title: Medicare (United States)

text: The Specialty Society Relative Value Scale Update Committee (or Relative Value Update Committee; RUC), composed of physicians associated with the American Medical Association, advises the government about pay standards for Medicare patient procedures performed by doctors and other professionals under Medicare Part B. A similar but different CMS process determines the rates paid for acute care and other hospitals—including skilled nursing facilities—under Medicare Part A. The rates paid for both Part A and Part B type services under Part C are whatever is agreed upon between the sponsor and the provider. The amounts paid for mostly self-administered drugs under Part D are whatever is agreed upon between the sponsor (almost always through a pharmacy benefit manager also used in commercial insurance) and pharmaceutical distributors and/or manufacturers.


title: Medicare (United States)

text: The expenditures from the trust funds under Parts A and B are fee for service whereas the expenditures from the trust funds under Parts C and D are capitated. In particular, it is important to understand that Medicare itself does not purchase either self-administered or professionally administered drugs. In Part D, the Part D Trust Fund helps beneficiaries purchase drug insurance. For Part B drugs, the trust funds reimburse the professional that administers the drugs and allows a mark up for that service.


title: Medicare (United States)

text: Part A's inpatient admitted hospital and skilled nursing coverage is largely funded by revenue from a 2.9% payroll tax levied on employers and workers (each pay 1.45%). Until December 31, 1993, the law provided a maximum amount of compensation on which the Medicare tax could be imposed annually, in the same way that the Social Security payroll tax operates. Beginning on January 1, 1994, the compensation limit was removed. Self-employed individuals must calculate the entire 2.9% tax on self-employed net earnings (because they are both employee and employer), but they may deduct half of the tax from the income in calculating income tax. Beginning in 2013, the rate of Part A tax on earned income exceeding $200,000 for individuals ($250,000 for married couples filing jointly) rose to 3.8%, in order to pay part of the cost of the subsidies mandated by the Affordable Care Act.


title: Medicare (United States)

text: Parts B and D are partially funded by premiums paid by Medicare enrollees and general U.S. Treasury revenue (to which Medicare beneficiaries contributed and may still contribute). In 2006, a surtax was added to Part B premium for higher-income seniors to partially fund Part D. In the Affordable Care Act legislation of 2010, another surtax was then added to Part D premium for higher-income seniors to partially fund the Affordable Care Act and the number of Part B beneficiaries subject to the 2006 surtax was doubled, also partially to fund PPACA.


title: Medicare (United States)

text: Parts A and B/D use separate trust funds to receive and disburse the funds mentioned above. The Medicare Part C program uses these same two trust funds as well at a proportion determined by the CMS reflecting that Part C beneficiaries are fully on Parts A and B of Medicare just as all other beneficiaries, but that their medical needs are paid for through a sponsor (most often an integrated health delivery system or spin out) to providers rather than "fee for service" (FFS) through an insurance company called a Medicare Administrative Contractor to providers.


title: Medicare (United States)

text: In 2018, Medicare spending was over $740 billion, about 3.7% of U.S. gross domestic product and over 15% of total US federal spending. Because of the two Trust funds and their differing revenue sources (one dedicated and one not), the Trustees analyze Medicare spending as a percent of GDP rather than versus the Federal budget.


title: Medicare (United States)

text: Retirement of the Baby Boom generation is projected by 2030 to increase enrollment to more than 80 million. In addition, the fact that the number of workers per enrollee will decline from 3.7 to 2.4 and that overall health care costs in the nation are rising pose substantial financial challenges to the program. Medicare spending is projected to increase from just over $740 billion in 2018 to just over $1.2 trillion by 2026, or from 3.7% of GDP to 4.7%. Baby-boomers are projected to have longer life spans, which will add to the future Medicare spending. The 2019 Medicare Trustees Report estimates that spending as a percent of GDP will grow to 6% by 2043 (when the last of the baby boomers turns 80) and then flatten out to 6.5% of GDP by 2093. In response to these financial challenges, Congress made substantial cuts to future payouts to providers (primarily acute care hospitals and skilled nursing facilities) as part of PPACA in 2010 and the Medicare Access and CHIP Reauthorization Act of 2015 (MACRA) and policymakers have offered many additional competing proposals to reduce Medicare costs further.


title: Medicare (United States)

text: Cost reduction is influenced by factors including reduction in inappropriate and unnecessary care by evaluating evidence-based practices as well as reducing the amount of unnecessary, duplicative, and inappropriate care. Cost reduction may also be effected by reducing medical errors, investment in healthcare information technology, improving transparency of cost and quality data, increasing administrative efficiency, and by developing both clinical/non-clinical guidelines and quality standards.


title: Medicare (United States)

text: In general, all persons 65 years of age or older who have been legal residents of the United States for at least five years are eligible for Medicare. People with disabilities under 65 may also be eligible if they receive Social Security Disability Insurance (SSDI) benefits. Specific medical conditions may also help people become eligible to enroll in Medicare.


title: Medicare (United States)

text: People qualify for Medicare coverage, and Medicare Part A premiums are entirely waived, if the following circumstances apply:


title: Medicare (United States)

text: Those who are 65 and older who choose to enroll in Part A Medicare must pay a monthly premium to remain enrolled in Medicare Part A if they or their spouse have not paid the qualifying Medicare payroll taxes.


title: Medicare (United States)

text: People with disabilities who receive SSDI are eligible for Medicare while they continue to receive SSDI payments; they lose eligibility for Medicare based on disability if they stop receiving SSDI. The coverage does not begin until 24 months after the SSDI start date. The 24-month exclusion means that people who become disabled must wait two years before receiving government medical insurance, unless they have one of the listed diseases. The 24-month period is measured from the date that an individual is determined to be eligible for SSDI payments, not necessarily when the first payment is actually received. Many new SSDI recipients receive "back" disability pay, covering a period that usually begins six months from the start of disability and ending with the first monthly SSDI payment.


title: Medicare (United States)

text: Some beneficiaries are dual-eligible. This means they qualify for both Medicare and Medicaid. In some states for those making below a certain income, Medicaid will pay the beneficiaries' Part B premium for them (most beneficiaries have worked long enough and have no Part A premium), as well as some of their out-of-pocket medical and hospital expenses.


title: Medicare (United States)

text: Medicare has four parts: loosely speaking Part A is Hospital Insurance. Part B is Medical Services Insurance. Medicare Part D covers many prescription drugs, though some are covered by Part B. In general, the distinction is based on whether or not the drugs are self-administered but even this distinction is not total. Public Part C Medicare health plans, the most popular of which are branded Medicare Advantage, are another way for Original Medicare (Part A and B) beneficiaries to receive their Part A, B and D benefits; simply, Part C is capitated fee and Original Medicare is fee for service. All Medicare benefits are subject to medical necessity.


title: Medicare (United States)

text: The original program included Parts A and B. Part-C-like plans have existed as demonstration projects in Medicare since the early 1970s, but the Part was formalized by 1997 legislation. Part D was enacted by 2003 legislation and introduced on January 1, 2006. Previously, coverage for self-administered prescription drugs (if desired) was obtained by private insurance or through a public Part C plan (or by one of its predecessor demonstration plans before enactment).


title: Medicare (United States)

text: In April 2018, CMS began mailing out new Medicare cards with new ID numbers to all beneficiaries. Previous cards had ID numbers containing beneficiaries' Social Security numbers; the new ID numbers are randomly generated and not tied to any other personally identifying information.


title: Medicare (United States)

text: Part A covers inpatient hospital stays where the beneficiary has been formally admitted to the hospital, including semi-private room, food, and tests. As of January 1, 2020, Medicare Part A had an inpatient hospital deductible of $1408, coinsurance per day as $352 after 61 days' confinement within one "spell of illness", coinsurance for "lifetime reserve days" (essentially, days 91–150 of one or more stay of more than 60 days) of $704 per day. The structure of coinsurance in a Skilled Nursing Facility (following a medically necessary hospital confinement of three nights in row or more) is different: zero for days 1–20; $167.50 per day for days 21–100. Many medical services provided under Part A (e.g., some surgery in an acute care hospital, some physical therapy in a skilled nursing facility) are covered under Part B. These coverage amounts increase or decrease yearly on the first day of the year.


title: Medicare (United States)

text: The maximum length of stay that Medicare Part A covers in a hospital admitted inpatient stay or series of stays is typically 90 days. The first 60 days would be paid by Medicare in full, except one copay (also and more commonly referred to as a "deductible") at the beginning of the 60 days of $1340 as of 2018. Days 61–90 require a co-payment of $335 per day as of 2018. The beneficiary is also allocated "lifetime reserve days" that can be used after 90 days. These lifetime reserve days require a copayment of $670 per day as of 2018, and the beneficiary can only use a total of 60 of these days throughout their lifetime. A new pool of 90 hospital days, with new copays of $1340 in 2018 and $335 per day for days 61–90, starts only after the beneficiary has 60 days continuously with no payment from Medicare for hospital or Skilled Nursing Facility confinement.


title: Medicare (United States)

text: Some "hospital services" are provided as inpatient services, which would be reimbursed under Part A; or as outpatient services, which would be reimbursed, not under Part A, but under Part B instead. The "Two-Midnight Rule" decides which is which. In August 2013, the Centers for Medicare and Medicaid Services announced a final rule concerning eligibility for hospital inpatient services effective October 1, 2013. Under the new rule, if a physician admits a Medicare beneficiary as an inpatient with an expectation that the patient will require hospital care that "crosses two midnights", Medicare Part A payment is "generally appropriate". However, if it is anticipated that the patient will require hospital care for less than two midnights, Medicare Part A payment is generally not appropriate; payment such as is approved will be paid under Part B. The time a patient spends in the hospital before an inpatient admission is formally ordered is considered outpatient time. But, hospitals and physicians can take into consideration the pre-inpatient admission time when determining if a patient's care will reasonably be expected to cross two midnights to be covered under Part A. In addition to deciding which trust fund is used to pay for these various outpatient versus inpatient charges, the number of days for which a person is formally considered an admitted patient affects eligibility for Part A skilled nursing services.


