Medicaid and Medicare Programs

Medicaid and Medicare

Medicaid and Medicare are two health programs that sound very similar and usually confused and used interchangeably despite being very different. Each of these government health insurance programs is regulated by a set of its own policies and laws (Mitchell, Potter & Amin, 2019). In addition, the programs differ on the premise that they designed for different sets of individuals. Medicare is a federal health insurance program that serves people aged 65 years or more or those under 65 years and have a disability. This program provides health insurance coverage to these individuals regardless of their incomes. Medical bills under this program are paid from trust funds paid into by those covered (Digital Communications Division, 2015). As a federal program, Medicare is primarily similar across the country and run by the Centers for Medicare & Medicaid Services. On the contrary, Medicaid is an assistance program that serves low-income individuals of every age. This program is run by state and local governments based on federal guidelines and differs across states. While a small co-payment is required in some instances, patients always pay no part of the costs for covered healthcare expenses.

Since the 1990s, states have actively expanded their Medicaid programs as they extend coverage to more low-income individuals who were previously uninsured. As part of this expansion, states have chosen to depend on managed care arrangements to serve expanded and current Medicaid populations. Health maintenance organizations (HMOs) are the most commonly used managed care arrangements. As a result, Medicaid enrollment in HMOs has continued to grow since 2002 (Draper, Hurley & Short, 2004). Despite the growth in total enrollment in HMOs nationally, enrollment has decreased each subsequent year since it peaked in 1999. This is an indicator of the difficulty in enrolling all of the Medicaid population in HMOs. It would be difficult to enroll all of the Medicaid population in HMOs because of the decline in flush state budgets funding, cost reduction measures for Medicaid programs by states, and reduction in plan payment rates.