How Have Population Changes Affected the Medicare Program?

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

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.