title: Medicare (United States)

text: Medicare penalizes hospitals for readmissions. After making initial payments for hospital stays, Medicare will take back from the hospital these payments, plus a penalty of 4 to 18 times the initial payment, if an above-average number of patients from the hospital are readmitted within 30 days. These readmission penalties apply after some of the most common treatments: pneumonia, heart failure, heart attack, COPD, knee replacement, hip replacement. A study of 18 states conducted by the Agency for Healthcare Research and Quality (AHRQ) found that 1.8 million Medicare patients aged 65 and older were readmitted within 30 days of an initial hospital stay in 2011; the conditions with the highest readmission rates were congestive heart failure, sepsis, pneumonia, and COPD and bronchiectasis.


title: Medicare (United States)

text: The highest penalties on hospitals are charged after knee or hip replacements, $265,000 per excess readmission. The goals are to encourage better post-hospital care and more referrals to hospice and end-of-life care in lieu of treatment, while the effect is also to reduce coverage in hospitals that treat poor and frail patients. The total penalties for above-average readmissions in 2013 are $280 million, for 7,000 excess readmissions, or $40,000 for each readmission above the US average rate.


title: Medicare (United States)

text: Part A fully covers brief stays for rehabilitation or convalescence in a skilled nursing facility and up to 100 days per medical necessity with a co-pay if certain criteria are met:


title: Medicare (United States)

text: The first 20 days would be paid for in full by Medicare with the remaining 80 days requiring a co-payment of $167.50 per day as of 2018. Many insurance group retiree, Medigap and Part C insurance plans have a provision for additional coverage of skilled nursing care in the indemnity insurance policies they sell or health plans they sponsor. If a beneficiary uses some portion of their Part A benefit and then goes at least 60 days without receiving facility-based skilled services, the 90-day hospital clock and 100-day nursing home clock are reset and the person qualifies for new benefit periods.


title: Medicare (United States)

text: Hospice benefits are also provided under Part A of Medicare for terminally ill persons with less than six months to live, as determined by the patient's physician. The terminally ill person must sign a statement that hospice care has been chosen over other Medicare-covered benefits, (e.g. assisted living or hospital care). Treatment provided includes pharmaceutical products for symptom control and pain relief as well as other services not otherwise covered by Medicare such as grief counseling. Hospice is covered 100% with no co-pay or deductible by Medicare Part A except that patients are responsible for a copay for outpatient drugs and respite care, if needed.


title: Medicare (United States)

text: Part B medical insurance helps pay for some services and products not covered by Part A, generally on an outpatient basis (but can also apply to acute care settings per physician designated observation status at a hospital). Part B is optional. It is often deferred if the beneficiary or his/her spouse is still working and has group health coverage through that employer. There is a lifetime penalty (10% per year on the premium) imposed for not enrolling in Part B when first eligible.


title: Medicare (United States)

text: Part B coverage begins once a patient meets his or her deductible ($183 for 2017), then typically Medicare covers 80% of the RUC-set rate for approved services, while the remaining 20% is the responsibility of the patient, either directly or indirectly by private group retiree or Medigap insurance. Part B coverage covers 100% for preventive services such as yearly mammogram screenings, osteoporosis screening, and many other preventive screenings.


title: Medicare (United States)

text: Part B coverage includes outpatient physician services, visiting nurse, and other services such as x-rays, laboratory and diagnostic tests, influenza and pneumonia vaccinations, blood transfusions, renal dialysis, outpatient hospital procedures, limited ambulance transportation, immunosuppressive drugs for organ transplant recipients, chemotherapy, hormonal treatments such as Lupron, and other outpatient medical treatments administered in a doctor's office. It also includes chiropractic care. Medication administration is covered under Part B if it is administered by the physician during an office visit. No prior authorization is required for any services rendered.


title: Medicare (United States)

text: Part B also helps with durable medical equipment (DME), including but not limited to canes, walkers, lift chairs, wheelchairs, and mobility scooters for those with mobility impairments. Prosthetic devices such as artificial limbs and breast prosthesis following mastectomy, as well as one pair of eyeglasses following cataract surgery, and oxygen for home use are also covered.


title: Medicare (United States)

text: Complex rules control Part B benefits, and periodically issued advisories describe coverage criteria. On the national level these advisories are issued by CMS, and are known as National Coverage Determinations (NCD). Local Coverage Determinations (LCD) apply within the multi-state area managed by a specific regional Medicare Part B contractor (which is an insurance company), and Local Medical Review Policies (LMRP) were superseded by LCDs in 2003. Coverage information is also located in the CMS Internet-Only Manuals (IOM), the Code of Federal Regulations (CFR), the Social Security Act, and the Federal Register.


title: Medicare (United States)

text: The Monthly Premium for Part B for 2019 is $135.50 per month but anyone on Social Security in 2019 is "held harmless" from that amount if the increase in their SS monthly benefit does not cover the increase in their Part B premium from 2019 to 2020. This hold harmless provision is significant in years when SS does not increase but that is not the case for 2020. There are additional income-weighted surtaxes for those with incomes more than $85,000 per annum.


title: Medicare (United States)

text: With the passage of the Balanced Budget Act of 1997, Medicare beneficiaries were formally given the option to receive their Original Medicare benefits through capitated health insurance Part C health plans, instead of through the Original fee for service Medicare payment system. Many had previously had that option via a series of demonstration projects that dated back to the early 1970s. These Part C plans were initially known in 1997 as "Medicare+Choice". As of the Medicare Modernization Act of 2003, most "Medicare+Choice" plans were re-branded as "Medicare Advantage" (MA) plans (though MA is a government term and might not even be "visible" to the Part C health plan beneficiary). Other plan types, such as 1876 Cost plans, are also available in limited areas of the country. Cost plans are not Medicare Advantage plans and are not capitated. Instead, beneficiaries keep their Original Medicare benefits while their sponsor administers their Part A and Part B benefits. The sponsor of a Part C plan could be an integrated health delivery system or spin-out, a union, a religious organization, an insurance company or other type of organization.


title: Medicare (United States)

text: Public Part C Medicare Advantage and other Part C health plans are required to offer coverage that meets or exceeds the standards set by Original Medicare but they do not have to cover every benefit in the same way (the plan must be actuarially equivalent to Original Medicare benefits). After approval by the Centers for Medicare and Medicaid Services, if a Part C plan chooses to cover less than Original Medicare for some benefits, such as Skilled Nursing Facility care, the savings may be passed along to consumers by offering even lower co-payments for doctor visits (or any other plus or minus aggregation approved by CMS).


title: Medicare (United States)

text: Original "fee-for-service" Medicare Parts A and B have a standard benefit package that covers medically necessary care as described in the sections above that members can receive from nearly any hospital or doctor in the country (if that doctor or hospital accepts Medicare). Original Medicare beneficiaries who choose to enroll in a Part C Medicare Advantage or other Part C health plan instead give up none of their rights as an Original Medicare beneficiary, receive the same standard benefits—as a minimum—as provided in Original Medicare, and get an annual out of pocket (OOP) upper spending limit not included in Original Medicare. However, they must typically use only a select network of providers except in emergencies or for urgent care while travelling, typically restricted to the area surrounding their legal residence (which can vary from tens to over 100 miles depending on county). Most Part C plans are traditional health maintenance organizations (HMOs) that require the patient to have a primary care physician, though others are preferred provider organizations (which typically means the provider restrictions are not as confining as with an HMO). Others are hybrids of HMO and PPO called HMO-POS (for point of service) and a few public Part C health plans are actually fee-for-service hybrids.


title: Medicare (United States)

text: Public Part C Medicare Advantage health plan members typically also pay a monthly premium in addition to the Medicare Part B premium to cover items not covered by traditional Medicare (Parts A & B), such as the OOP limit, self-administered prescription drugs, dental care, vision care, annual physicals, coverage outside the United States, and even gym or health club memberships as well as—and probably most importantly—reduce the 20% co-pays and high deductibles associated with Original Medicare. But in some situations the benefits are more limited (but they can never be more limited than Original Medicare and must always include an OOP limit) and there is no premium. The OOP limit can be as low as $1500 and as high as but no higher than $6700. In some cases, the sponsor even rebates part or all of the Part B premium, though these types of Part C plans are becoming rare.


title: Medicare (United States)

text: Before 2003 Part C plans tended to be suburban HMOs tied to major nearby teaching hospitals that cost the government the same as or even 5% less on average than it cost to cover the medical needs of a comparable beneficiary on Original Medicare. The 2003-law payment framework/bidding/rebate formulas overcompensated some Part C plan sponsors by 7 percent (2009) on average nationally compared to what Original Medicare beneficiaries cost per person on average nationally that year and as much as 5 percent (2016) less nationally in other years (see any recent year's Medicare Trustees Report, Table II.B.1).


title: Medicare (United States)

text: The 2003 payment formulas succeeded in increasing the percentage of rural and inner-city poor that could take advantage of the OOP limit and lower co-pays and deductibles—as well as the coordinated medical care—associated with Part C plans. In practice, however, one set of Medicare beneficiaries received more benefits than others. The MedPAC Congressional advisory group found in one year the comparative difference for "like beneficiaries" was as high as 14% and have tended to average about 2% higher. The word "like" in the previous sentence is key. MedPAC does not include all beneficiaries in its comparisons and MedPAC will not define what it means by "like" but it apparently includes people who are only on Part A, which severely skews its percentage comparisons—see January 2017 MedPAC meeting presentations. The differences caused by the 2003-law payment formulas were almost eliminated by PPACA and have been almost totally phased out according to the 2018 MedPAC annual report, March 2018. One remaining special-payment-formula program—designed primarily for unions wishing to sponsor a Part C plan—is being phased out beginning in 2017. In 2013 and since, on average a Part C beneficiary cost the Medicare Trust Funds 2-5% less than a beneficiary on traditional fee for service Medicare, completely reversing the situation in 2006-2009 right after implementation of the 2003 law and restoring the capitated fee vs fee for service funding balance to its original intended parity level.


