Medicare provides health insurance to nearly 57 million individuals (17% of the U.S. population) in three categories: those who are over the age of 65; those under 65 who receive social security disability insurance; and those under 65 with end-stage renal disease (ESRD). As described by the Commonwealth Fund’s Medicare at 50 Years series, Medicare beneficiaries are “the nation’s oldest, sickest, and most disabled citizens.” In 2013, 30% of Medicare beneficiaries were either over 85 or disabled and under 65. Seventy-five percent of beneficiaries have one or more chronic condition and 25% rate their health status as fair or poor.
Before the Medicare program, 48% of adults over the age of 65 did not have health insurance; that figure has fallen to 2%. The intentions of the Medicare program were and are two-fold: (1) ensure that beneficiaries have access to health care; and (2) protect beneficiaries from health care-related financial hardship. By the numbers, Medicare has been an immense success. Only 13% of older Americans now pay out of pocket for their health care costs (versus 56% in 1966). Medicare has also increased life expectancy at 65 by five years.
Over the years, Medicare has evolved to meet the needs to an aging and sicker population, from the addition of coverage for individuals with ESRD to the creation of Medicare Part C. The ACA also made important changes to the Medicare program, including moving the program away from the traditional fee-for-service payment model and implementing programs to hold providers accountable for quality and cost of care. These changes are vital steps to strengthening and safeguarding Medicare for future generations.
- Annual Wellness Visit: This visit includes a health risk assessment with 4 goals: (1) establish/update health history; (2) create a single list of health care providers and medications; (3) take routine measurements (weight, height, BMI, etc.); and (4) assess for cognitive impairments.
- No-Cost Preventive Services: Services that apply to the individual and are recommended by the with USPSTF with an A or B grade are available at no cost-sharing. A full list can be found here and include services such as cancer screenings, annual flu shots, and Hepatitis B vaccines.
- Prescription Drug Costs: The Medicare Modernization Act of 2003 enacted Medicare Part D, which made prescription drug coverage available through private insurance plans. However, Part D also created a gap in coverage once prescription costs exceeded a certain amount. This gap was called the “donut hole”— beneficiaries were required to pay the full cost of prescriptions until they reached a higher, catastrophic cost threshold. The ACA lowered the cost of prescription drugs for those in the coverage gap and phases out the “donut hole” by 2020.
- Primary Care Workforce: Easy access to basic medical care from primary care providers is crucial for appropriate and timely preventive and chronic care however, reimbursement payments for specialty providers have trended up in recent decades, incentivizing new physicians to choose more specialized careers. The ACA provided a 10% increase in payments to primary care providers and general surgeons for five years (2011-2015). The ACA also created scholarship and loan repayment programs to encourage new health care professionals to enter into the primary care workforce.
- Chronic Care Management: The ACA created the Community-based Care Transitions Program (CCTP) to fund community-based organizations to transition services to help lower 30-day readmission rates. The ACA also created the Medicare-Medicaid Coordination Office to integrate care and payments for the dual eligible population [the most expensive segment of the beneficiary population].
- Center for Medicare and Medicaid Innovation (CMMI): Congress created CMMI for the purpose of testing “innovative payment and service delivery models to reduce program expenditures …while preserving or enhancing the quality of care” for those individuals who receive Medicare, Medicaid, or Children’s Health Insurance Program (CHIP) benefits. Some of the most important innovations being tested include the Comprehensive Primary Care Initiative, a Bundled Payments for Care Improvement Initiative, and variations on the accountable care organization (ACO) model [the Medicare Shared Savings Program (MSSP) and Pioneer ACOs].
- Hospital Readmission Reduction Program: The ACA created penalties for hospital readmissions and hospital-acquired conditions. If hospitals exceed calculated benchmark levels of readmission rates for various health conditions (i.e. heart failure, COPD, pneumonia), they are penalized with a reduction in their Medicare payment.
While the ACA is reshaping the Medicare program through delivery, payment, and quality reforms, there are still many challenges–a recent report indicates that Medicare will be insolvent by 2026. Future Medicare reforms need to address the complexity of the program (the fragmentation of care provided by Parts A-D), helping low- and modest-income beneficiaries pay for uncovered costs, and further improve provider payment models.
Image from KFF.