on medicare and medicaid

I thought this week I'd return to going over some of the basics of American healthcare, the definitions of the things that are in the news week after week. Since Marilyn Tavenner, the head of Medicare who also helped roll-out the health care reforms in 2013, just announced that she will be stepping down in February, it seemed a good of time as any to talk about what these two programs are and how they differ.

**Please note this is only a condensed description of each program and there are many more complexities than listed below. So, as always, I suggest further research to supplement my introduction.**

Medicare

Founded in 1965 by President Lyndon B. Johnson under the Social Security Act Amendments, Medicare provides health insurance to American citizens 65 and older as well as people with disabilities or end stage renal disease. Interesting to note on the day before MLK day, this Act also promoted racial integration by denying payment to hospitals and physicians that didn't comply with desegregation. As a result, over 1,000 hospitals integrated both their staff and patients within four months¹.

It's also important to note Medicare doesn't take into account income and pre-existing conditions--healthcare speak for previous chronic illnesses or other medical conditions that a patient had prior to obtaining the insurance--when setting rates and generally covers around half of the medical costs of those enrolled.

Medicare is broken down into 4 parts called A, B, C, and D:

A: Covers hospital costs (room, food, tests) up to ~90 days and hospice for those who have been diagnosed with less than 6 months left to live

B: An optional service that provides some assistance with outpatient services not covered by Part A. This could be things like canes, walkers, dialysis, x-rays, just to name a few. Plan B is optional for those who are currently covered by their employer who whose spouse still is.

C: Added in 1997, Part C is all about the Medicare Advantage plans. Through this system, beneficiaries, or those enrolled in Medicare, partake in a plan similar to non-Medicare HMOs and PPOs (if you need a reminder about what those are, click here). Enrollees receive the benefits of Part A and B, but agree to a limited network of physicians near their permanent residence and generally pay a premium (refresher on this can be found here as well).

D: In 2006, Part D was added which covers prescription drugs for Medicare Part A & B enrollees. Part D operated by private companies and, like Part C, is an opt-in service. What one's specific Part D plan covers is variable, and can be limited geographically, by drug type, etc.

Taken from: http://kff.org/medicare/fact-sheet/medicare-spending-and-financing-fact-sheet/

It's important to note that Medicare does not cover 100% of the costs for beneficiaries but it does provide assistance for senior citizens that have paid into the system during their working life to help manage hefty end-of-life costs. This has become increasingly controversial as the baby boomer generation turns 65, leaving our smaller, younger population to cover the costs of the system. But this will be a topic for another post.

tl;dr-the federal health insurance program the United States provides for citizens 65+ as well as disabled younger Americans or those with end stage renal disease.

Medicaid

Along with Medicare, Medicaid was also introduced through the Social Security Amendments of 1965 with the intention of helping states provide health insurance assistance to low income individuals and families so they can afford primary medical needs. Though states still have individual policies regarding what qualifies for Medicaid, and some do not provide any at all, they must still abide by federal Medicaid laws regarding eligibility, distribution, and service coverage. Thus, Medicaid, unlike Medicare, is not entirely federally funded.

Because Medicaid varies sometimes greatly between states, it's hard to give a very in-depth overview of what it provides. However, general it covers low income residents of all ages, as well as those who are disabled without previous work experience.

Taken from: http://www.cbpp.org/cms/index.cfm?fa=view&id=2223

Most Medicare programs operate through managed care programs in which Medicaid qualifiers are put into private insurance plans that cover most or all of their healthcare costs. The premiums of these plans are then paid for by the state. Thus, unlike Medicare, Medicaid is a social welfare program rather than a social insurance program and, accordingly, offers a lot more services.

tl;dr-the federal health insurance program for low-income Americans

To put Medicare and Medicaid spending into some perspective of general American health care spending:

A graph of federal spending on Medicare & Medicaid versus general healthcare expenditures, taken from a 2012 report from the Center of Medicaid and Medicare Services (CMS) that can be viewed here: http://budget.house.gov/uploadedfiles/fostertestimony_2-28-22012.pdf.

And also general federal spending:

Taken from: http://kff.org/medicare/fact-sheet/medicare-spending-and-financing-fact-sheet/

Hopefully, this gives you a better idea about the similarities and differences of the two programs. I'll be back next week to discuss some of the controversies of these programs. Until then, enjoy the three-day weekend most of us have and don't forget to remember why we don't have class/work on the third Monday of every year.

Have a healthcare question you want answered? A topic you want addressed? Email whatthehealthnow@gmail.com!

1. Vladeck, B. C., Van de Water, P. N., Eichner, J., & National Academy of Social Insurance (U.S.). (2005). Strengthening Medicare’s role in reducing racial and ethnic health disparities. Washington, D.C.: National Academy of Social Insurance. Read in its entirety at: http://www.nasi.org/sites/default/files/research/Strenthening%20Medicare's%20Role%20In%20Reducing.pdf