title: Medicare (United States)

text: The intention of both the 1997 and 2003 law was that the differences between fee for service and capitated fee beneficiaries would reach parity over time and that has mostly been achieved, given that it can never literally be achieved without a major reform of Medicare because the Part C capitated fee in one year is based on the fee for service spending the previous year.


title: Medicare (United States)

text: Enrollment in public Part C health plans, including Medicare Advantage plans, grew from about 1% of total Medicare enrollment in 1997 when the law was passed (the 1% representing people on pre-law demonstration programs) to about 37% in 2019. The absolute number of beneficiaries on Part C has increased even more dramatically on a percentage basis because of the large increase of people on Original Medicare since 1997. Almost all Medicare beneficiaries have access to at least two public Medicare Part C plans; most have access to three or more.


title: Medicare (United States)

text: Medicare Part D went into effect on January 1, 2006. Anyone with Part A or B is eligible for Part D, which covers mostly self-administered drugs. It was made possible by the passage of the Medicare Modernization Act of 2003. To receive this benefit, a person with Medicare must enroll in a stand-alone Prescription Drug Plan (PDP) or public Part C health plan with integrated prescription drug coverage (MA-PD). These plans are approved and regulated by the Medicare program, but are actually designed and administered by various sponsors including charities, integrated health delivery systems, unions and health insurance companies; almost all these sponsors in turn use pharmacy benefit managers in the same way as they are used by sponsors of health insurance for those not on Medicare. Unlike Original Medicare (Part A and B), Part D coverage is not standardized (though it is highly regulated by the Centers for Medicare and Medicaid Services). Plans choose which drugs they wish to cover (but must cover at least two drugs in 148 different categories and cover all or "substantially all" drugs in the following protected classes of drugs: anti-cancer; anti-psychotic; anti-convulsant, anti-depressants, immuno-suppressant, and HIV and AIDS drugs). The plans can also specify with CMS approval at what level (or tier) they wish to cover it, and are encouraged to use step therapy. Some drugs are excluded from coverage altogether and Part D plans that cover excluded drugs are not allowed to pass those costs on to Medicare, and plans are required to repay CMS if they are found to have billed Medicare in these cases.


title: Medicare (United States)

text: Under the 2003 law that created Medicare Part D, the Social Security Administration offers an Extra Help program to lower-income seniors such that they have almost no drug costs; in addition, approximately 25 states offer additional assistance on top of Part D. For beneficiaries who are dual-eligible (Medicare and Medicaid eligible) Medicaid may pay for drugs not covered by Part D of Medicare. Most of this aid to lower-income seniors was available to them through other programs before Part D was implemented.


title: Medicare (United States)

text: Coverage by beneficiary spending is broken up into four phases: deductible, initial spend, gap (infamously called the "donut hole"), and catastrophic. Under a CMS template, there is usually a $100 or so deductible before benefits commence (maximum of $415 in 2019) followed by the initial spend phase where the templated co-pay is 25%, followed by gap phase (where originally the templated co-pay was 100% but that will fall to 25% in 2020 for all drugs), followed by the catastrophic phase with a templated co-pay of about 5%. The beneficiaries' OOP spend amounts vary yearly but are approximately as of 2018 $1000 in the initial spend phase and $3000 to reach the catastrophic phase. This is just a template and about half of all Part D plans differ (for example, no initial deductible, better coverage in the gap) with permission of CMS, which it typically grants as long as the sponsor provides at least the actuarial equivalent value.


title: Medicare (United States)

text: No part of Medicare pays for all of a beneficiary's covered medical costs and many costs and services are not covered at all. The program contains premiums, deductibles and coinsurance, which the covered individual must pay out-of-pocket. A study published by the Kaiser Family Foundation in 2008 found the Fee-for-Service Medicare benefit package was less generous than either the typical large employer preferred provider organization plan or the Federal Employees Health Benefits Program Standard Option. Some people may qualify to have other governmental programs (such as Medicaid) pay premiums and some or all of the costs associated with Medicare.


title: Medicare (United States)

text: Most Medicare enrollees do not pay a monthly Part A premium, because they (or a spouse) have had 40 or more 3-month quarters in which they paid Federal Insurance Contributions Act taxes. The benefit is the same no matter how much or how little the beneficiary paid as long as the minimum number of quarters is reached. Medicare-eligible persons who do not have 40 or more quarters of Medicare-covered employment may buy into Part A for an annual adjusted monthly premium of:


title: Medicare (United States)

text: Most Medicare Part B enrollees pay an insurance premium for this coverage; the standard Part B premium for 2019 is $135.50 a month. A new income-based premium surtax schema has been in effect since 2007, wherein Part B premiums are higher for beneficiaries with incomes exceeding $85,000 for individuals or $170,000 for married couples. Depending on the extent to which beneficiary earnings exceed the base income, these higher Part B premiums are from 30% to 70% higher with the highest premium paid by individuals earning more than $214,000, or married couples earning more than $428,000.


title: Medicare (United States)

text: Medicare Part B premiums are commonly deducted automatically from beneficiaries' monthly Social Security deposits. They can also be paid quarterly via bill sent directly to beneficiaries or via deduction from a bank account. These alternatives are becoming more common because whereas the eligibility age for Medicare has remained at 65 per the 1965 legislation, the so-called Full Retirement Age for Social Security has been increased to over 66 and will go even higher over time. Therefore, many people delay collecting Social Security but join Medicare at 65 and have to pay their Part B premium directly.


title: Medicare (United States)

text: If you have higher income, you will pay an additional premium amount for Medicare Part B and Medicare prescription drug coverage. The additional amount is called the income-related monthly adjustment amount (IRMAA).


title: Medicare (United States)

text: Part C plans may or may not charge premiums (almost all do), depending on the plans' designs as approved by the Centers for Medicare and Medicaid Services. Part D premiums vary widely based on the benefit level.


title: Medicare (United States)

text: Part B—After beneficiaries meet the yearly deductible of $183.00 for 2017, they will be required to pay a co-insurance of 20% of the Medicare-approved amount for all services covered by Part B with the exception of most lab services, which are covered at 100%. Previously, outpatient mental health services was covered at 50%, but under the Medicare Improvements for Patients and Providers Act of 2008, it gradually decreased over several years and now matches the 20% required for other services. They are also required to pay an excess charge of 15% for services rendered by physicians who do not accept assignment.


title: Medicare (United States)

text: The deductibles, co-pays, and coinsurance charges for Part C and D plans vary from plan to plan. All Part C plans include an annual out-of-pocket (OOP) upper spend limit. Original Medicare does not include an OOP limit.


title: Medicare (United States)

text: Of the Medicare beneficiaries who are not dual eligible for both Medicare (around 10% are fully dual eligible) and Medicaid or that do not receive group retirement insurance via a former employer (about 30%) or do not choose a public Part C Medicare health plan (about 35%) or who are not otherwise insured (about 5%—e.g., still working and receiving employer insurance, on VA, etc.), almost all the remaining elect to purchase a type of private supplemental indemnity insurance policy called a Medigap plan (about 20%), to help fill in the financial holes in Original Medicare (Part A and B) in addition to public Part D. Note that the percentages add up to over 100% because many beneficiaries have more than one type of additional protection on top of Original Medicare.


title: Medicare (United States)

text: These Medigap insurance policies are standardized by CMS, but are sold and administered by private companies. Some Medigap policies sold before 2006 may include coverage for prescription drugs. Medigap policies sold after the introduction of Medicare Part D on January 1, 2006, are prohibited from covering drugs. Medicare regulations prohibit a Medicare beneficiary from being sold both a public Part C Medicare health plan and a private Medigap Policy. As with public Part C health plans, private Medigap policies are only available to beneficiaries who are already signed up for Original Medicare Part A and Part B. These policies are regulated by state insurance departments rather than the federal government although CMS outlines what the various Medigap plans must cover at a minimum. Therefore, the types and prices of Medigap policies vary widely from state to state and the degree of underwriting, discounts for new members, and open enrollment and guaranteed issue rules also vary widely from state to state.


title: Medicare (United States)

text: As of 2016, 11 policies are currently sold—though few are available in all states, and some are not available at all in Massachusetts, Minnesota and Wisconsin (although these states have analogs to the lettered Medigap plans). These plans are standardized with a base and a series of riders. These are Plan A, Plan B, Plan C, Plan D, Plan F, High Deductible Plan F, Plan G, Plan K, Plan L, Plan M, and Plan N. Cost is usually the only difference between Medigap policies with the same letter sold by different insurance companies in the same state. Unlike public Part C Medicare health Plans, Medigap plans have no networks, and any provider who accepts Original Medicare must also accept Medigap.


title: Medicare (United States)

text: All insurance companies that sell Medigap policies are required to make Plan A available, and if they offer any other policies, they must also make either Plan C or Plan F available as well, though Plan F is scheduled to sunset in the year 2020. Anyone who currently has a Plan F may keep it. Many of the insurance companies that offer Medigap insurance policies also sponsor Part C health plans but most Part C health plans are sponsored by integrated health delivery systems and their spin-offs, charities, and unions as opposed to insurance companies.


title: Medicare (United States)

text: Medicare contracts with regional insurance companies to process over one billion fee-for-service claims per year. In 2008, Medicare accounted for 13% ($386 billion) of the federal budget. In 2016 it is projected to account for close to 15% ($683 billion) of the total expenditures. For the decade 2010–2019 Medicare is projected to cost 6.4 trillion dollars.


