What are the Strengths, Challenges, and Issues of Medicare and Medicaid?

By: Sam Olewnik and Kelly Cucolo

What is Medicaid

-established in the U.S. in the 1965-joint federal and state program -government funded-state government managed

Medicaid Beneficiaries -individuals from low-income and limited-resource households

-pregnant women who lack general medical insurance-individuals who receive Supplemental Security Income-individuals with disabilities-children-individuals under age 65 that meet the national Medicaid minimum eligibility level of 133% of the federal poverty level

Medicaid Programs are required to cover:• Inpatient and outpatient hospital services• Physician services• Nursing home care in approved facilities• Home care services• Lab services• Rural health clinic services• Transportation to and from treatment

Strengths of Medicaid• On the operational and fiscal side, Medicaid costs less than private insurance.• Offers participants a comprehensive benefit package where they can choose their providers• individuals don't have to pay out-of-pocket fees for a variety of services• medicaid is adaptable

o ability to add new layers of eligibility and benefit categories has produced creative eligibility expansions for pregnant women, children, low income elderly and disabled people, and some employed people

o waiver programs were developed allowing major State reforms, expanded benefits in home and community-based settings and managed care, and eligibility to people not associated with public assistance.

• Medicaid pays for long term care services in a nursing facility.

• In some states, it also provides minimal coverage for at-home care.

Issues of Medicaid• fundamental reform may be long overdue

o Gaps in coverageU.S. Supreme Court ruled Medicaid expansion is voluntary within states.

- adults in those states that do not expand with incomes below 100% of the federal poverty level fall into a gap.

• Their incomes are too high to get Medicaid under their state’s current rules. But their incomes are too low to qualify for help buying coverage in the Marketplace.

o If Medicaid is the assigned health care coverage of even more working uninsured people in the U.S., who may never have any asso ciation with public assistance programs, the program will need to move beyond its public assistance roots.

• You must meet the eligibility standards of your state to obtain home health care and nursing facility care.• choice about the type and location of care is very limited

o You must receive care from a Medicaid-certified provider. Many nursing facilities, assisted living facilities, and home health providers don’t accept Medicaid

payment.

Challenges of Medicaid• Funding

o federal government funding can disappear at any point, for any reason• Source of Care

o many physicians do not accept new medicaid patients due to: low reimbursement rates late reimbursements increased attention and time required for patients

• restricted level of flexibility given to the states o reduced state ability to adjust their programs during societal and

economic changes

Questions...Should Medicaid coverage be expanded to cover a wider range of people? Why/Why not?

Should states receive more flexibility to control the expansion rate? If yes, how could this be implemented?

Should physicians be allowed to turn away Medicaid patients?

What is Medicare

• signed into law in 1965• part of the Social Security Act• benefits those age 65 or older who are

also eligible for S.S. OR on S.S. disability OR have End-Stage Renal Disease

• 4 sections (A, B, C, and D)- each covers different health services

Strengths of MedicarePart A:

• covers hospital care, home health care, Hospice, and some nursing home care

• funded by payroll tax (1.45%)• free for those who pay Medicare taxes (working)

Part B:• covers out-patient costs (doctors, labs, x-rays, etc.• premiums pay for ⅓ while gov’t covers ⅔

Part C:• usually a combo of parts A, B, and D through private

insurers; offers alternatives to “traditional” medicine (instructed by Centers for Medicare & Medicaid Services)

• funded by premiums and gov’t subsidies

Part D:

• drug benefits

• funded by premiums and private plans

Challenges of Medicare- parts A, B, and D are “fee for service” care, while Part C is Medicare managed care

- out-of-pocket expenses:● Part A: $1200 deductible; nursing home only 1st 100 days● Part B: premium, deductible ($100), and 20% coinsurance● Part C: private companies offer alternatives to traditional

medicine (combines parts A and B privately)● Part D: “doughnut hole” (75% for 1st year up to $2750, then

client pays for 100% until reaches $4350, then plan covers 95%); must purchase from private insurers (prices not regulated)

Issues of Medicare• must be age 65 AND eligible for Social Security or be on S.S. disability

o some people may be 65 and not eligible for S.S. (not enough credits) while others may need aid paying for care but only 64, etc.)

● Medicare only pays for 14% of the total costs of long-term care (Can include help needed for chronic diseases and disabilities, formal (nursing home/assisted living) and informal (home) care, therapists, CNAs, etc.

○ supposed to be helping group who needs it the most■ this means 75% of LTC is provided informally, (family members,

neighbors, etc.) = not professional care

● Medicaid pays for 40% of LTC, people spend down to qualify for this help

Would the Medicare system be better if CMS set the standards ($) for every

section, not just Part C?

Do you think Medicare should cover a higher percentage of long-term care?

If yes, how would you prefer the extra money be raised?

(Increase payroll taxes, for example)

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