Medicare/Medicaid

January 17, 2020

Doctor taking medical insurance card from patient in office during scheduled checkup. Photo by Envato Elements

Definition & Purpose

Medicare is a program funded by the state and federal government that provides health coverage for people 65 years or older and those who have a disability, regardless of income.

Medicaid is a state and federal program that provides health coverage for people with a very low income. Eligibility for children is at least 133 percent of the federal poverty level (FPL) in every state and states are given the option to extend eligibility to adults with income at or below 133 percent of the FPL.

Dually eligible people qualify for both Medicare and Medicaid. States also have the option of receiving federal funding for Medicaid for providing health care services to low income children, their caretaker relatives, the blind and individuals with disabilities. Healthcare is cruicial for the ones suffering from crohn’s diease.

(medicareinteractive.org)

A Brief History

In 1965, Medicare and Medicaid were enacted as Title XVIII and Title XIX of the Social Security Act. These programs provide hospital, post-hospital care and home health coverage. Medicaid was enacted because at the time, seniors were the population group most likely to be living in poverty because only about half had health insurance coverage.

(cms.org)

For the expansion of health care coverage

Millions of aging adults have been able to receive coverage when they otherwise wouldn’t be able to afford it. Prior to 1965, when Medicare was created, around 9 million older adults didn’t have health coverage. That number is significantly higher than the 508,000 seniors who were uninsured in 2018. Between 2010 and 2018, the uninsured rate dropped from 16 percent (48.6 million people) to 8.8 percent (28.3 million people).
The out-of-pocket premium is estimated to cost around $135.50 per month ⁠— very cheap compared to the out-of-pocket cost of operations, prescriptions and other associated costs.
With the creation of Medicare and Medicaid, Congress created a set of standards for hospital enrollment in the programs. As time went on, the government became more involved in overseeing these standards and now requires public reporting on things such as hospital infection rates and readmissions.

Against the expansion of health care coverage

In 2018, Medicare spending totaled $731 billion. Currently, that’s approximately approximately 15 percent of the overall federal budget. That number isn’t expected to get smaller, with many estimating that the percentage will go up to around 18 percent over the next decade. (healthcaremarkets)
Many of those on Medicare suffer from preventable conditions and are hospitalized for those. This places an increased burden on hospitals, which can then drive up the prices across the board for all patients.
With the current Medicare tax rate set at 2.9 percent (split between employers and employees) — and an additional 0.9 percent for those making more than $200,000 — this represents a significant amount of money coming out of each paycheck.
Largely because of the inexorable aging of the Baby Boomers, program costs continue to grow. The main risks: scheduled limits on payments to doctors and other providers may never be implemented and unknown future medical technologies are likely to increase all health costs, including for Medicare. Without change, it will be insolvent by 2026.

(healthmarkets.com)(healthaffairs.org)(vittana.org)(forbes.com)

Recent Developments

On Oct. 1, 2013, for the first time, all Americans were able to shop online for health coverage and couldn’t be denied because of pre-existing conditions when the Health Insurance Marketplace opened.

In 2015, the Medicare Access and Children’s Health Insurance Program (CHIP) Reauthorization Act changed the way Medicare pays physicians by replacing the Sustainable Growth Rate methodology with a method that’s more predictable and speeds up participation in alternative payment models. (cms.org)

Public Opinion

Beneficiaries of Medicare and Medicaid are in favor of the programs because it costs very little. However, it costs taxpayers more money because 36% of Medicare funding comes from taxes. Generally, Democrats are more in favor of systems close to or approaching universal health care while Republicans dislike the strain they put on taxpayers. (healthmarkets.com)

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