title: Medicare (United States)

text: For institutional care, such as hospital and nursing home care, Medicare uses prospective payment systems. In a prospective payment system, the health care institution receives a set amount of money for each episode of care provided to a patient, regardless of the actual amount of care. The actual allotment of funds is based on a list of diagnosis-related groups (DRG). The actual amount depends on the primary diagnosis that is actually made at the hospital. There are some issues surrounding Medicare's use of DRGs because if the patient uses less care, the hospital gets to keep the remainder. This, in theory, should balance the costs for the hospital. However, if the patient uses more care, then the hospital has to cover its own losses. This results in the issue of "upcoding", when a physician makes a more severe diagnosis to hedge against accidental costs.


title: Medicare (United States)

text: Payment for physician services under Medicare has evolved since the program was created in 1965. Initially, Medicare compensated physicians based on the physician's charges, and allowed physicians to bill Medicare beneficiaries the amount in excess of Medicare's reimbursement. In 1975, annual increases in physician fees were limited by the Medicare Economic Index (MEI). The MEI was designed to measure changes in costs of physician's time and operating expenses, adjusted for changes in physician productivity. From 1984 to 1991, the yearly change in fees was determined by legislation. This was done because physician fees were rising faster than projected.


title: Medicare (United States)

text: The Omnibus Budget Reconciliation Act of 1989 made several changes to physician payments under Medicare. Firstly, it introduced the Medicare Fee Schedule, which took effect in 1992. Secondly, it limited the amount Medicare non-providers could balance bill Medicare beneficiaries. Thirdly, it introduced the Medicare Volume Performance Standards (MVPS) as a way to control costs.


title: Medicare (United States)

text: On January 1, 1992, Medicare introduced the Medicare Fee Schedule (MFS), a list of about 7,000 services that can be billed for. Each service is priced within the Resource-Based Relative Value Scale (RBRVS) with three Relative Value Units (RVUs) values largely determining the price. The three RVUs for a procedure are each geographically weighted and the weighted RVU value is multiplied by a global Conversion Factor (CF), yielding a price in dollars. The RVUs themselves are largely decided by a private group of 29 (mostly specialist) physicians—the American Medical Association's Specialty Society Relative Value Scale Update Committee (RUC).


title: Medicare (United States)

text: From 1992 to 1997, adjustments to physician payments were adjusted using the MEI and the MVPS, which essentially tried to compensate for the increasing volume of services provided by physicians by decreasing their reimbursement per service.


title: Medicare (United States)

text: In 1998, Congress replaced the VPS with the Sustainable Growth Rate (SGR). This was done because of highly variable payment rates under the MVPS. The SGR attempts to control spending by setting yearly and cumulative spending targets. If actual spending for a given year exceeds the spending target for that year, reimbursement rates are adjusted downward by decreasing the Conversion Factor (CF) for RBRVS RVUs.


title: Medicare (United States)

text: In 2002, payment rates were cut by 4.8%. In 2003, payment rates were scheduled to be reduced by 4.4%. However, Congress boosted the cumulative SGR target in the Consolidated Appropriation Resolution of 2003 (P.L. 108–7), allowing payments for physician services to rise 1.6%. In 2004 and 2005, payment rates were again scheduled to be reduced. The Medicare Modernization Act (P.L. 108–173) increased payments by 1.5% for those two years.


title: Medicare (United States)

text: In 2006, the SGR mechanism was scheduled to decrease physician payments by 4.4%. (This number results from a 7% decrease in physician payments times a 2.8% inflation adjustment increase.) Congress overrode this decrease in the Deficit Reduction Act (P.L. 109–362), and held physician payments in 2006 at their 2005 levels. Similarly, another congressional act held 2007 payments at their 2006 levels, and HR 6331 held 2008 physician payments to their 2007 levels, and provided for a 1.1% increase in physician payments in 2009. Without further continuing congressional intervention, the SGR is expected to decrease physician payments from 25% to 35% over the next several years.


title: Medicare (United States)

text: MFS has been criticized for not paying doctors enough because of the low conversion factor. By adjustments to the MFS conversion factor, it is possible to make global adjustments in payments to all doctors.


title: Medicare (United States)

text: The SGR was the subject of possible reform legislation again in 2014. On March 14, 2014, the United States House of Representatives passed the SGR Repeal and Medicare Provider Payment Modernization Act of 2014 (H.R. 4015; 113th Congress), a bill that would have replaced the (SGR) formula with new systems for establishing those payment rates. However, the bill would pay for these changes by delaying the Affordable Care Act's individual mandate requirement, a proposal that was very unpopular with Democrats. The SGR was expected to cause Medicare reimbursement cuts of 24 percent on April 1, 2014, if a solution to reform or delay the SGR was not found. This led to another bill, the Protecting Access to Medicare Act of 2014 (H.R. 4302; 113th Congress), which would delay those cuts until March 2015. This bill was also controversial. The American Medical Association and other medical groups opposed it, asking Congress to provide a permanent solution instead of just another delay.


title: Medicare (United States)

text: There are two ways for providers to be reimbursed in Medicare. "Participating" providers accept "assignment", which means that they accept Medicare's approved rate for their services as payment (typically 80% from Medicare and 20% from the beneficiary). Some non-participating doctors do not take assignment, but they also treat Medicare enrollees and are authorized to balance bills no more than a small fixed amount above Medicare's approved rate. A minority of doctors are "private contractors" from a Medicare perspective, which means they opt out of Medicare and refuse to accept Medicare payments altogether. These doctors are required to inform patients that they will be liable for the full cost of their services out-of-pocket, often in advance of treatment.


title: Medicare (United States)

text: While the majority of providers accept Medicare assignments, (97 percent for some specialties), and most physicians still accept at least some new Medicare patients, that number is in decline. While 80% of physicians in the Texas Medical Association accepted new Medicare patients in 2000, only 60% were doing so by 2012. A study published in 2012 concluded that the Centers for Medicare and Medicaid Services (CMS) relies on the recommendations of an American Medical Association advisory panel. The study led by Dr. Miriam J. Laugesen, of Columbia Mailman School of Public Health, and colleagues at UCLA and the University of Illinois, shows that for services provided between 1994 and 2010, CMS agreed with 87.4% of the recommendations of the committee, known as RUC or the Relative Value Update Committee.


title: Medicare (United States)

text: Chemotherapy and other medications dispensed in a physician's office are reimbursed according to the Average Sales Price (ASP), a number computed by taking the total dollar sales of a drug as the numerator and the number of units sold nationwide as the denominator. The current reimbursement formula is known as "ASP+6" since it reimburses physicians at 106% of the ASP of drugs. Pharmaceutical company discounts and rebates are included in the calculation of ASP, and tend to reduce it. In addition, Medicare pays 80% of ASP+6, which is the equivalent of 84.8% of the actual average cost of the drug. Some patients have supplemental insurance or can afford the co-pay. Large numbers do not. This leaves the payment to physicians for most of the drugs in an "underwater" state. ASP+6 superseded Average Wholesale Price in 2005, after a 2003 front-page "New York Times" article drew attention to the inaccuracies of Average Wholesale Price calculations.


title: Medicare (United States)

text: This procedure is scheduled to change dramatically in 2017 under a CMS proposal that will likely be finalized in October 2016.


title: Medicare (United States)

text: "Physicians in geographic Health Professional Shortage Areas (HPSAs) and Physician Scarcity Areas (PSAs) can receive incentive payments from Medicare. Payments are made on a quarterly basis, rather than claim-by-claim, and are handled by each area's Medicare carrier."


title: Medicare (United States)

text: Generally, if an individual already receives Social Security payments, at age 65 the individual becomes automatically enrolled in Medicare Part A (Hospital Insurance) and Medicare Part B (Medical Insurance). If the individual chooses not to enroll in Part B (typically because the individual is still working and receiving employer insurance), then the individual must proactively opt out of it when receiving the automatic enrollment package. Delay in enrollment in Part B carries no penalty if the individual has other insurance (e.g., the employment situation noted above), but may be penalized under other circumstances. An individual who does not receive Social Security benefits upon turning 65 must sign up for Medicare if they want it. Penalties may apply if the individual chooses not to enroll at age 65 and does not have other insurance.


title: Medicare (United States)

text: If an individual is not eligible for premium-free Part A, and they do not buy a premium-based Part A when they are first eligible, the monthly premium may go up 10%. The individual must pay the higher premium for twice the number of years that they could have had Part A, but did not sign up. For example, if they were eligible for Part A for two years but did not sign up, they must pay the higher premium for four years. Usually, individuals do not have to pay a penalty if they meet certain conditions that allow them to sign up for Part A during a Special Enrollment Period.


title: Medicare (United States)

text: If an individual does not sign up for Part B when they are first eligible, they may have to pay a late enrollment penalty for as long as they have Medicare. Their monthly premium for Part B may go up 10% for each full 12-month period that they could have had Part B, but did not sign up for it. Usually, they do not pay a late enrollment penalty if they meet certain conditions that allow them to sign up for Part B during a special enrollment period.


title: Medicare (United States)

text: Medicare differs from private insurance available to working Americans in that it is a social insurance program. Social insurance programs provide statutorily guaranteed benefits to the entire population (under certain circumstances, such as old age or unemployment). These benefits are financed in significant part through universal taxes. In effect, Medicare is a mechanism by which the state takes a portion of its citizens' resources to provide health and financial security to its citizens in old age or in case of disability, helping them cope with the cost of health care. In its universality, Medicare differs substantially from private insurers, which decide whom to cover and what benefits to offer to manage their risk pools and ensure that their costs do not exceed premiums.


title: Medicare (United States)

text: Because the federal government is legally obligated to provide Medicare benefits to older and some disabled Americans, it cannot cut costs by restricting eligibility or benefits, except by going through a difficult legislative process, or by revising its interpretation of medical necessity. By statute, Medicare may only pay for items and services that are "reasonable and necessary for the diagnosis or treatment of illness or injury or to improve the functioning of a malformed body member", unless there is another statutory authorization for payment. Cutting costs by cutting benefits is difficult, but the program can also achieve substantial economies of scale in the prices it pays for health care and administrative expenses—and, as a result, private insurers' costs have grown almost 60% more than Medicare's since 1970. Medicare's cost growth is now the same as GDP growth and expected to stay well below private insurance's for the next decade.


