How Have Population Changes Affected the Medicare Program?

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How Have Population Changes Affected the Medicare Program?

A Brief History of Medicare

Medicare is built to be mostly funded by the government in order to help care for the aging population in the United States. On July 30th, 1965, President Lyndon Johnson was finally able to sign Medicare into law. But it would take another 20 years after signing it into law to be implemented. This is because of how long it took for Congress to agree on the terms and pass the bill.

The Senate and House of Representatives went back and forth on the terms of the new law. This eventually lead them to a “three layer cake” type of Medicare coverage. These three layers consist of hospital insurance for the aged, physicians’ insurance for the elderly, and expanded federal assistance to supplement state medical payments for the poor.”

Although there has been many changes over the years, it remains the backbone of the concept of the Medicare program.

How does Medicare work?

Medicare A and B

Medicare Original – which consists of the medicate A and B plans – is typically the least expensive option. It doesn’t include any extra features such as dental, vision. or prescription plans. But it does provide coverage for any medically necessary hospital visits or stays as well.  These are things like doctor’s visits and medical exams.

While this option will cover emergencies and some doctor’s visits there are limitations. It typically won’t cover the things necessary for preventative and sick care for someone who is aging.

Medicare Advantage or Medicare C and D

If you have either Medicare Advantage or Medicare C or D , it most likely means you pay more. This is because you have to partner with a private insurance company to get coverage. While this is more expensive, in 2022, there are more private options than years prior. Because of the increase in competition, it helps bring the price down between all the insurance companies.

Medicare Advantage usually gives you the ability to have dental and vision insurance for more money – Medicare C. If you want to add the additional coverage of a prescription plan (Medicare D), you can do that as well.

If you aren’t sure which plan you have, or currently looking into plans, click here to learn more. This will help you learn about different Medicare plans and options. It’s important to understand all your medical needs. So before you make a choice about which type of plan is best for you, make sure to know exactly what your needs are.

How has Medicare changed over the years?

Medicaid has undergone significant changes over its 70+ years of operation. This is in part due to the constant changes in the medical field as we learn more about the human body. Health, illness and diseases are things that are ever evolving. One of the biggest changes in the medical field is the how much more important preventative health is as oppose to just “sick care”.

Although it stops in 2010, this timeline gives a detailed look at how Medicare has evolved since its conception. The payment per beneficiary has obviously increased quite a bit just like the components of Medicare coverage and affordability.

The Affordable Care Act

In 2010, President Obama signed the Affordable Care Act (AFA). This legislation was incredibly controversial with people both criticizing and praising it. But it did make significant changes to the Medicare program by giving millions of people better access to preventative care. The changes that AFA made include:

  • Strengthening Medicare coverage of preventive care
  • Reducing beneficiary liability for prescription drug costs
  • Instituting reforms of many payment and delivery systems and 
  • Creating the Center for Medicare and Medicaid Innovation

The Change of the Population Landscape in the United States

In a report to congress in 2015, the amount of baby-boomers that would become eligible for Medicare was alarming. One report shows that the number of beneficiaries who will receive Medicare will increase to over 80 million by 2030. That’s a 48% increase from the 54 million beneficiaries that receive care in 2015. Not only will there be a change in the amount of beneficiaries but also in the demographic. Here are some expected changes of those in the program.

1. The Average Age of the Medicare Population Will Initially Skew Younger than in the Recent Past.

This is because of the large amount of baby boomers that are now entering the Medicare program in the past few years. Not only that, after a few years, the median age is expected to change as they grow older as well. Because of advancements in modern medicine, life expectancy has increased over the years allowing many to reach the age of 80.

2. Will the Medicare Population be More Racially and Ethnically Diverse Given the Growing Racial and Ethnic Diversity of the Total U.S. Population?

The short answer to this complex question is that the Medicare population is, and will for some time be, less diverse racially and ethnically than the population as a whole.

Part of this phenomenon is due to the younger generation in the US. The fact is that this generation is rapidly expanding in terms of racial and ethnic diversity. Many of the ethnic population were never US citizenship to begin with. This makes it impossible for them to apply for Medicare for when they need it.

Since then, the rules and regulations of Medicare are constantly in flux and changing. This means that some younger generations may likely qualify for Medicare by the time they come of age.

3. How Has the Overall Health of the Beneficiaries Changed? 

The health status of the Medicare beneficiaries to come is not clear. So far the baby boomer generation has a lower rate of smoking compare to previous generations. But they  also have a higher rate of obesity and diabetes.

This generation also appears to have higher rates of other diseases and of chronic conditions, but are more likely than others before them to have certain health conditions under control given the rapid medical advances we have seen in the past few decades. 

4. What about Supplemental Health Insurance Coverage for Medicare Beneficiaries?

For a long time now, Medicare coverage has a limit on certain health care expenses. According to one study, Medicare fee-for-service (FFS) benefits only covers about 80% of the cost of Medicare services in 2011 (McArdle et al. 2012). Not only that, but some beneficiaries paid for some benefits through their premiums. This gap between coverage and what is out-of-pocket is shown to increase as the number of beneficiaries grows.

5. What about Medicare Advantage?

Part C of Medicare became Medicare Advantage (MA) in 2003.  The percentage of Medicare beneficiaries enrolled in MA plans increased by almost double between the years of 2005-2013. 

The rapid growth and  higher MA payment rates allowed for plans to attract beneficiaries with come away from Part B and Part D premiums and lower their cost sharing.

According to Medicare Advantage.com, in 2022 the average Medicare beneficiary can choose from 39 available plan options, This is the largest number of plans in a decade

With more plan options being sold by more providers, there is increased competition between insurance companies. This helps keep costs low for consumers.

So how have the US population changes affected the Medicare Program?

Whether you are someone that is about to become eligible for Medicare, or you are someone who is still years away from Medicare eligibility, it’s important to understand the trends and what options may be available for you or your loved ones as they need Medicare coverage. 

As the population grows and changes and ages, the framework on which Medicare was built will have to figure out how to adapt with the changes. One thing to consider is how the Medicare coverage addresses the health concerns of different ethnic groups. 

Ensuring that there is culturally competent healthcare needs to be a priority as the demographic and landscape of the aging population in the US changes and as more and more minority groups are eligible for Medicare. 

There have been countless studies done on disparities in healthcare when it comes to certain minority groups as opposed to the care that caucasion people typically receive. Spending time to make sure that the coverage and networks of doctors available to ever

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