the negligence of a fellow worker

workers compensation: assumption-of-risk doctrine

the injured worker could not collect if he or she had advanced knowledge of the dangers of the occupation

Medicare Part C option: Medicare Private Fee-for-service plan

the private company, rather than Medicare, decides how much it will pay and the amounts members must pay for the services provided

workers compensation eligibility

two eligibility requirements must be met to receive benefits: - the disabled person must work in a covered occupation - the injury or disease must arise out of and in the course of employment

workers compensation: common law of industrial accidents (1837)

workers injured on the job had to sue their employers and prove negligence before they could collect damages

would the following person be eligible for OASDI retirement benefits: A retired worker's spouse, age 45, who is caring for the 12-year-old daughter of the retired worker.

yes: a spouse with dependent children younger than age 16 are eligible

would the following person be eligible for OASDI retirement benefits: A spouse, age 63, of a retired worker who is no longer caring for an unmarried child under age 18.

yes: spouses of a retired worker are eligible

would the following person be eligible for OASDI retirement benefits: A retired worker's unmarried son, age 25, who became disabled at age 15 because of an auto accident.

yes: unmarried disabled children are eligible

4 benefits of workers compensation

- Medical care generally is covered in full with no limitations - Disability-income benefits can be paid after the disabled worker satisfies a waiting period - Death benefits can be paid to eligible survivors if the worker dies because of a job-related accident or disease - Rehabilitation services provided by all states to restore disabled workers to productive employment

Medicare options

- Medicare covers the medical expenses of most persons age 65 and older - the program also includes prescription drug plans and health care plans of private insurers - beneficiaries can select from several plans

describe Medicare Prescription Drug Coverage: Part D

- beneficiaries in the original Medicare plan can add prescription drug coverage by joining a stand-alone plan - monthly premiums depend on the plan chosen, and vary in the cost and types of drugs covered - beneficiaries pay part of the cost of prescription drugs, and Medicare pays part of the cost - plans must provide at least standard coverage - prescription drug coverage may be provided in Medicare C Plans (Medicare Advantage)

other OASDI retirement benefits

- each year of work adds another year of earnings to your Social Security earnings record - delayed retirement credit - cash benefits are automatically adjusted each year for changes in the cost of living - the program has an earnings test

4 eligibility requirements for Unemployment Compensation Insurance

- earn qualifying wages and employment during the base year - be able to work and be available for work - actively seek work - meet a waiting period

workers compensation disability benefits

- if the injured worker is still disabled after a certain number of days or weeks, most states pay disability benefits retroactively to the date of injury

Original Medicare: features of Plan A

- inpatient hospital stays - other services - hospital inpatient services reimbursed under a prospective payment system: a flat amount is paid for each service based on its diagnosis-related group (DRG) - does not cover long-term care

other services of Plan A

- inpatient skilled nursing facility care - home health care - hospice care - blood transfusions

what type of unemployment is covered under a typical state unemployment insurance program?

- most states use a formula that pays weekly benefits based on a fraction of the worker's high quarter wages - the maximum duration of regular benefits is limited to 26 weeks in most states

objectives of workers compensation

- provide broad coverage of employees for job-related accidents and disease - provide substantial protection against the loss of income - provide sufficient medical care and rehabilitation services - encourage firms to reduce job-related accidents and develop effective safety programs - reduce litigation

4 basic objectives of Unemployment Compensation Insurance

- provide cash income during involuntary unemployment - help unemployed workers find jobs - encourage employers to stabilize employment - help stabilize the economy

how do workers compensation programs classify disabilities

- temporary total - permanent total - temporary partial - permanent partial temporary total disability claims are the most common

reasons for social insurance programs in the US

- to help solve complex social problems - to provide coverage for perils that are difficult to insure privately - to provide a base of economic security to the population

worker eligibility for Social Security: currently insured status

- you have earned at least 6 credits in the past 13 calendar quarters - makes you eligible for survivor benefits

worker eligibility for Social Security: fully insured status

- you must have 40 credits - makes you eligible for retirement and survivor benefits

basic characteristics of social insurance programs

1. most social insurance programs are compulsory 2. programs are designed to provide a floor of income 3. program benefits are based largely on social adequacy rather than individual equity 4. benefits are loosely related to thee workers' earnings programs, benefits, and benefit formulas are prescribed by law 5. a formal means test is not required: a means test involves disclosing income and assets 6. full funding of benefits may be unnecessary 7. programs are designed to be financially self-supporting