title: Medicare (United States)

text: Because Medicare offers statutorily determined benefits, its coverage policies and payment rates are publicly known, and all enrollees are entitled to the same coverage. In the private insurance market, plans can be tailored to offer different benefits to different customers, enabling individuals to reduce coverage costs while assuming risks for care that is not covered. Insurers, however, have far fewer disclosure requirements than Medicare, and studies show that customers in the private sector can find it difficult to know what their policy covers, and at what cost. Moreover, since Medicare collects data about utilization and costs for its enrollees—data that private insurers treat as trade secrets—it gives researchers key information about health care system performance.


title: Medicare (United States)

text: Medicare also has an important role in driving changes in the entire health care system. Because Medicare pays for a huge share of health care in every region of the country, it has a great deal of power to set delivery and payment policies. For example, Medicare promoted the adaptation of prospective payments based on DRG's, which prevents unscrupulous providers from setting their own exorbitant prices. Meanwhile, the Patient Protection and Affordable Care Act has given Medicare the mandate to promote cost-containment throughout the health care system, for example, by promoting the creation of accountable care organizations or by replacing fee-for-service payments with bundled payments.


title: Medicare (United States)

text: Over the long-term, Medicare faces significant financial challenges because of rising overall health care costs, increasing enrollment as the population ages, and a decreasing ratio of workers to enrollees. Total Medicare spending is projected to increase from $523 billion in 2010 to around $900 billion by 2020. From 2010 to 2030, Medicare enrollment is projected to increase dramatically, from 47 million to 79 million, and the ratio of workers to enrollees is expected to decrease from 3.7 to 2.4. However, the ratio of workers to retirees has declined steadily for decades, and social insurance systems have remained sustainable due to rising worker productivity. There is some evidence that productivity gains will continue to offset demographic trends in the near future.


title: Medicare (United States)

text: The Congressional Budget Office (CBO) wrote in 2008 that "future growth in spending per beneficiary for Medicare and Medicaid—the federal government's major health care programs—will be the most important determinant of long-term trends in federal spending. Changing those programs in ways that reduce the growth of costs—which will be difficult, in part because of the complexity of health policy choices—is ultimately the nation's central long-term challenge in setting federal fiscal policy."


title: Medicare (United States)

text: Overall health care costs were projected in 2011 to increase by 5.8 percent annually from 2010 to 2020, in part because of increased utilization of medical services, higher prices for services, and new technologies. Health care costs are rising across the board, but the cost of insurance has risen dramatically for families and employers as well as the federal government. In fact, since 1970 the per-capita cost of private coverage has grown roughly one percentage point faster each year than the per-capita cost of Medicare. Since the late 1990s, Medicare has performed especially well relative to private insurers. Over the next decade, Medicare's per capita spending is projected to grow at a rate of 2.5 percent each year, compared to private insurance's 4.8 percent. Nonetheless, most experts and policymakers agree containing health care costs is essential to the nation's fiscal outlook. Much of the debate over the future of Medicare revolves around whether per capita costs should be reduced by limiting payments to providers or by shifting more costs to Medicare enrollees.


title: Medicare (United States)

text: Several measures serve as indicators of the long-term financial status of Medicare. These include total Medicare spending as a share of gross domestic product (GDP), the solvency of the Medicare HI trust fund, Medicare per-capita spending growth relative to inflation and per-capita GDP growth; general fund revenue as a share of total Medicare spending; and actuarial estimates of unfunded liability over the 75-year timeframe and the infinite horizon (netting expected premium/tax revenue against expected costs). The major issue in all these indicators is comparing any future projections against current law vs. what the actuaries expect to happen. For example, current law specifies that Part A payments to hospitals and skilled nursing facilities will be cut substantially after 2028 and that doctors will get no raises after 2025. The actuaries expect that the law will change to keep these events from happening.


title: Medicare (United States)

text: This measure, which examines Medicare spending in the context of the US economy as a whole, is projected to increase from 3.7 percent in 2017 to 6.2 percent by 2092 under current law and over 9 percent under what the actuaries really expect will happen (called an "illustrative example" in recent-year Trustees Reports).


title: Medicare (United States)

text: This measure involves only Part A. The trust fund is considered insolvent when available revenue plus any existing balances will not cover 100 percent of annual projected costs. According to the latest estimate by the Medicare trustees (2018), the trust fund is expected to become insolvent in 8 years (2026), at which time available revenue will cover around 85 percent of annual projected costs for Part A services. Since Medicare began, this solvency projection has ranged from two to 28 years, with an average of 11.3 years. This and other projections in Medicare Trustees reports are based on what its actuaries call intermediate scenario but the reports also include worst-case and best-case projections that are quite different (other scenarios presume Congress will change present law).


title: Medicare (United States)

text: Per capita spending relative to inflation per-capita GDP growth was to be an important factor used by the PPACA-specified Independent Payment Advisory Board (IPAB), as a measure to determine whether it must recommend to Congress proposals to reduce Medicare costs. However, the IPAB never formed and was formally repealed by the Balanced Budget Act of 2018.


title: Medicare (United States)

text: This measure, established under the Medicare Modernization Act (MMA), examines Medicare spending in the context of the federal budget. Each year, MMA requires the Medicare trustees to make a determination about whether general fund revenue is projected to exceed 45 percent of total program spending within a seven-year period. If the Medicare trustees make this determination in two consecutive years, a "funding warning" is issued. In response, the president must submit cost-saving legislation to Congress, which must consider this legislation on an expedited basis. This threshold was reached and a warning issued every year between 2006 and 2013 but it has not been reached since that time and is not expected to be reached in the 2016–2022 "window". This is a reflection of the reduced spending growth mandated by the ACA according to the Trustees.


title: Medicare (United States)

text: Medicare's unfunded obligation is the total amount of money that would have to be set aside today such that the principal and interest would cover the gap between projected revenues (mostly Part B premiums and Part A payroll taxes to be paid over the timeframe under current law) and spending over a given timeframe. By law the timeframe used is 75 years though the Medicare actuaries also give an infinite-horizon estimate because life expectancy consistently increases and other economic factors underlying the estimates change.


title: Medicare (United States)

text: As of January 1, 2016, Medicare's unfunded obligation over the 75-year time frame is $3.8 trillion for the Part A Trust Fund and $28.6 trillion for Part B. Over an infinite timeframe the combined unfunded liability for both programs combined is over $50 trillion, with the difference primarily in the Part B estimate. These estimates assume that CMS will pay full benefits as currently specified over those periods though that would be contrary to current United States law. In addition, as discussed throughout each annual Trustees' report, "the Medicare projections shown could be substantially understated as a result of other potentially unsustainable elements of current law." For example, current law effectively provides no raises for doctors after 2025; that is unlikely to happen. It is impossible for actuaries to estimate unfunded liability other than assuming current law is followed (except relative to benefits as noted), the Trustees state "that actual long-range present values for (Part A) expenditures and (Part B/D) expenditures and revenues could exceed the amounts estimated by a substantial margin."


title: Medicare (United States)

text: Popular opinion surveys show that the public views Medicare's problems as serious, but not as urgent as other concerns. In January 2006, the Pew Research Center found 62 percent of the public said addressing Medicare's financial problems should be a high priority for the government, but that still put it behind other priorities. Surveys suggest that there's no public consensus behind any specific strategy to keep the program solvent.


title: Medicare (United States)

text: The Government Accountability Office lists Medicare as a "high-risk" government program in need of reform, in part because of its vulnerability to fraud and partly because of its long-term financial problems. Fewer than 5% of Medicare claims are audited.


title: Medicare (United States)

text: Robert M. Ball, a former commissioner of Social Security under President Kennedy in 1961 (and later under Johnson, and Nixon) defined the major obstacle to financing health insurance for the elderly: the high cost of care for the aged combined with the generally low incomes of retired people. Because retired older people use much more medical care than younger employed people, an insurance premium related to the risk for older people needed to be high, but if the high premium had to be paid after retirement, when incomes are low, it was an almost impossible burden for the average person. The only feasible approach, he said, was to finance health insurance in the same way as cash benefits for retirement, by contributions paid while at work, when the payments are least burdensome, with the protection furnished in retirement without further payment. In the early 1960s relatively few of the elderly had health insurance, and what they had was usually inadequate. Insurers such as Blue Cross, which had originally applied the principle of community rating, faced competition from other commercial insurers that did not community rate, and so were forced to raise their rates for the elderly.


title: Medicare (United States)

text: Medicare is not generally an unearned entitlement. Entitlement is most commonly based on a record of contributions to the Medicare fund. As such it is a form of social insurance making it feasible for people to pay for insurance for sickness in old age when they are young and able to work and be assured of getting back benefits when they are older and no longer working. Some people will pay in more than they receive back and others will receive more benefits than they paid in. Unlike private insurance where some amount must be paid to attain coverage, all eligible persons can receive coverage regardless of how much or if they had ever paid in.


title: Medicare (United States)

text: Bruce Vladeck, director of the Health Care Financing Administration in the Clinton administration, has argued that lobbyists have changed the Medicare program "from one that provides a legal entitlement to beneficiaries to one that provides a de facto political entitlement to providers."


title: Medicare (United States)

text: A 2001 study by the Government Accountability Office evaluated the quality of responses given by Medicare contractor customer service representatives to provider (physician) questions. The evaluators assembled a list of questions, which they asked during a random sampling of calls to Medicare contractors. The rate of complete, accurate information provided by Medicare customer service representatives was 15%. Since then, steps have been taken to improve the quality of customer service given by Medicare contractors, specifically the 1-800-MEDICARE contractor. As a result, 1-800-MEDICARE customer service representatives (CSR) have seen an increase in training, quality assurance monitoring has significantly increased, and a customer satisfaction survey is offered to random callers.


title: Medicare (United States)

text: In most states the Joint Commission, a private, non-profit organization for accrediting hospitals, decides whether or not a hospital is able to participate in Medicare, as currently there are no competitor organizations recognized by CMS.


