the differences between Medicare and Medicaid

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Medicaid and Medicare

Medicare-Medicaid is a system of national health insurance . It is a singularly limited and badly designed version . It dealt with two of the most important categories of need , the elderly and the indigent . But the two programs were very different . Medicare grew out of a tradition and philosophy of social insurance . Payroll taxes were contributed to Trust Funds , and there was a strong sense of entitlement to the same medical care that anyone else got . Medicaid , by contrast , built on

a public assistance mode . People had to establish "eligibility " and they often got welfare medicine . From the beginning , then , the American version of "national health insurance " established as policy and law a two-tiered system of mainstream medicine and care for the poor . Aside from the issue of fairness or equity , this difference has divided energies devoted to reform between advocacy of a universal scheme of health insurance and pursuing Medicare or Medicaid only strategies . And because Medicaid was chronically underfunded and still covered a minority of the poor , many went without health care or the costs for ensated care were shifted to Medicare providers , insurance companies , or other payers (Burney Ira , and George Schieber , 1985

Medicare itself was divided between Part A and Part B , establishing the hospital and physician benefits , respectively . This dualism helped gain provider support and eased the pinch for beneficiaries , especially by limiting the liability for expensive hospital stays . But it built in two different forms of payment : cost reimbursement for hospitals and payment of charges for physicians . As a result of this difference in payment method , Medicare created incentives to over utilize hospital care and underutilize less expensive physician 's services . And it made difficult to achieve some measures , such as capitation , that might encourage efficient combination of resources or substitution of less costly modalities of care

Important feature of the original Medicare-Medicaid legislation was the way in which it approached cost containment--which was to put much of the burden on beneficiaries rather than providers . Medicare provided for reimbursement of the hospitals "reasonable costs " and for the payment of physicians "reasonable charges " language that would appear to contemplate stringent cost containment measures . But the statute also specified that claims processing would be handled by the traditional "carriers " and "fiscal intermediaries " i .e , pretty much the private insurance agencies that the providers had dealt with before Medicare Moreover , many of the early administrative decisions implementing Medicare were permissive and conceded much in terms of accounting practices and allowances on claims . At the same time , the legislation came down rather heavily on the beneficiary and the demand side Medicaid , like the earlier Kerr-Mills program , continued to be a grant-in-aid program in which the states paid up to half of the costs , sometimes severely taxing the resources of the poorer ones and leading them to raise eligibility standards and cut funds for care Medicare had numerous exclusions , deductibles , and co-pays intended to limit utilization . Physicians (though not hospitals ) could...