Health Insurance Plans and Their Impact on the United States Essay Example

Introduction

Medicare and Medicaid are healthcare programs that are sponsored by the government in the United States. The difference between them is found in the groups covered and how they are funded and governed.

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Medicare

Medicare (Original Medicare) is a federal program functioning in the United States to provide health insurance to citizens of the United States and any other person who is eligible for the program. Medicare is the largest payer for people with ESRD, the elderly and inpatient services. Qualified individuals are the citizens of the United States and legal residents who have already lived in the United States for at least five consecutive years before their Medicare application. A healthy individual at age 65 or higher is eligible for the program.

Additionally, people younger than 65 but with a qualifying disability and people with ALS and end-stage renal failure at any age can also get into the program. The program contains parts A and B. The first part of the program provides coverage for skilled nursing care and inpatient hospital care. The second part covers outpatient care and doctor visits.

Medicare also contains private plans (Parts C and D) to choose from to get more coverage. Part C (Medicare Advantage plans) put together the blanket for parts A and B and has additional benefits such as drug coverage which is not present with Original Medicare. Part D includes the plans for prescription drugs. One can get the Medicare Advantage plan to get drug coverage or a standalone plan for part D. Medigap (Medicare supplement insurance) assists in covering all or some costs (coinsurance, copays or deductibles) that are not taken care of by Original Medicare.

The premiums charged for Medicare and the available plans are fixed for each month. Coinsurance, copays, and deductibles are paid as part of the health care services cost. With deductibles, a fixed amount is paid out of pocket for any services rendered before the insurance limit is achieved, or Medicare starts paying. Copays involve making payments whenever one receives a service covered in the plan. Coinsurance consists in paying a fraction of the cost for the service received, and the chosen method or Medicare pay the remaining portion. Individuals under Part A coverage do not make payments if they paid Medicare taxes for ten years or more or had a spouse who did. In 2014, most individuals under Part B paid $104.90 per month. Costs for Part D vary around $30 per month while payments for Medicare Advantage vary greatly (Sommers, 2014).

Medicaid

Medicaid is a cooperative state and federal health care coverage program. The program is also the largest payer of births, long-term care services, and mental health services. Medicaid covers 40% of all births in the nation. Medicaid covers children, pregnant women as well as low-income adults. Eligibility for the program is variant in different states. States are required to cover particular eligibility groups by federal law as well as the flexibility to include other groups. The following populations are eligible in all countries: seniors, pregnant women, people with disabilities and blindness, parents of minors, adolescents and children. Some resource limits have to be met in most eligibility groups while all groups have to reach the Federal and State requirements for residency, U.S citizenship, and immigration status.

Services covered by Medicaid include outpatient and inpatient hospital services, medication, mental health services, doctor visits, maternity, and prenatal care and preventive care such as colonoscopies, mammograms, and immunization. Optional coverage by states may include vision and eyeglasses, prosthetics, physical therapy, community, and home-based services and dental services. Some beneficiaries can be eligible for both Medicaid and Medicare and are referred to as dual eligible beneficiaries. They are those with Medicare Part A, B, both Medicaid coverage. Benefits are paid to health care providers, and in some states, the beneficiaries have to make co-payments for services received.

Private Insurance

On the other hand, private insurance in America encompasses insurance that is not covered by agencies run by the government. The plans can be bought through online brokers such as eHealth, health insurance agents, and private health insurance companies. Private insurance involves paying more, and it is mostly used by well-off individuals (Pitayarangsarit & Tangcharoensathien, 2002). After 2014, buying individual coverage from private insurance companies can only occur during the enrolment period (Sommers, 2014).

Impact on the Healthcare System

With a relatively high user satisfaction and hovering around 20% of the population, Medicaid is a program whose importance cannot be trivialized. In the event of a shutdown of Medicaid this year, some burdens and benefits would come up as a result of obliterating that government insurance plan. Many individuals would be left without cover, leaving them with significant responsibility for health care costs. The 30 million children covered by Medicaid would be left without insurance, around 5 million children with special needs, seniors, and close to half of all childbirths would not be included (Dickman et al., 2017).

Individuals with dual eligibility would still have some cover with Medicare and people would be forced to move to private insurance companies or self-insure themselves. Not many people would move to Medicaid as their eligibility criteria do not significantly overlap. All the people who cannot afford private insurance plans would be left without any cover. Older people would lose a lot of money due to the many years of contributing to the program. These older adults would have to spend their savings and sell their assets to pay for their healthcare. Their consumption levels would decrease. The young would redirect their tax cuts to other insurance companies. On a long-term basis, the number of deaths resulting from insufficient medical services would be expected to increase while many private insurance companies would emerge and grow (Dickman et al., 2017).

Getting rid of Medicaid may not necessarily reduce government spending Shifting to Medicare would increase government costs. Private insurers would have a more significant burden while self-insured individuals would pay through the nose. The medical relief program and employers would experience increases. Payroll taxes would reduce as well. On the other hand, cutting government spending alongside removing payroll taxes would lead to macroeconomic benefits. However, the interests that could be acquired would be trumped by the massive loss that would be experienced in aggregate welfare amounts that would have to be increased and improved over time. Each person would require a salary of $29,500 to live without medical cover (Dickman et al., 2017).

References

Dickman, S. L., Himmelstein, D. U., & Woolhandler, S. (2017). Inequality and the health-care system in the USA. The Lancet, 389(10077), 1431-1441.

Pitayarangsarit, S. I. R. I. W. A. N., & Tangcharoensathien, V. I. R. O. J. (2002). Private health insurance. Health insurance systems in Thailand.

Sommers, B. D., Musco, T., Finegold, K., Gunja, M. Z., Burke, A., & McDowell, A. M. (2014). Health reform and changes in health insurance coverage in 2014. New England Journal of Medicine, 371(9), 867-874.