MARKET RESEARCH AND SEGMENTATION (SLP)

The cost of health care affects the economy, the federal budget, and virtually every American family’s financial well-being. When health insurance is available, adults are able to be more productive at work, children can readily excel at school, and Americans of all walks of life can live longer and healthier lives. The Affordable Care Act, then, as the most important health care legislation enacted in the United States since Medicare and Medicaid were created in 1965, aimed to improve accessibility, affordability, and quality of health care, particularly at a time when tens of millions of Americans were uninsured and health costs had risen rapidly for decades (Obama, 2016). This paper looks at the issues and challenges with the Medicare and Medicaid programs, as well as their impact on health care delivery, and argues that certain steps may be taken to transform the health industry for the better.

Medicare provides health insurance coverage for elderly people who, left on their own, would likely be left without care or get impoverished by out-of-pockets costs. But Medicare’s fee-for-service model has made it that the cost of treating each individual beneficiary grows faster than the nation’s gross domestic product. This model incentives physicians and facilities to do anything that may be justified as beneficial for each patient before saddling the U.S. taxpayer with a bill every time. As cost overflows, the quality suffers (Cotton et al., 2016).

To resolve this issue, an integrated delivery system or a capitated prepayment model may be adopted so that an insurance company with its doctors and facilities contracts to provide whatever services a Medicare enrollee requires for their conditions. Since individual services would not be billed, there would be little incentive to load on additional services that have little value to the patient (Cotton et al., 2016).

Another challenge that Medicare has faced has to do with offering effective information and assistance to consumers so that they are enabled to make good decisions that help them better protect their interests. As older people lack this needed information and assistance, they get worse health outcomes, skip preventive care, mismanage chronic conditions, and end up spending more time hospitalized (Minarik, 2013).

As such, Medicare should develop standard consumer communication templates that balance the information they give to people and providers. As Medicare puts new models into place, it should also customize scripts that are model-specific for its hotline so that callers can access and understand the appropriate information (Minarik, 2013).

Medicaid, on its part, is the nation’s largest health insurance program by beneficiaries which provides health insurance for the very poor and whose costs are shared between the federal government and state governments. But while about 75 percent of Medicaid recipients are either children or young adults, they account for a third of costs while the elderly and disabled, who make up the other 25 percent of recipients, represent two-thirds of costs. While Medicaid’s contribution to providing insurance for those in the low-income cadres of the economy cannot be gainsaid, pressure on states is escalating as costs for care compete with services such as schools, sanitation, police, and roads so much that they have gone up to nearly one-fifth of states’ general revenues (Geraghty, 2016).

Instead of having these other vital amenities scrapping by the little they can get, a solution where Medicaid’s long-term care is transferred to the federal government ought to be mooted. The federal government would likely need to merge these costs with Medicare while the states would assume the Medicaid costs for children and younger adults and give up some or all their federal aid for K-12 schools and other federal grants – as necessary. Such a move would ensure that the state and local levels were able to have oversight for the young while leaving the federal level to aid the elderly and disabled. It would ensure that states were able to control schools and child-centered Medicaid so that they would be able to fight child poverty without having to be weighed down by the rising cost of long-term care (Geraghty, 2016).

The other challenge that Medicaid presents with is the issue of unstable eligibility and enrollment. Though coverage opportunities were expanded by the Affordable Care Act, eligibility for both Medicaid and the tax subsidies that are offered through the ACA’s insurance marketplaces are still closely tied to family income. The risk of breakage in insurance, therefore, remains because income fluctuations are more likely to be experienced by those in the low-income cadres (Rosenbaum, 2016).

To forestall such an occurrence, states need to expand Medicaid eligibility and emphasize on making health plans participate in both the Medicaid managed care market and the qualified health plan marketplace. Such a move would help people remain enrolled in their plans, even as the health systems struggle to deal with the issue of underfunding that they must so often contend with, especially in the face of the reality that services such as Medicaid can extend beyond the health plans’ contracts. By contrast, coverage in private insurance equals the benefits listed in the policy (Rosenbaum, 2016).

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