One of the key aspects of human efficiency is making decisions based on facts and data rather than ideological thinking. This is a critical aspect of having an efficient government and political system.
The healthcare debate going on often revolves around Medicare and Medicaid, primarily because of their cost. But unless you are older or have another reason to be involved with these programs you probably don’t know much about them, as is the case with me. So here you go.
Medicare and Medicaid were created in 1965 as part of President Johnson’s “Great Society”. Medicare provides coverage for older people (65 or older) and people with severe disabilities. It is a federal program. In 2015, Medicare provided health insurance for 46 million people age 65 and older and 9 million younger people suffering from disabilities for a total of 55 million people. Medicare enrollment is projected to increase to 79 million people by 2030.
Medicaid, on the other hand, provides health insurance to low income individuals and is paid for by a combination of state and federal funds. In 2009, Medicaid had an average enrollment of 50.1 million people with 62.9 million people enrolled for at least one month. In 2010 Medicaid assisted about 60% of nursing home residents and 37% of childbirths. In 2013, about 9 million people qualified for both Medicare and Medicaid.
The Affordable Care Act expanded eligibility for Medicaid for U.S. citizens and legal residents up to 133% of the poverty threshold. However, based on a Supreme Court Decision, many states have opted to stay with pre-ACA eligibility standards.
According to KFF.org, in 2014 total Medicare expenses were $505 billion or 14% of a total federal budget of about $3.5 trillion. Medicare payments were $597 billion which were partially offset by premiums, etc. Total Medicaid expenses in 2016 were $574 billion with California alone being about $82 billion. The federal government pays about 57% of Medicaid expenses.
The problem with these programs, in particular Medicare, is that as America ages the amount spent will increase. For example, by 2047 it is estimated that greater than 20 percent of the population will be 65 or older. It is estimated that between 2014 and 2024 the amount spent on Medicare will increase from $505 billion to $866 billion.
It is noted that the high costs of health care in the U.S. are part of the problem. As was pointed out in previous posts, we pay about twice what they do in Canada and European countries for worse health care. This is another reason that we need to look into adapting a similar system. This alone could reduce the costs by 50% and provide us with a better healthcare system.
With regard to Medicaid, the rates of poverty and the threshold of coverage impact the costs. According to Children’s Defense Fund, there were 43.1 million poor people in America. One in three of these were children. Although child poverty was declining as of 2016, it is still higher than it was before the last recession began in 2007. A big contributing factor here is family characteristics, i.e. single-parent families. Possible resolutions to this were discussed in a previous post related to poverty.
The goal of these posts is to provide the fact-based story behind issues that we are facing in this country. We can no longer allow ideology to make decisions for us and hold back progress when the issues that we have are so easy to solve.