title: Medicare (United States)

text: Other organizations can also accredit hospitals for Medicare. These include the Community Health Accreditation Program, the Accreditation Commission for Health Care, the Compliance Team and the Healthcare Quality Association on Accreditation.


title: Medicare (United States)

text: Accreditation is voluntary and an organization may choose to be evaluated by their State Survey Agency or by CMS directly.


title: Medicare (United States)

text: Medicare funds the vast majority of residency training in the US. This tax-based financing covers resident salaries and benefits through payments called Direct Medical Education payments. Medicare also uses taxes for Indirect Medical Education, a subsidy paid to teaching hospitals in exchange for training resident physicians. For the 2008 fiscal year these payments were $2.7 billion and $5.7 billion, respectively. Overall funding levels have remained at the same level since 1996, so that the same number or fewer residents have been trained under this program. Meanwhile, the US population continues to grow both older and larger, which has led to greater demand for physicians, in part due to higher rates of illness and disease among the elderly compared to younger individuals. At the same time the cost of medical services continue rising rapidly and many geographic areas face physician shortages, both trends suggesting the supply of physicians remains too low.


title: Medicare (United States)

text: Medicare thus finds itself in the odd position of having assumed control of the single largest funding source for graduate medical education, currently facing major budget constraints, and as a result, freezing funding for graduate medical education, as well as for physician reimbursement rates. This has forced hospitals to look for alternative sources of funding for residency slots. This halt in funding in turn exacerbates the exact problem Medicare sought to solve in the first place: improving the availability of medical care. However, some healthcare administration experts believe that the shortage of physicians may be an opportunity for providers to reorganize their delivery systems to become less costly and more efficient. Physician assistants and Advanced Registered Nurse Practitioners may begin assuming more responsibilities that traditionally fell to doctors, but do not necessarily require the advanced training and skill of a physician.


title: Medicare (United States)

text: In 1977, the Health Care Financing Administration (HCFA) was established as a federal agency responsible for the administration of Medicare and Medicaid. This would be renamed to Centers for Medicare & Medicaid Services (CMS) in 2001. By 1983, the diagnosis-related group (DRG) replaced pay for service reimbursements to hospitals for Medicare patients.


title: Medicare (United States)

text: President Bill Clinton attempted an overhaul of Medicare through his health care reform plan in 1993–1994 but was unable to get the legislation passed by Congress.


title: Medicare (United States)

text: In 2003 Congress passed the Medicare Prescription Drug, Improvement, and Modernization Act, which President George W. Bush signed into law on December 8, 2003. Part of this legislation included filling gaps in prescription-drug coverage left by the Medicare Secondary Payer Act that was enacted in 1980. The 2003 bill strengthened the Workers' Compensation Medicare Set-Aside Program (WCMSA) that is monitored and administered by CMS.


title: Medicare (United States)

text: On August 1, 2007, the US House of Representatives voted to reduce payments to Medicare Advantage providers in order to pay for expanded coverage of children's health under the SCHIP program. As of 2008, Medicare Advantage plans cost, on average, 13 percent more per person insured for like beneficiaries than direct payment plans. Many health economists have concluded that payments to Medicare Advantage providers have been excessive. The Senate, after heavy lobbying from the insurance industry, declined to agree to the cuts in Medicare Advantage proposed by the House. President Bush subsequently vetoed the SCHIP extension.


title: Medicare (United States)

text: The Patient Protection and Affordable Care Act ("PPACA") of 2010 made a number of changes to the Medicare program. Several provisions of the law were designed to reduce the cost of Medicare. The most substantial provisions slowed the growth rate of payments to hospitals and skilled nursing facilities under Parts A of Medicare, through a variety of methods (e.g., arbitrary percentage cuts, penalties for readmissions).


title: Medicare (United States)

text: Congress also attempted to reduce payments to public Part C Medicare health plans by aligning the rules that establish Part C plans' capitated fees more closely with the FFS paid for comparable care to "similar beneficiaries" under Parts A and B of Medicare. Primarily these reductions involved much discretion on the part of CMS and examples of what CMS did included effectively ending a Part C program Congress had previously initiated to increase the use of Part C in rural areas (the so-called Part C PFFS plan) and reducing over time a program that encouraged employers and unions to create their own Part C plans not available to the general Medicare beneficiary base (so-called Part C EGWP plans) by providing higher reimbursement. These two types of Part C plans had been identified by MedPAC as the programs that most negatively affected parity between the cost of Medicare beneficiaries on Parts A/B/C and the costs of beneficiaries not on Parts A/B/C. These efforts to reach parity have been more than successful. As of 2015, all beneficiaries on A/B/C cost 4% less per person than all beneficiaries not on A/B/C. But whether that is because the cost of the former decreased or the cost of the latter increased is not known.


title: Medicare (United States)

text: PPACA also slightly reduced annual increases in payments to physicians and to hospitals that serve a disproportionate share of low-income patients. Along with other minor adjustments, these changes reduced Medicare's projected cost over the next decade by $455 billion.


title: Medicare (United States)

text: Additionally, the PPACA created the Independent Payment Advisory Board ("IPAB"), which was empowered to submit legislative proposals to reduce the cost of Medicare if the program's per-capita spending grows faster than per-capita GDP plus one percent. The IPAB was never formed and was formally repealed by the Balanced Budget Act of 2018.


title: Medicare (United States)

text: The PPACA also made some changes to Medicare enrollees' benefits. By 2020, it will "close" the so-called "donut hole" between Part D plans' initial spend phase coverage limits and the catastrophic cap on out-of-pocket spending, reducing a Part D enrollee's' exposure to the cost of prescription drugs by an average of $2,000 a year. That is, the template co-pay in the gap (which legally still exists) will be the same as the template co-pay in the initial spend phase, 25%. This lowered costs for about 5% of the people on Medicare. Limits were also placed on out-of-pocket costs for in-network care for public Part C health plan enrollees. Most of these plans had such a limit but ACA formalized the annual out of pocket spend limit. Beneficiaries on traditional Medicare do not get such a limit but can effectively arrange for one through private insurance.


title: Medicare (United States)

text: Meanwhile, Medicare Part B and D premiums were restructured in ways that reduced costs for most people while raising contributions from the wealthiest people with Medicare. The law also expanded coverage of or eliminated co-pays for some preventive services.


title: Medicare (United States)

text: The PPACA instituted a number of measures to control Medicare fraud and abuse, such as longer oversight periods, provider screenings, stronger standards for certain providers, the creation of databases to share data between federal and state agencies, and stiffer penalties for violators. The law also created mechanisms, such as the Center for Medicare and Medicaid Innovation to fund experiments to identify new payment and delivery models that could conceivably be expanded to reduce the cost of health care while improving quality.


title: Medicare (United States)

text: As legislators continue to seek new ways to control the cost of Medicare, a number of new proposals to reform Medicare have been introduced in recent years.


title: Medicare (United States)

text: Since the mid-1990s, there have been a number of proposals to change Medicare from a publicly run social insurance program with a defined benefit, for which there is no limit to the government's expenses, into a publicly run health plan program that offers "premium support" for enrollees. The basic concept behind the proposals is that the government would make a defined contribution, that is a premium support, to the health plan of a Medicare enrollee's choice. Sponsors would compete to provide Medicare benefits and this competition would set the level of fixed contribution. Additionally, enrollees would be able to purchase greater coverage by paying more in addition to the fixed government contribution. Conversely, enrollees could choose lower cost coverage and keep the difference between their coverage costs and the fixed government contribution. The goal of premium Medicare plans is for greater cost-effectiveness; if such a proposal worked as planned, the financial incentive would be greatest for Medicare plans that offer the best care at the lowest cost.


title: Medicare (United States)

text: This concept is basically how public Medicare Part C already works (but with a much more complicated competitive bidding process that drives up costs for the Trustees, but is very advantageous to the beneficiaries). Given that only about 1% of people on Medicare got premium support when Aaron and Reischauer first wrote their proposal in 1995 and the percentage is now 35%, on the way to 50% by 2040 according to the Trustees, perhaps no further reform is needed.


title: Medicare (United States)

text: There have been a number of criticisms of the premium support model. Some have raised concern about risk selection, where insurers find ways to avoid covering people expected to have high health care costs. Premium support proposals, such as the 2011 plan proposed by Senator Ron Wyden and Rep. Paul Ryan (R–Wis.), have aimed to avoid risk selection by including protection language mandating that plans participating in such coverage must provide insurance to all beneficiaries and are not able to avoid covering higher risk beneficiaries. Some critics are concerned that the Medicare population, which has particularly high rates of cognitive impairment and dementia, would have a hard time choosing between competing health plans. Robert Moffit, a senior fellow of The Heritage Foundation responded to this concern, stating that while there may be research indicating that individuals have difficulty making the correct choice of health care plan, there is no evidence to show that government officials can make better choices. Henry Aaron, one of the original proponents of premium supports, has recently argued that the idea should not be implemented, given that Medicare Advantage plans have not successfully contained costs more effectively than traditional Medicare and because the political climate is hostile to the kinds of regulations that would be needed to make the idea workable.


title: Medicare (United States)

text: Currently, public Part C Medicare health plans avoid this issue with an indexed risk formula that provides lower per capita payments to sponsors for relatively (remember all these people are over 65) healthy plan members and higher per capita payments for less healthy members.


title: Medicare (United States)

text: A number of different plans have been introduced that would raise the age of Medicare eligibility. Some have argued that, as the population ages and the ratio of workers to retirees increases, programs for the elderly need to be reduced. Since the age at which Americans can retire with full Social Security benefits is rising to 67, it is argued that the age of eligibility for Medicare should rise with it (though people can begin receiving reduced Social Security benefits as early as age 62).


