By covering millions more, the Affordable Care Act contributed to changes seen in five decades of Medicare and Medicaid. Innovation has been critical to the advancement of health care in the nation, and government-sponsored health insurance largely paved the way for advancements.
Full Answer
What are the pros and cons of Medicare and Medicaid?
· One of the major concerns in Medicare and Medicaid programs is the lack of standardized assessments to address the needs of a beneficiary. The researcher mentioned that the Medicare world looks at the diseases with a set of coding however, the program has no measurement for the function.
What problems are associated with Medicare and Medicaid?
In light of skyrocketing costs in Medicare and Medicaid, as well as concerns over fraud and abuse, Congress decided by the early 1970s that closer oversight of the medical care system was necessary. The concern was that excess budgetary costs were related to overuse of medical services, driven by uncontrolled financial incentive systems built into the original legislation.
What impact does Medicare have on health insurance?
Roghman KJ, Haggerty RJ, Lorenz R. Anticipated and actual effects of Medicaid on the medical-care pattern of children. N Engl J Med. 1971 Nov 4; 285 (19):1053–1057. [Google Scholar] Wallace HM, Goldstein H, Oglesby AC. The health and medical care of children under Title 19 (Medicaid). Am J Public Health. 1974 May; 64 (5):501–506.
What are the differences between Medicare and Medicaid?
· Medicaid, the nation’s main public health insurance program for low-income people, now covers over 65 million Americans – more than …
What factors affect Medicare?
To Improve Medicare, Take Social Risk Factors into Account, Experts Say. New reports recommend Medicare consider patients' education level, income, marital status and other health-affecting circumstances when paying or grading health care providers.
What factors affect Medicaid?
Medicaid spending is driven by multiple factors, including the number and mix of enrollees, medical cost inflation, utilization, and state policy choices about benefits, provider payment rates, and other program factors.
What drove the development of Medicare?
The Medicare program was signed into law in 1965 to provide health coverage and increased financial security for older Americans who were not well served in an insurance market characterized by employment-linked group coverage.
How did Medicare and Medicaid get started?
On July 30, 1965, President Lyndon B. Johnson signed into law legislation that established the Medicare and Medicaid programs. For 50 years, these programs have been protecting the health and well-being of millions of American families, saving lives, and improving the economic security of our nation.
What is the difference between Medicare and Medicaid?
Medicare is a federal program that provides health coverage if you are 65+ or under 65 and have a disability, no matter your income. Medicaid is a state and federal program that provides health coverage if you have a very low income.
How is Medicaid and Medicare funded?
Funding for Medicare is done through payroll taxes and premiums paid by recipients. Medicaid is funded by the federal government and each state. Both programs received additional funding as part of the fiscal relief package in response to the 2020 economic crisis.
How has the Medicare system evolved since its inception?
Medicare has expanded several times since it was first signed into law in 1965. Today Medicare offers prescription drug plans and private Medicare Advantage plans to suit your needs and budget. Medicare costs rose for the 2021 plan year, but some additional coverage was also added.
When did Medicare go into effect?
July 30, 1965On July 30, 1965, President Lyndon Johnson traveled to the Truman Library in Independence, Missouri, to sign Medicare into law.
Who created Medicare Advantage?
President Bill Clinton signed Medicare+Choice into law in 1997. The name changed to Medicare Advantage in 2003. Advantage plans automatically cover essential Part A and Part B benefits, except hospice services.
What federal law created Medicare and Medicaid?
the Social Security Amendments of 1965On July 30, 1965, President Lyndon B. Johnson signed the Medicare and Medicaid Act, also known as the Social Security Amendments of 1965, into law. It established Medicare, a health insurance program for the elderly, and Medicaid, a health insurance program for people with limited income.
Who is responsible for Medicare?
The federal agency that oversees CMS, which administers programs for protecting the health of all Americans, including Medicare, the Marketplace, Medicaid, and the Children's Health Insurance Program (CHIP).
Who brought in Medicare?
the Whitlam governmentThe first iteration of Medicare was called Medibank, and it was introduced by the Whitlam government in 1975, early in its second term. The federal opposition under Malcolm Fraser had rejected Bills relating to its financing, which is why it took the government so long to get it established.
How did Medicare and Medicaid influence clinical medicine?
