Social policy today 599payments. Medicare and Medicaid, the two pillars of federally provided health care
that predate the ACA, are administered by the Department of Health and Human
Services.
Medicare, the federal health care program for retired people, has three main
parts. Part A automatically applies to retirees when they qualify for Social Security; it
covers inpatient care in hospitals and skilled nursing facilities, hospice care, and some
home health care. Medicare Part B helps cover doctors’ services; outpatient hospital
care; some other medical services that Part A does not cover, such as some physical
and occupational therapy; and other types of home health care. In 2003, Congress
passed an important new benefit, the Medicare Prescription Drug, Improvement, and
Modernization Act (Part D). The plan covers about 75 percent of the cost of prescription
drugs for anyone who is enrolled in Part A or Part B of Medicare, up to a certain level of
expenses.
The other government health care program, Medicaid, serves poor people
who otherwise would have no health care. Medicaid is administered through the
states with substantial funding from the federal government. Although Medicaid
is an entitlement, states have considerable discretion over the program. As the
government’s website on Medicaid explains, each stateestablishes its own eligibility standards; determines the type, amount, duration,
and scope of services; sets the rate of payment for services; and administers its own
program. Medicaid policies for eligibility, services, and payment are complex and vary
considerably, even among states of similar size or geographic proximity. Thus, a person
who is eligible for Medicaid in one state may not be eligible in another state, and the
services provided may differ considerably in amount, duration, or scope from services
provided in a similar or neighboring State.^53This variation in state coverage means that some states cover virtually all poor
people and others cover as few as one-third of those in need. Overall, 72.3 million
Americans receive health care through Medicaid at a cost of $582 billion. The federal
government reimburses the states for 63 percent of the costs ($367 billion in 2017),
but this percentage varies by state income level and whether or not a state accepted
the expansion of Medicaid under Obamacare, as we will discuss below.^54 The federal
government paid all the costs associated with expanding Medicaid for the 12 poorest
states in fiscal year 2019 under the enhanced reimbursements from the ACA, and
88 percent of the costs for the 14 wealthiest states, which is the minimum level set
by law.^55 Like Medicare, Medicaid faces growing budgetary pressures in the coming
years. An increasing share of Medicaid’s costs is for long-term nursing home care for
the indigent elderly, and the need for this service continues to grow as the population
ages. At the other end of the age spectrum, Medicaid was expanded in 1997 to provide
health care for children in families that make too much to qualify for Medicaid but
not enough to buy private insurance for their children (incomes that are no more than
double the poverty level). By 2017, the Children’s Health Insurance Program (CHIP)
covered 9.46 million children and 36.9 million additional children were covered by
Medicaid.^56 This popular program had always received strong bipartisan support until
2017, when House Republicans attempted to tie cuts in Obamacare to reauthorization
of CHIP. A deadlock left the program unfunded for nearly four months, until Congress
reauthorized it for six more years early in 2018.^57Federally Provided Health Care’s Long-Term Challenges The long-term fiscal
problems of Medicare and Medicaid are severe. In fact, they dwarf Social Security’s
problems. The 2018 Medicare Trustees Report estimates that Social Security’s unfundedMedicare
The federal health care plan created
in 1965 that provides coverage for
retired Americans for hospital care
(Part A), medical care (Part B), and
prescription drugs (Part D).Medicaid
An entitlement program funded by
the federal and state governments
that provides health care coverage for
low-income Americans who would
otherwise be unable to afford health
care.entitlement
Any federal government program that
provides benefits to Americans who
meet requirements specified by law.Full_17_APT_64431_ch16_572-613.indd 599 16/11/18 11:28 AM