title: Medicare (United States)

text: The CBO projected that raising the age of Medicare eligibility would save $113 billion over 10 years after accounting for the necessary expansion of Medicaid and state health insurance exchange subsidies under health care reform, which are needed to help those who could not afford insurance purchase it. The Kaiser Family Foundation found that raising the age of eligibility would save the federal government $5.7 billion a year, while raising costs for other payers. According to Kaiser, raising the age would cost $3.7 billion to 65- and 66-year-olds, $2.8 billion to other consumers whose premiums would rise as insurance pools absorbed more risk, $4.5 billion to employers offering insurance, and $0.7 billion to states expanding their Medicaid rolls. Ultimately Kaiser found that the plan would raise total social costs by more than twice the savings to the federal government.


title: Medicare (United States)

text: During the 2020 presidential campaign, Joe Biden proposed lowering the age of Medicare eligibility to 60 years old. A Kaiser Family Foundation study found that lowering the age to 60 could reduce costs for employer health plans by up to 15% if all eligible employees shifted to Medicare.


title: Medicare (United States)

text: Currently, people with Medicare can get prescription drug coverage through a public Medicare Part C plan or through the standalone Part D prescription drug plans (PDPs) program. Each plan sponsor establishes its own coverage policies and could if desired independently negotiate the prices it pays to drug manufacturers. But because each plan has a much smaller coverage pool than the entire Medicare program, many argue that this system of paying for prescription drugs undermines the government's bargaining power and artificially raises the cost of drug coverage. Conversely, negotiating for the sponsors is almost always done by one of three or four companies typically tied to pharmacy retailers each of whom alone has much more buying power than the entire Medicare program. That pharmacy-centric versus government-centric approach appears to have worked given that Part D has come in at 50% or more under original projected spending and has held average annual drug spending by seniors in absolute dollars fairly constant for over 10 years.


title: Medicare (United States)

text: Many look to the Veterans Health Administration as a model of lower cost prescription drug coverage. Since the VHA provides healthcare directly, it maintains its own formulary and negotiates prices with manufacturers. Studies show that the VHA pays dramatically less for drugs than the PDP plans Medicare Part D subsidizes. One analysis found that adopting a formulary similar to the VHA's would save Medicare $14 billion a year.


title: Medicare (United States)

text: There are other proposals for savings on prescription drugs that do not require such fundamental changes to Medicare Part D's payment and coverage policies. Manufacturers who supply drugs to Medicaid are required to offer a 15 percent rebate on the average manufacturer's price. Low-income elderly individuals who qualify for both Medicare and Medicaid receive drug coverage through Medicare Part D, and no reimbursement is paid for the drugs the government purchases for them. Reinstating that rebate would yield savings of $112 billion, according to a recent CBO estimate. Some have questioned the ability of the federal government to achieve greater savings than the largest PDPs, since some of the larger plans have coverage pools comparable to Medicare's, though the evidence from the VHA is promising. Some also worry that controlling the prices of prescription drugs would reduce incentives for manufacturers to invest in R&D, though the same could be said of anything that would reduce costs. However, the comparisons with the VHA point out that the VA only covers about half the drugs as Part D.


title: Medicare (United States)

text: Roughly nine million Americans—mostly older adults with low incomes—are eligible for both Medicare and Medicaid. These men and women tend to have particularly poor health—more than half are being treated for five or more chronic conditions—and high costs. Average annual per-capita spending for "dual-eligibles" is $20,000, compared to $10,900 for the Medicare population as a whole.


title: Medicare (United States)

text: The dual-eligible population comprises roughly 20 percent of Medicare's enrollees but accounts for 36 percent of its costs. There is substantial evidence that these individuals receive highly inefficient care because responsibility for their care is split between the Medicare and Medicaid programs—most see a number of different providers without any kind of mechanism to coordinate their care, and they face high rates of potentially preventable hospitalizations. Because Medicaid and Medicare cover different aspects of health care, both have a financial incentive to shunt patients into care the other program pays for.


title: Medicare (United States)

text: Many experts have suggested that establishing mechanisms to coordinate care for the dual-eligibles could yield substantial savings in the Medicare program, mostly by reducing hospitalizations. Such programs would connect patients with primary care, create an individualized health plan, assist enrollees in receiving social and human services as well as medical care, reconcile medications prescribed by different doctors to ensure they do not undermine one another, and oversee behavior to improve health. The general ethos of these proposals is to "treat the patient, not the condition," and maintain health while avoiding costly treatments.


title: Medicare (United States)

text: There is some controversy over who exactly should take responsibility for coordinating the care of the dual eligibles. There have been some proposals to transfer dual eligibles into existing Medicaid managed care plans, which are controlled by individual states. But many states facing severe budget shortfalls might have some incentive to stint on necessary care or otherwise shift costs to enrollees and their families to capture some Medicaid savings. Medicare has more experience managing the care of older adults, and is already expanding coordinated care programs under the ACA, though there are some questions about private Medicare plans' capacity to manage care and achieve meaningful cost savings.


title: Medicare (United States)

text: Estimated savings from more effective coordinated care for the dual eligibles range from $125 billion to over $200 billion, mostly by eliminating unnecessary, expensive hospital admissions.


title: Medicare (United States)

text: Both House Republicans and President Obama proposed increasing the additional premiums paid by the wealthiest people with Medicare, compounding several reforms in the ACA that would increase the number of wealthier individuals paying higher, income-related Part B and Part D premiums. Such proposals are projected to save $20 billion over the course of a decade, and would ultimately result in more than a quarter of Medicare enrollees paying between 35 and 90 percent of their Part B costs by 2035, rather than the typical 25 percent. If the brackets mandated for 2035 were implemented today, it would mean that anyone earning more than $47,000 (as an individual) or $94,000 (as a couple) would be affected. Under the Republican proposals, affected individuals would pay 40 percent of the total Part B and Part D premiums, which would be equivalent of $2,500 today.


title: Medicare (United States)

text: More limited income-relation of premiums only raises limited revenue. Currently, only 5 percent of Medicare enrollees pay an income-related premium, and most only pay 35 percent of their total premium, compared to the 25 percent most people pay. Only a negligible number of enrollees fall into the higher income brackets required to bear a more substantial share of their costs—roughly half a percent of individuals and less than three percent of married couples currently pay more than 35 percent of their total Part B costs.


title: Medicare (United States)

text: There is some concern that tying premiums to income would weaken Medicare politically over the long run, since people tend to be more supportive of universal social programs than of means-tested ones.


title: Medicare (United States)

text: Some Medicare supplemental insurance (or "Medigap") plans cover all of an enrollee's cost-sharing, insulating them from any out-of-pocket costs and guaranteeing financial security to individuals with significant health care needs. Many policymakers believe that such plans raise the cost of Medicare by creating a perverse incentive that leads patients to seek unnecessary, costly treatments. Many argue that unnecessary treatments are a major cause of rising costs and propose that people with Medicare should feel more of the cost of their care to create incentives to seek the most efficient alternatives. Various restrictions and surcharges on Medigap coverage have appeared in recent deficit reduction proposals. One of the furthest-reaching reforms proposed, which would prevent Medigap from covering any of the first $500 of coinsurance charges and limit it to covering 50 percent of all costs beyond that, could save $50 billion over 10 years. But it would also increase health care costs substantially for people with costly health care needs.


title: Medicare (United States)

text: There is some evidence that claims of Medigap's tendency to cause over-treatment may be exaggerated and that potential savings from restricting it might be smaller than expected. Meanwhile, there are some concerns about the potential effects on enrollees. Individuals who face high charges with every episode of care have been shown to delay or forgo needed care, jeopardizing their health and possibly increasing their health care costs down the line. Given their lack of medical training, most patients tend to have difficulty distinguishing between necessary and unnecessary treatments. The problem could be exaggerated among the Medicare population, which has low levels of health literacy.


title: Medicare (United States)

text: The Build Back Better legislation was passed in Congress in November 2021, and adds hearing services subject to Medicare Part B deductible and 20% coinsurance beginning in 2023. The initial proposal of this bill also aimed to address gaps in Medicare such as dental and vision coverage, however both services were removed following objections in the Senate. A study performed by Urban Institute showed that Medicare enrolees spend more on routine vision services ($8.4 billion) than routine hearing services ($5.7 billion), of which $5.4 billion and $4.7 billion were spent out of pocket respectively. In addition, nearly 1 in 3 Medicare beneficiaries used vision services annually, and averages a spending of $411 per person; as such, the impact of expanding Medicare to include vision services would benefit many people. Of note, there is an income gradient seen in those who utilize vision services and a severe unmet needs for these services in those with lower incomes. Enrolees below the federal poverty level spent $190, whereas those 400% above the level spent $465; and a likely trend that far fewer non-Hispanic Black and Hispanic beneficiaries use and spend on vision services— which is in keeping with the trend seen with hearing aids.


title: Absentia (TV series)

text: Absentia is an American thriller drama television series that premiered on September 25, 2017, on Amazon Prime Video in the United States and AXN internationally. Directed by Oded Ruskin, the series stars Stana Katic, Matthew Le Nevez and Patrick Heusinger. The series was renewed for a second season, premiering on March 26, 2019, on AXN, and premiered in the United States on June 14, 2019. The third season premiered on July 17, 2020 exclusively on Amazon Prime Video. In May 2021, the series was cancelled after three seasons.


title: Absentia (TV series)

text: The series tells the story of FBI special agent Emily Byrne who disappears without a trace while hunting one of Boston's most notorious serial killers, and she is declared dead in absentia. Six years later, she is found in a cabin in the woods, barely alive and with no memory of the years that she was missing. She returns home to learn that her husband has remarried and her son is being raised by the new wife, and she soon finds herself implicated in a new series of murders.


title: Absentia (TV series)

text: Production was completed in Bulgaria on the ten-episode series, with every episode directed by Oded Ruskin. The entire first season was shot together, as though it were one long movie.


title: Absentia (TV series)

text: The world premiere of "Absentia" was the opening selection at the 57th Monte Carlo Television Festival in June 2017. "Absentia" was a featured panel at Sony Pictures Television for the annual TV Market.