Medicare and Medicaid emerged from a fierce political process in 1965 with the charge to stay away from clinical medicine. Early on, however, Federal administrators recognized that Medicare and Medicaid could not control costs or ensure quality without regulation. As regulation developed, it took several years for the Federal Government to adopt the strategy of prospective quality improvement through partnership with the medical community. This strategy has much promise for improving medical care.
What was the original intent of Medicare and Medicaid?
Despite the original intent, Medicare and Medicaid have had tremendous influence on medical practice. In this article, we focus on four policy areas that illustrate the influence of CMS (and its predecessor agencies) on medical practice. We discuss the implications of the relationship between CMS and clinical medicine and how this relationship has changed over time. We conclude with thoughts about potential future efforts at CMS.
How can CMS help in clinical medicine?
First, CMS must successfully implement the Medicare Modernization Act (MMA). Second, CMS should devote more resources toward understanding the appropriate role for the Medicaid Program and how the Nation finances care for the most vulnerable segments of society. The States have conducted many experiments with payment and disease management, and CMS should facilitate sharing the lessons learned. Third, CMS should improve and develop close collaboration with other private insurers to enable the pooling of data and cooperative improvement of care. And fourth, CMS can lead by changing the paradigm of financing medical care based on acute care to one that pays for chronic illness care.
How does CMS improve quality of care?
We anticipate that CMS will continue its role to improve health care quality by informing clinical care with data, taking a larger role in chronic disease management, and developing new systems that reward high quality care. Data technology will now allow analysis of close to real-time data and linkage of inpatient, outpatient, and pharmacy databases to facilitate more rapid cycles in quality improvement. CMS' most recent initiative for the QIOs will actively help physician practices to adopt electronic health records (Medicare News, 2005). In addition to the inpatient efforts noted, CMS also participates with the Ambulatory Care Quality Alliance, along with other insurers and major physician organizations, to advance quality in outpatient care settings. And CMS has embarked on large-scale demonstration projects to determine whether pay-for-performance and disease management programs can save money and improve quality. All these programs reflect the growing partnerships between CMS and hospitals and physician organizations. It has taken almost 40 years to develop these types of relationships across American health care, but such partnerships now have the potential to yield substantial benefits in the health care system.
When did Medicare start paying for teaching hospitals?
Before the 1980s, Medicare allowed teaching hospitals to be reimbursed for their reasonable costs, including the cost of GME. In the early 1980s, along with the PPS, Medicare began making direct and indirect medical education payments to teaching hospitals. Direct medical education (DME) payments are intended to offset the actual cost of employing a resident. The indirect medical education (IME) payments offset the higher cost of care at teaching hospitals because of the higher technology, increased testing, and increased severity of illness. Contemporaneous with these payments, residency programs grew. DME funding totaled $2.6 billion in fiscal year 2002, intended to support the salaries and other direct costs of residents, and IME payments totaled $6.2 billion in support (Dickinson, 2004). The policy rationale for the indirect payments has been hotly debated, and many believe it should include compensation to hospitals for the greater severity of unmeasured case-mix associated with hospitals with teaching programs.
Does Medicare cover GME?
Congress assigned Medicare a role in financing graduate medical education (GME), (Social Security Amendments of 1965) (Public Law 89-97) under the assumption that GME is a public good and should be supported by the Federal Government. As such, CMS helps to shape the quality and size of the workforce of future physicians. Additionally, CMS policy changes have substantial effects on the financial health of America's teaching hospitals.
What was the role of CMS in the 1980s?
By the early 1980s, continued frustration with rising program costs led to the development of new payment and monitoring systems that expanded CMS' regulatory authority and influence. A key response to escalating costs was to change regulatory tools, both in terms of payment and clinical oversight. This change was spurred by congressional action in slowing Medicare spending in the context of rising budget deficits. The prospective payment system (PPS), enacted by Congress in 1983, sought to control hospitalization costs by paying hospitals a fixed rate based on the patient's diagnosis during admission (payment was based on diagnosis-related groups) (Social Security Amendments of 1983) (Public Law 98-21). Prior to prospective payment, hospitals and physicians did not have strong financial incentives to provide efficient care. By implementing this strategy, CMS attempted to relate clinical compensation to the resources needed for patient care. The PPS provided a strong incentive for hospitals to provide fewer services during an admission and shorten the length of stay. The role of CMS as regulatory agency became even more important: it had to monitor for both overuse and underuse of appropriate medical care. With the evolving role of these entities, the PSROs were remodeled into the peer review organizations (PROs) (Bhatia et al., 2000).
