Health Care Delivery



Health Care Delivery

Chapter 2

Question 1-A

Answer 1-A

The intent of Medicaid is to provide health insurance to low-income state residents, but with different eligibility rules, benefits, and payment schedules. Each state initiative is governed by various federal guidelines and the federal government contributes between 50% and 78% of its cost, the poorer the state, the larger the federal contribution. Given Medicaid's decentralized structure, state officials have considerable discretion. Unsurprising result is that states such as New York have more generous eligibility criteria than do poorer states. Interestingly, however, there are stark contrasts even among the larger states. Federal regulators disputed the claim and suggested that the states themselves were largely responsible for the increase, citing accounting techniques through which states shifted state-funded programs into their Medicaid budget so they could draw down additional federal dollars. This argument produced significant intergovernmental tension.

Two trends dominated Medicaid policy during most of the 1990s. First, states used their expanded discretion to encourage or require recipients to enroll in managed care delivery systems. Between 1987 and 1998, the percentage of enrollees in Medicaid managed care increased from less than 5% to more than 50%, from fewer than 1 million people to more than 20 million. Second, growth in the number of Medicaid enrollees ended and a slow decline began. Te most convincing explanation for the decline was federal welfare reform, enacted in 1996. Before then, people receiving Aid to Families with Dependent Children (welfare) were automatically enrolled in Medicaid. Thereafter, welfare recipients needed to apply separately for Medicaid, as did those no longer entitled to welfare but still eligible for Medicaid. Millions did not know they were Medicaid-eligible, the states set steep administrative hurdles that deterred others from applying, and still others were dissuaded by the stigma attached to receiving public assistance. For all of these reasons, between 1995 and 1997, the number of adult Medicaid recipients declined 5.5% and the number of child recipients declined 1.4%.

Like Medicaid, Medicare intent was enacted in 1965 to provide health insurance to segments of the population not generally covered by the mainstream employer-sponsored health insurance system. And like Medicaid, Medicare has become a major part of the nation's health care system, providing insurance coverage to 38 million persons over the age of 65 and to just over 8 million of the young disabled population, at a total annual cost of more than $509 billion. In other respects, however, Medicare differs significantly from its sister program. Medicare is a social insurance program, providing benefits to the old aged and the disabled regardless of income, whereas Medicaid is a welfare initiative, offering coverage only to those with limited income. Medicare is administered by federal officials and the private insurers they hire to perform particular tasks, whereas Medicaid is administered by the states following federal guidance. Medicare is funded primarily by the federal government.

Question 1-B

Answer 1-B

Two sub parts dominated Medicaid and Medicare policy during most of the 1990s. First, states used their expanded discretion to encourage or require ...