Marilyn Moon

The Unprepared Caregiver

Years of studying health care financing and delivery does not prepare you for the actuality of dealing with a serious health event. The practical challenges of our extremely fragmented and complex health care system make it difficult to navigate this world-even when someone is there to help the patient. And, being a caregiver is a far cry from being a health care analyst. There are many lessons to be learned for improving our system: the need for skilled co-ordination support, the need for simplifying and re-orienting the various silos of postacute care, the importance of generating ways to support caregivers, and not least, promoting simple lessons in civility for providers of services.

Medicare and the Affordable Care Act

The recently enacted Patient Protection and Affordable Care Act made modest changes to improve Medicare and obtained a substantial share of funding for the Acts broader reforms from future spending reductions in the program. Drug benefits and preventive services were improved. While painful, the spending reductions will have only moderate impacts on beneficiaries and should help achieve the goals of health care reform: encouraging better primary and preventive care, making providers conscious of finding ways to increase the productivity of care delivered and changing the relative levels of payment across certain providers. Additional costs to beneficiaries will arise from changes in private plan payments and increasing income-related premiums.

Organization and Financing of Health Care

Publisher Summary nGrowth in the costs of Medicare and Medicaid is attributable to the same factors generating rising costs in the rest of the health care system. The constant development of new technologies and procedures, increasing rates of utilization, and a high rate of inflation in the overall health care arena have much greater effects. Medicaid offers generous fill-in benefits for persons with low incomes and assets. The financing issues facing Medicaid are also complicated. The concern about crowding out within state budgets can be made for this program as well, especially because the constitutions of almost all states require them to balance their budgets. A number of studies have tracked changes in employer behavior, each showing the same downward trend. Medigap is most useful for reducing potential catastrophic expenses for those who have high costs in a particular year. The financing of the Medicare program is likely to face key challenges in moving forward. The future of Medicare remains a controversial political issue mainly because this is a large and popular public program that faces projections of rapid growth. A good area to begin improvements in knowledge about the effectiveness of medical care would be with prescription drugs. Issues of fairness raise important considerations about how much beneficiaries can be asked to pay and how much should be required from others.

LIFETIME TAXPAYER CONTRIBUTIONS AND BENEFITS OF MEDICARE AND SOCIAL SECURITY

Many criticisms of Medicare and Social Security have suggested that beneficiaries get more than they paid into the system over their lifetimes and these entitlement programs may be unsustainable if they are insufficiently funded. But studies do not always use appropriate assumptions for estimating lifetime values. Our simulation model properly aligns the financing sources with the benefits received by making consistent comparisons and using a more appropriate inflation adjustment. Our study suggests that using different assumptions can dramatically change the balance between contributions and benefits as compared with other analyses. Choosing the appropriate assumptions is essential for a reasoned debate on the important issues about the future and financing of Medicare and Social Security. (JEL I13, H5, H24)

Twenty-one – Organization and Financing of Health Care

Publisher Summary Medicare was established by legislation in 1965 as Title XVIII of the Social Security Act and was aimed at providing mainstream acute health care—hospital, physician, and related services—for persons 65 years and over. Because of Medicares limited benefits, private and public supplemental plans have been developed to meet older persons additional needs for health insurance. Medicaid—a means-tested public benefit established at the same time as Medicare—subsidizes many poor older persons through several different arrangements. Other plans are employer-based retiree insurance and individual supplemental coverage policies that are provided by private insurers. Another option is essentially a hybrid, in which private health plans that contract with Medicare to provide Medicare-covered services also offer at least some additional supplemental benefits. Reform options stressing competition seek savings by relying on not only private plans but also competition among those plans. These options include allowing premiums paid by beneficiaries to vary such that those choosing higher cost plans pay substantially higher premiums.

Chapter 19 – Organization and Financing of Health Care

Medicare and Medicaid represent crucial sources of support for seniors - both in terms of access to healthcare and financial well-being. While the debate over health care reforms for those under the age of 65 has been a major source of discord and confusion, the Medicare program has retained its strong support from both beneficiaries and the public at large. Medicaid also enjoys support for its long term care services. Yet these programs are likely to face potential changes as faith in government and willingness to support the revenues necessary to sustain Medicare and Medicaid once again receive scrutiny. The aging of the Baby Boom population will continue to keep financing concerns near the forefront of debates over the federal budget even though some slowdown in growth has been achieved in recent years. Regardless of their popularity, Medicare and Medicaid will be a key focus of negotiations over how to finance the federal government and emphasis on privatizing Medicare will likely be on the political agenda as a potential solution.