When did Medicare expand?
Over the years, Congress has made changes to Medicare: More people have become eligible. For example, in 1972 , Medicare was expanded to cover the disabled, people with end-stage renal disease (ESRD) requiring dialysis or kidney transplant, and people 65 or older that select Medicare coverage.
How long has Medicare and Medicaid been around?
Medicare & Medicaid: keeping us healthy for 50 years. On July 30, 1965, President Lyndon B. Johnson signed into law legislation that established the Medicare and Medicaid programs. For 50 years, these programs have been protecting the health and well-being of millions of American families, saving lives, and improving the economic security ...
What is the Affordable Care Act?
The 2010 Affordable Care Act (ACA) brought the Health Insurance Marketplace, a single place where consumers can apply for and enroll in private health insurance plans. It also made new ways for us to design and test how to pay for and deliver health care.
When was the Children's Health Insurance Program created?
The Children’s Health Insurance Program (CHIP) was created in 1997 to give health insurance and preventive care to nearly 11 million, or 1 in 7, uninsured American children. Many of these children came from uninsured working families that earned too much to be eligible for Medicaid.
Does Medicaid cover cash assistance?
At first, Medicaid gave medical insurance to people getting cash assistance. Today, a much larger group is covered: States can tailor their Medicaid programs to best serve the people in their state, so there’s a wide variation in the services offered.
Can states tailor Medicaid?
States can tailor their Medicaid programs to best serve the people in their state, so there’s a wide variation in the services offered .
Why is Medicare and Medicaid important?
Medicare and Medicaid helped end segregation in health care facilities.
When did Medicare and Medicaid become law?
To mark the 50 th anniversary of Medicare and Medicaid, signed into law by President Lyndon Johnson on July 30, 1965, we have identified four ways these programs have shaped the health care industry. There is no stopping the health care juggernaut.
Why were health care facilities not racially segregated?
The programs required that health care facilities could not be racially segregated if they wanted to receive Medicare and Medicaid payments, which meant facilities had to start accepting African-American patients.
How much did the federal government spend on Medicare in 2014?
By 2013, there were 15. The federal government is now the largest purchaser of health care in the United States. In its Primer on Medicare, The Kaiser Family Foundation estimates that 14% of the $3.5 trillion spent by the federal government in 2014 was spent on Medicare (approximately $505 billion total), making it the largest purchaser ...
Is Medicare driving innovation?
Medicare and Medicaid is driving innovation, but have they run out of gas? US News & World Report estimates that today, one in three Americans is covered by Medicare or Medicaid, and it is that extension of coverage to a larger population that is driving innovation. In the article, “ America’s Health Care Elixir ,” Kimberly Leonard states, “Because the government covered more people, and eventually extended that coverage to include drugs and medical devices, industries knew they could invest in research because they would eventually recoup the costs of their work through sales of new products.” However, innovation is beginning to outstrip the programs’ ability to keep pace. For example, Leonard states, “Pharmaceuticals also are moving toward developing more expensive biologic drugs, which could be a challenge for Medicare and Medicaid to afford.” More important, the programs’ outdated structure, developed during a different business environment, serving a different population, is making it difficult for them to keep pace with technology.
How many people are covered by medicaid?
Medicaid, the nation’s main public health insurance program for low-income people, now covers over 65 million Americans – more than 1 in every 5 – at least some time during the year.
Why is health insurance important?
Health insurance coverage is associated with better health outcomes for adults. It is also associated with having a regular source of care and with greater and more appropriate use of health services. These factors, in turn, improve the likelihood of disease screening and early detection, the management of chronic illness, and effective treatment of acute conditions such as traumatic brain injury and heart attacks. The ultimate result is improved health outcomes.
Is Medicaid worse than no coverage?
Controversy about the Medicaid expansion has been stoked by an assertion that first appeared in a Wall Street Journal editorial a couple of years ago and has since resurfaced periodically, that “Medicaid is worse than no coverage at all.” 1 2 3 4 5 6 This claim about Medicaid is sharply at odds with the authoritative findings of the Institute of Medicine (IOM) Committee on Consequences of Uninsurance, detailed in Care Without Coverage: Too Little, Too Late, the second of six reports the IOM issued on the subject in the early 2000’s. 7 Based on a comprehensive review of the research examining the impact of health insurance on adults, the IOM charted the causal pathway from coverage to better health outcomes, concluding:
Is Medicaid expansion a state option?