title: Absentia (TV series)

text: In Canada, "Absentia" was shown on Showcase in early 2018. In the United States, the series was picked up by Amazon and was released on Amazon Video on February 2, 2018. It was released on Amazon Video in the United Kingdom and Australia. The series was released in Sweden, Norway and Denmark on Viaplay December 5, 2017.


title: Absentia (TV series)

text: On review aggregator Rotten Tomatoes, the first season holds an approval rating of 47% based on 15 reviews, with an average rating of 5.78/10. The website's critical consensus reads, ""Absentia" sticks too closely to the procedural handbook, leaving its capable lead and mildly intriguing mystery treading water." On Metacritic, it has a weighted average score of 59 out of 100, based on the opinions of four critics, indicating "mixed or average reviews".


title: Smart Fortwo

text: The Smart Fortwo (stylized as "smart fortwo") is a rear-engine, rear-wheel-drive, 2-passenger city car manufactured and marketed by the Smart division of the German multinational Mercedes-Benz Group. Introduced in 1998, it is now in its third generation.


title: Smart Fortwo

text: The first generation was internally designated as the "W450", launched at the 1998 Paris Motor Show. The second generation "W451" build series was launched at the 2006 Bologna Motor Show. The third generation Fortwo (2014–) was internally designated as the "C453" build series, and debuted globally on July 16, 2014, at the Tempodrom in Berlin along with a closely related four-door version, the Smart Forfour, co-developed and sharing the same platform and engines with the third-generation Renault Twingo.


title: Smart Fortwo

text: The brand name "Smart" derives from its early history as a cooperative venture between Swatch and Mercedes: Swatch Mercedes ART. The "Fortwo" nameplate derives from its two-person seating capacity. Until 2004, the Fortwo had been marketed as the "smart City-Coupé."


title: Smart Fortwo

text: Development of what ultimately became the Smart Fortwo started before 1993, originally as "Swatch car" of Nicolas Hayek in co-operation with Volkswagen. With a design focused on a modern microcar with an electric or hybrid drive, VW vacillated, disputes with Hayek ensued, and Hayek turned to Mercedes.


title: Smart Fortwo

text: The company MCC (Micro Compact Car AG) was founded in 1994 by Hayek in Biel as a joint subsidiary of Daimler-Benz and SMH SA (Société Suisse de Microélectronique et d'Horlogerie).


title: Smart Fortwo

text: When MCC abandoned the original concept and the planned electric or hybrid drive, both Hayek and senior development team members left the project. "Today's gasoline-powered Smart is a product from Daimler-Benz and has not much in common with the plans of the former Swatch team."


title: Smart Fortwo

text: The Fortwo is noted for its – overall length, high H-point seating, offset passenger and driver seats (in the first and second generation, the passenger seat is 15 centimetres further rearward than the driver's), automated manual transmission (1st and 2nd generation), De Dion tube rear suspension, low CO emissions (119 grams per kilometre, North America, 1.0 Liter), two-part rear hatch, interchangeable plastic body panels and prominent steel hemispherical safety-cell, which is marketed as the "Tridion cell" and can be ordered in a contrasting color to the vehicle's body panels.


title: Smart Fortwo

text: Fortwo models are manufactured at Smartville—a dedicated Daimler assembly plant in Hambach, France—in Coupé (i.e., hatchback) and Cabrio (i.e., convertible) body styles, each in a mono-box configuration.


title: Smart Fortwo

text: With the second generation, Smart introduced a version with automatic start-stop, marketed as the MHD, or "Micro-Hybrid Drive"—offered only in certain markets. A sport model, marketed as the Brabus model, has been available in both generations, and Daimler introduced the Smart electric drive, an all-electric version, in 2007. The Fortwo forms the basis for Daimler's Car2go fleet, the largest car-sharing enterprise worldwide.


title: Smart Fortwo

text: In 2002, the New York Museum of Modern Art (MoMa) introduced a first generation Fortwo into its permanent collection (the only vehicle to be included into the collection while still in series production), and in 2014 the Fortwo was voted the "Best Microcar" for the fifth year in a row by readers of the Chinese edition of Auto, Motor und Sport. At the time of its commercial launch, the Smart Fortwo diesel-engined variant, the Cdi, had the lowest carbon dioxide emissions for an internal combustion engine, at 88 g/km rated NEDC cycle.


title: Smart Fortwo

text: Auto, Motor und Sport cites a drag coefficient (Cd) of 0.35 and Alles Auto cites a Cd of 0.345 for the second generation W451 series


title: Smart Fortwo

text: The first and second-generation Fortwo models employ an automated manual transmission, designed and manufactured by Getrag, where the clutch is computer-controlled via electrohydraulics, eliminating the need for a clutch pedal. The first generation used a six-speed version, and the second generation uses a five-speed version, model 5AMT130. Input from floor-mounted shifter or optional steering-wheel-mounted paddles controls a servo-operated clutch and an automated manual gearbox. The vehicle may be driven in automatic mode (early models had the option of fully automatic mode or standard "soft-tip" which was manual mode indicated by no button on the gearshift) or in semi-automatic (half-automatic) mode via paddle-shifters, where the operator controls the shift points but cannot feather or adjust the speed of the clutch.


title: Smart Fortwo

text: From 2009, revised transmission software enabled smoother and faster gear changes. The software, available via an ECU upgrade, was also made available for 2008 second generation cars, with a new battery as required.


title: Smart Fortwo

text: Third-generation models receive a five-speed manual transmission or dual-clutch automatic transmission.


title: Smart Fortwo

text: With an overall length (first generation: 2.5 m (98.4 in)) approximately equal to the width of regular parking space, a Smart Fortwo can park perpendicularly in spaces typically designed for parallel parking, allowing two Smarts to park in one space—a manner of parking not permissible in many jurisdictions worldwide (e.g. Austria, New Zealand and California).


title: Smart Fortwo

text: The engines are turbocharged with three cylinders. Originally the basic petrol engine was 599 cc, and came in three versions—45 hp (33 kW), 51 hp (38 kW) and 61 hp (45 kW). The engine displacement was increased to 698 cc with the facelift in 2002, in 37 kW (50 hp) and 45 kW (61 hp) variants. The turbo-diesel engine had 799 cc displacement giving 30 kW (41 hp).


title: Smart Fortwo

text: The Fortwo is available as a coupe or cabriolet, originally called the "city-coupe" & "City Cabrio", now the "Fortwo" & "Fortwo Cabrio", introduced in 2000 and restyled in 2002. Trim levels include the Pure, Pulse, and Passion. Pure models are fitted with the standard audio system but nothing else; Pulse models are fitted with alloy wheels, panoramic glass roof, and paddle-shifters on the steering wheel (2004+); and finally, the Passion models are fitted with air-conditioning and ability to select between fully automatic and sequential gearbox.


title: Smart Fortwo

text: Between 2006 and 2007 Brabus produced and sold 50 Smart Fortwo Edition Red cars for the UK market. All of these vehicles were originally produced with a black Tridion safety cell and black plastic panels, the car was then later repainted at Brabus in (EB6 colour code) Intense Red. The car was built with the usual Brabus additions to the exterior, these being Brabus front grill (with fog lights), Brabus front splitter, Brabus side skirts, black plastic Brabus rear exhaust panel and 16 inch Brabus Monoblock alloy wheels. These vehicles were always rumoured to be Brabus Nightrun Fortwo's that were later reworked.


title: Smart Fortwo

text: The interior was bespoke to this limited run of vehicles. The interior is half leather and half alcantara with red stitching. The seats use the smaller, non sport foams. This is unusual as all other Brabus 450 Fortwo's use the wider sports style seat foams. The door card inserts are alcantara with leather door pockets with the dash board finished in alcantara with an aluminium Brabus plaque displayed in the centre. None of these vehicles had heated seats or electric wing mirrors. All Brabus Edition Red Fortwo's are equipped with a 3-spoke steering wheel, bespoke floor mats, air conditioning, CD player, Brabus clock and rev counter, Brabus speedo displaying 120 mph and all of the removable interior plastics (including door handles and steering wheel trim) repainted in Intense Red to match the exterior.


title: Smart Fortwo

text: Designed on the base of the Fortwo Brabus, this limited edition example is powered by a 55 kW 3-cylinder turbo charged engine although all of the upgraded hardware is from the 60 kW motor with a different tune. Brabus upgrades over a standard 698cc Smart Fortwo include a 60 kW camshaft, 60 kW yellow Bosch injectors, 60 kW turbo charger, 60 kW turbo to intercooler pipe (TIK), Brabus branded central twin outlet exhaust with chrome tips, aluminium Brabus intake manifold name plaque and the gearbox from a Smart Roadster (different gear ratios compared with a standard Smart Fortwo).


title: Smart Fortwo

text: The second generation, build series W451 (internally: C451, Coupé – A451, Cabrio), was introduced on November 1, 2006—its length increased by 200 mm to and offering improved crash performance. The second generation retained the interchangeable plastic body panels as well as the prominent exposed, rigid steel safety cell, which is 50% high-strength steel, hot-dip galvanized and powder-coated—and marketed as "Tridion".


title: Smart Fortwo

text: The range received a minor interior facelift for model year 2011 with standard knee airbags, new instrument cluster, more extensive cloth trimming for the top of the instrument panel, circular rather than rectangular outboard dash vents, optional multimedia system with a 6.5" display, and optional surround-sound audio system. For model year 2013 all Fortwos received a minor exterior facelift with revised lower facias, front and rear, and a relocated brand emblem located inside rather than above the front grille.


title: Smart Fortwo

text: The 999 cc I3 Mitsubishi 3B2 engine (2007 onwards) is offered in normally aspirated and turbo versions. German tuner company Brabus, in a joint venture with Smart, has developed a high powered version of the 1.0-litre turbo, producing , originally available only in Europe, but now available elsewhere. A small 0.8-litre three-cylinder turbo diesel common rail engine made by Mercedes was available in most European markets.