Biggest Problems Facing Medicare and Problems Key Similarities and Differences

Categories: HealthMedicare

Problems Facing Medicare and Medicaid

The Federal Government has sponsored Health insurance programs such as Medicare as well as the Medicaid. Medical insurance for the elderly, disabled, as well as low-income Americans are covered by these insurance programs. In 1965, these programs took effect and the Health Care Finance Administration or the HCFA, of the Department of Health and Human Services administered these programs. Health Care coverage is provided by the US government to a variety of groups such as federal employees, military personnel, veterans as well as the Native Americans.

However, the largest proportion of health care expenditures is accounted by the Medicare as well as Medicaid programs.

The program of Medicaid provides Health services as well as residential care to more than 50 million Americans wherein each has unique personal needs. Medicaid provides payment for prenatal care for about one-third of the children of the nation, long-term care for more than 20 percent of elderly citizens as well as health safety for people with disabilities are provided.

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In addition to that several States works on similar initiative to cover the uninsured. Medicaid are facing severe crisis of sustainability. It was found that since 1990s a typical State was able to see that the medical costs have double the percentage of their budget and it was also projected that continued disproportionate growth is evident. In 2006, the combined federal as well as State expenditures totaled $320 billion and by 2016, they are projected to reach $580 billion (“Making Medicaid Work: A Practical Guide for Transforming Medicaid,” 2007).

The Annual Medicaid Budget Survey Report have indicated that at the beginning of the state fiscal year 2008, according to the description of the Medical Directors, State fiscal situation is generally improving, the state revenues are increasing that allowed Governors as well as the state legislatures to restore many cuts as well as restrictions that have been adopted during the economic downturn, and adopt positive changes in Medicaid such as increase in provider payment rates as well as expansion in benefits and eligibility.

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The State policy decisions for 2007 and 2008, includes a clear focus on improving coverage as well as quality of care provider under the program      (Smith V.K., Edwards, B.C. & Tolbert, J. (2008).

Across the states, however, signs that the economic climate was changing, emerged just a few months into state fiscal year 2008, in the fall of 2007. Studies have shown that the outlook was no longer positive as it had been in the case early in the state fiscal year (Smith V.K., Edwards, B.C. & Tolbert, J. (2008).

Different Issues Facing Medicare and Medicaid

Key Issues of Medicaid

A lot of key issues, concerns and priorities in mid fiscal year 2008, have been identified by Medicaid Directors. On top of it were the effects of an increase in fiscal stress across states, a lot of federal state issues such as those impacting Medicaid enrollment and access, as well as their current efforts to address the uninsured (Smith V.K., Edwards, B.C. & Tolbert, J. (2008).

Fiscal Stress across the States

As described by the directors of the State Medicaid, in the last half calendar 2007, economic situation in a lot of states leveled off unexpectedly and in some cases deteriorated. Results have shown that early in fiscal year 2008, the revenues came in below projections on which the state policy makers had based the state budget. Based on the report “as the state approached the mid-point in fiscal year 2008, the outlook for the immediate future was less optimistic than it had been at the beginning of the year.

The directors of Medicaid had also described in the budget survey that at the beginning of state fiscal year 2008, they strongly sense that the state economies were rebounding as compared to the recent years, according to recent rates of growth in state revenues. Due to Annual changes in each state’s federal Medicaid matching rate, the states budget is affected. It would be difficult to achieve significant Medicaid cost savings now than it had been during the last economic downturn and Medicaid cost control actions are not often easy and almost always have impacts on the effectiveness of the program (Smith V.K., Edwards, B.C. & Tolbert, J. (2008).

Issues of the Federal-State

The recent federal regulatory changes are adverse to the states, according to Directors of Medicaid, and it will provide negative impact on the programs including the proposed changes regarding the Medicaid benefit design as well as the Medicaid financing arrangements. They also have singled out the Health Information Technology as an example of the state-federal relations moving in a positive way (Smith V.K., Edwards, B.C. & Tolbert, J. (2008).

Improving Access in Medicaid

In Medicaid the issue of access had been perennial because of generally lower rates of provider reimbursement in most of the states, occasional budget-driven cuts or freezes, as well as rate increases occurring at certain intervals when authorized by state legislatures. Few providers of specific types as well as commercially insured patients encountered access problem for certain specialists such as psychiatrists, pediatric specialists in some states. Directors have also expressed concern over access to oral as well as mental health services. It was observed that in many states there are few dental health providers who participate in the Medicaid program. Moreover, participation has not been improved just by the rate of increases. In fact, one state reported that despite the rate adjustments, even dental clinic of public university would no longer serve Medicaid patients. In addition to that, while access to mental health services suffers from lack of providers, the issue gets more complicated by the lack of resources and need to coordinate with other agencies in order to provide non-medical services (Smith V.K., Edwards, B.C. & Tolbert, J. (2008).

Enrolment in Medicaid

“The total Medicaid enrollment dropped by -0.5% in fiscal year 2007on average across all states, with increase enrollment for almost half of the states and decrease enrollment for over half of the states. Reports indicated that Medicaid caseload was showing flat or continued downward-sloping caseload trend, and in addition to that, several state indicated that their current projections had been revised upward. Where the caseload was now increasing, the upward caseload trend was thought to be associated with a more sluggish economy (Smith V.K., Edwards, B.C. & Tolbert, J. (2008).

The Health Care Reform and Covering of the Uninsured

The Governors, as reported by the Medicaid directors are interested in reforming the health care system as well as the strategies to reduce the number of individuals who do not have health insurance coverage. A lot of states have proposed initiatives to address the problem of the continuous increase of the number of uninsured nationally. In some states their goal is universal coverage, on the other hand, others focused on increasing coverage options for the targeted populations (Smith V.K., Edwards, B.C. & Tolbert, J. (2008).

Key Issues of Medicare

One of the major problems of Medicare program is that financing mechanisms of Medicare will not be able to sustain it in the long run. Another concern is that the structure of the program which in large measure reflects health care delivery and political considerations in effect at the enactment, has failed to keep pace with the changes in the health care system as a whole. A lot of individual suggest that in order to address this problems major structural reform are required. However, to others the existing system should be improved rather than replaced. As of now, there has been no consensus reached. The major focus in the recent years has been on providing prescription drug coverage for beneficiaries. According to some observers, it would not be appropriate to add new costly benefit before structural reforms are enacted, while others stated that seniors, particularly low-income seniors, should not be required to wait for benefits until resolution of the entire restructuring issue (O’Sullivan, Chaikind, and Tilson, 2001).

Program financing is the major concern to policy makers. Another important issue that they are facing is whether the program has responded to changes in the health care delivery.

Another issue is fraud in Medicare. Sometimes beneficiaries are not safe, that is why Medicare is working hard in order to protect them from being a victim of fraud (Quick Facts About Medicare Prescription Drug Coverage and Protecting Your Personal Information).

Key similarities of the Problem

Both Medicare and Medicaid are having problems in sustaining the program.

“The biggest problem that the Federal Government is facing is fraud in Medicare as well as Medicaid. They wish to address the problem by teaching the beneficiaries of Medicare and Medicaid on how to avoid being the victims of fraud, waste and abuse. Mr. Clarkson stated that everyone is at stake in this since the money lost, in these practices has an impact on premiums and deductibles and could result in cutbacks to these programs” (“Medicare Fraud,” 2008).

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Biggest Problems Facing Medicare and Problems Key Similarities and Differences. (2016, Nov 16). Retrieved from

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