However, as a result of the Supreme Court’s decision on the ACA, the Medicaid expansion is, in effect , a state option. Almost half the states are moving forward with the Medicaid expansion.
What happened after Medicare was introduced?
The period after Medicare's introduction, for example, was one of declining elderly mortality. However, using several different empirical strategies, the authors estimate that the introduction of Medicare had no discernible impact on elderly mortality in its first ten years in operation. They present evidence suggesting instead that, prior to Medicare, elderly individuals with life- threatening, treatable health conditions (such as pneumonia) sought care even if they lacked insurance, as long as they had legal access to hospitals.
How did Medicare benefit the elderly?
Even absent measurable health benefits, Medicare's introduction of Medicare may still may have benefited the elderly by reducing their risk of large out-of-pocket medical expenditures. The authors document that prior to the introduction of Medicare, the elderly faced a risk of very large out- of- pocket medical expenditures. Tthe introduction of Medicare was associated with a substantial (about 40 percent) reduction in out-of-pocket spending for those who had been in the top quarter of the out- of- pocket spending distribution, the authors estimate.
Does the spread of health insurance explain the rise in health spending?
This conclusion differs markedly from the conventional thinking among economists that the spread of health insurance can explain only a small portion of the rise in health spending. This belief is based on the results of the
What was the spread of health insurance between 1950 and 1990?
Extrapolating from these estimates, Finkelstein speculates that the overall spread of health insurance between 1950 and 1990 may be able to explain at least 40 percent of that period's dramatic rise in real per capita health spending. This conclusion differs markedly from the conventional thinking among economists that the spread ...
What is the evidence that the introduction of Medicare was associated with faster adoption of then-new cardiac technologies?
Consistent with this, Finkelstein presents suggestive evidence that the introduction of Medicare was associated with faster adoption of then-new cardiac technologies. Such evidence of the considerable impact of Medicare on the health care sector naturally raises the question of what benefits Medicare produced for health care consumers.
Why is there a discrepancy in health insurance?
Finkelstein suggests that the reason for the apparent discrepancy is that market-wide changes in health insurance - such as the introduction of Medicare - may alter the nature and practice of medical care in ways that experiments affecting the health insurance of isolated individuals will not. As a result, the impact on health spending ...
When did Medicare start?
Medicare's introduction in 1965 was, and remains to date, the single largest change in health insurance coverage in U.S. history. Finkelstein estimates that the introduction of Medicare was associated with a 23 percent increase in total hospital expenditures (for all ages) between 1965 and 1970, with even larger effects if her analysis is extended ...
What is the economic impact of Medicaid?
Medicaid is a fundamental component of states’ economies, because of the large role it plays in coverage and care and its design as a federal-state partnership. In all states but one (Wyoming), Medicaid is the largest source of federal grant money that states receive—comprising two-thirds of all federal grants to states, ...
How does Medicaid expansion affect the economy?
Studies by states and independent researchers have shown the positive impact of the Medicaid expansion on state budgets and economies, largely driven by increased federal spending in the state as a result of the enhanced federal match for expansion adults (93 percent in 2019 and 90 percent thereafter ). States are required to fund the remaining costs of expansion (7 percent in 2019 and 10 percent thereafter). Expansion states have experienced budget savings, and in many cases, these savings offset at least some of the cost of the state share—as federal Medicaid dollars replace prior state spending—most notably with respect to behavioral health, public health services, and the criminal justice system. Expansion states also reported budget savings as previously covered populations (e.g., waiver populations and pregnant women) become eligible for Medicaid in the adult expansion group where the state receives an enhanced federal match. States have raised revenue for the state share using a variety of strategies, including state general revenue; provider taxes; health plan taxes; tobacco or liquor taxes; and intergovernmental transfers. Some states cite concerns about covering the state share as a reason not to expand.
Is Medicaid good for poverty?
Of all types of health insurance, Medicaid is the most successful in reducing poverty rates. On a person-level basis, Medicaid coverage at different points during the lifespan has been tied to economic mobility across generations and higher educational attainment, income, and taxes paid as adults. Studies by states and independent researchers have ...
