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A milestone year for Medicare, Medicaid, Older Americans Act, Social Security

January 16, 2015
by Lois A. Bowers, Senior Editor
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2015 means anniversaries for Medicare, Medicaid, Older Americans Act, Social Security

Several major programs benefiting elder citizens of the United States are observing milestones this year. 2015 is the 50th anniversary of Medicare and Medicaid as well as the Older Americans Act, and it is the 80th anniversary of Social Security. Leaders of associations representing aging services providers recently discussed the past and present significance of these programs—and what needs to happen to ensure their future success—with Long-Term Living.

Medicare and Medicaid

Medicare by the numbersPresident Lyndon B. Johnson formally proposed the Medicare and Medicaid programs to Congress in a special message dated Jan. 7, 1965. Noting recent accomplishments on the healthcare front, he wrote: “Our first concern must be to assure that the advance of medical knowledge leaves none behind. We can—and we must—strive now to assure the availability of and accessibility to the best health care for all Americans, regardless of age or geography or economic status.”

Larry Minnix, president and CEO of LeadingAgeThe Medicare and Medicaid programs were the country’s “first attempt at, essentially, a national health insurance policy,” notes Larry Minnix, president and CEO of LeadingAge. The programs have expanded over the years—Medicare added prescription drug coverage in 2006, for instance—but through the Affordable Care Act and other means, the programs should be modernized further to include managed care and population health approaches, Minnix says. “There are things that need to be improved about them today, because they’re 50 years old,” he says. “But that’s going to be part of the fight over the next few years as to how to change them to make improvements.”

Cost matters will figure into equations related to the future of Medicare and Medicaid. Medicare spending for its 54 million beneficiaries (including those aged at least 65 years as well as people with permanent disabilities), at $583 billion, represented 14 percent of the federal budget in 2013, and Medicaid spending represented eight percent, according to data from the Congressional Budget Offfice (CBO). Medicare also is a major payer in the healthcare system, accounting for 20 percent of total healthcare spending in the United States in 2012. And spending is expected to increase as the population ages and requires care of a higher acuity.

Medicaid by the numbersThe elderly represented nine percent of Medicaid’s 68 million beneficiaries and accounted for 21 percent of its $397.6 billion in expenditures in fiscal year 2011, according to a report using estimates from the Kaiser Commission on Medicaid and the Uninsured and the Urban Institute.

Medicare funding currently comes from three sources: general revenues (accounting for 41 percent of funds in 2013, according to a 2014 government report), payroll tax contributions (38 percent) and beneficiary premiums (13 percent). Medicaid is funded by the federal and state governments. LeadingAge’s Pathways framework, which outlines several ways to pay for long-term services and supports, “could relieve the financial burden of Medicaid in particular, and has some unstudied implications on the use of Medicare dollars,” Minnix says. The organization has identified advocating against across-the-board cuts to Medicare as a priority for this year.

Clif Porter, senior VP of government relations, American Health Care Association (AHCA)Clif Porter, senior vice president of government relations for the American Health Care Association (AHCA), who is a former nursing home administrator, says he is “blown away” by the positive changes that have occurred during his 25 years in the industry. “Much of that has been driven by Medicare policy,” he says, listing the Centers for Medicare & Medicaid Services’ five-star ratings of nursing homes and the use of quality measures, including one reflecting a reduction in the off-label use of antipsychotic medications to treat those with dementia, as ways that the Medicare and Medicaid programs have “driven us to be better and…provided some level of focus on how to be better.”

Echoing Minnix, Porter says that the future will require different approaches to providing for elders—and he favors collaboration as a means to arrive at solutions. “While the last 50 years are important, the next 50 are more important,” he says. “I can’t underscore more the point that everyone wins when we collaborate. When we work together—advocacy groups, provider groups and the government—we can get great things done for our patients.”