Does Medicaid help with personal finances?
Among enrollees, Medicaid coverage is associated with improved personal finances; for example, in Oregon, as compared to a control group, individuals who gained Medicaid coverage were 13 percentage points less likely to have medical debt and approximately 80 percent less likely to have experienced catastrophic medical expenses.
How does medicaid help the economy?
Medicaid produces economic benefits for both the individuals it covers and society as a whole. Medicaid is responsive to economic downturns , enabling people to access coverage and care in times of financial stress. Among enrollees, Medicaid coverage is associated with improved personal finances; for example, in Oregon, as compared to a control group, individuals who gained Medicaid coverage were 13 percentage points less likely to have medical debt and approximately 80 percent less likely to have experienced catastrophic medical expenses. Of all types of health insurance, Medicaid is the most successful in reducing poverty rates. On a person-level basis, Medicaid coverage at different points during the lifespan has been tied to economic mobility across generations and higher educational attainment, income, and taxes paid as adults.
What were the benefits of Medicaid before the ACA?
Even before Medicaid expansion under the ACA, Medicaid coverage was associated with a range of positive health behaviors and outcomes, including increased access to care; improved self-reported health status; higher rates of preventive health screenings; lower likelihood of delaying care because of costs; decreased hospital and emergency department utilization; and decreased infant, child, and adult mortality rates. Three states that expanded their adult Medicaid eligibility levels prior to the ACA—Arizona, Maine, and New York—thereafter experienced an aggregate 6 percent decrease in all-cause mortality rates for 20 to 64-year-olds, translating to 20 fewer deaths per 100,000 residents than compared to states without expanded Medicaid programs.
What is the most important thing about medicaid?
Medicaid has long been an essential source of health insurance coverage for low-income children, parents, elderly, and individuals with disabilities, improving health care access and health outcomes. With the Medicaid expansion under the Affordable Care Act (ACA), authorizing states to extend Medicaid eligibility levels for all adults with incomes up to 138 percent of the federal poverty level (FPL), it is the largest health insurer in the country, covering almost 66 million individuals. Accordingly, Medicaid spending comprises one-sixth of total health care expenditures in the United States, translating to over three percent of GDP.
How did Medicare help offset declining hospital revenues?
One of the impetuses for Medicare was to offset declining hospital revenues by “transforming the elderly into paying consumers of hospital services.” As expected, the demographics of the average patient changed; prior to 1965, more than two-thirds of hospital patients were under the age of 65, but by 2010, more than one-half of patients were aged 65 or older.
Why did Medicare drop in 2009?
According to a Kaiser Family foundation study, the number of firms offering retirement health benefits (including supplements to Medicare) dropped from a high of 66% in 1988 to 21% in 2009 as healthcare costs have increased . In addition, those companies offering benefits are much more restrictive regarding eligibility, often requiring a combination of age and long tenure with the company before benefits are available. In addition, retirees who have coverage may lose benefits in the event of a corporate restructuring or bankruptcy, as healthcare benefits do not enjoy a similar status to pension plans.
How much did Medicare cost in 2012?
According to the budget estimates issued by the Congressional Budget Office on March 13, 2012, Medicare outlays in excess of receipts could total nearly $486 billion in 2012, and will more than double by 2022 under existing law and trends.
Does Medicare increase treatment intensity?
Treatment intensity, as measured by spending per patient per day, increased even though patients after the adoption of Medicare were logically no more ill than patients prior to that date.
How many hospital beds have fallen since 1965?
As a consequence, the number of hospital beds across the nation has fallen by 33% from 1965.
Does Medicare continue to refine payment practices?
As the largest purchaser of medical care in the nation, Medicare continues to refine payment practices to reduce costs and improve quality, despite fervent and active opposition of industry advocates like the American Medical Association and the American Hospital Association. 3.
When did Medicare start a relative value scale?
In 1992 , the resource-based relative value scale (RBRVS) was introduced for physician payments. These payment systems have generally replaced the previous industry practice of paying a negotiated discount of billed charges or fees established by hospitals and physicians that are rarely related to actual costs incurred to deliver the service. As the largest purchaser of medical care in the nation, Medicare continues to refine payment practices to reduce costs and improve quality, despite fervent and active opposition of industry advocates like the American Medical Association and the American Hospital Association.
