Power And Politics Research Essay
Brief overview of Medicaid and Medicare. 2
Is it preferable to have private insurance instead of Medicare and Medicaid? A review of literature and policy analysis 3
Power And Politics Research Essay
Healthcare has always been a fundamental pillar for any nation. It goes without saying that it has a bearing on a nation’s overall productivity and economy, especially considering that only healthy individuals can work. This should explain why many companies have been focusing their energies on ensuring that the framework of healthcare institutions is efficient and effective to avert any instance that would derail their economies. As a proportion of its economy, Canada spends a considerable proportion of its resources on healthcare. While the government has made every effort to maintain a low cost of health, Canada’s expenditure takes up about 11% of its Gross National Product (GNP) (or $4,196 per capita) which is still quite high considering that the first one (United States) uses 13% of its GDP (NCPA, 2012). In essence, it comes as no surprise that the mortality rates have reduced tremendously in the recent times going by the high levels of expenditure. In addition, the life expectancy has gone up for Canadians to reach 75 years of age, which is an all time high. Despite the overall incredible assessment, the needs of Canadians have been less than uniformly met as far as healthcare is concerned. This is especially as concerning health care insurance and Medicaid. Research shows that close to 20 percent of Canadians do not have health insurance. Questions have been raised as to the efficacy of Medicaid and Medicare in ensuring that every Canadian has access to healthcare. In fact, there have been proposals that private insurance would be more preferable for Canada than Medicare and Medicaid. However, it is imperative that one examines the differences between Medicaid and private insurance on a variety of platforms and determines which one would be more appropriate. Examination of the various aspects of Medicaid and Medicare would reveal that they are better than private insurance as far as safeguarding the health of the nation is concerned.
Nearly 11 percent of Canada’s gross domestic product (GDP), or $4,196 per capita, goes toward health care costs.
Brief overview of Medicaid and Medicare
Medicaid refers to the health program that targets certain families and individuals with low resources and incomes. Individuals who are under Medicaid’s services have to be Canadian citizens or even legal, permanent residents who include low income adults and their children, as well as individuals who have certain disabilities. It is worth noting that poverty alone would not necessarily quality an individual for Medicaid. This program is the largest funding source for health and medical-related services for individuals whose income is limited or low in Canada.
Medicare, on the other hand, refers to a national social insurance program administered by the federal government and serves as a guarantee that Canadians aged 65 years or more and younger individuals who have disabilities or even individuals who have end-stage renal disease can access health insurance. Medicare, in essence, widens the financial risk that comes with illness across the society so that everyone may be protected. This means that Medicare’s social role is somewhat different from that of private insurers, who manage the portfolio of their risk through fiddling with their pricing in line with the perceived risk. Private insurers have to ensure that they manage their pool of risk in such a manner that guarantees that the premiums are lower than the costs. In essence, Medicare is a system by which states take a part of their citizens’ resources to safeguard financial security and health to its citizens in old age or even in case the citizens become disabled, thereby assisting them in coping with the colossal and unpredictable health care cost (Cohen & Rousseau, 2007).
Is it preferable to have private insurance instead of Medicare and Medicaid? A review of literature and policy analysis
While the purpose of these two programs is evidently noble, it is imperative that their utility be compared with that of private health insurance.
First, research has shown that Medicare and Medicaid have better coverage compared to private insurance. Research shows the beneficiaries of Medicare have a higher likelihood of being in poor health and with low incomes than privately insured individuals. In this survey, more than 66% of individuals under 65 years of age with private health insurance were rated as being in excellent health as compared to 40 percent of elderly Medicare beneficiaries. The research showed that, the percentage of elderly Medicare beneficiaries who classify their health status as poor or fair was three times higher than the percentage of privately insured individuals in the same category. 4 out of 5 Medicare beneficiaries had an unrelenting or chronic condition as compared to only a third of the privately insured individuals. The same case applies to the incomes of the beneficiaries, which shows that Medicare beneficiaries had a higher likelihood of having incomes lower than 200 percent of the poverty level. Four out of five privately insured individuals were either in full or part time employment, as compared to 10 percent of Medicare beneficiaries. This underlines the fact that Medicare has more extensive coverage among the low income earners than private insurance, which means that it would essentially be more suitable for them.
In addition, it is imperative that one compares the satisfaction, cost experience and accessibility between the two categories. There are variations as to the access to and levels of satisfaction with health care, as well as cost experiences of healthcare by the source of coverage. However, studies have shown that elderly Medicare beneficiaries had a higher likelihood of rating their healthcare insurance as outstanding or excellent and had a lower likelihood of encountering negative experiences with the insurance as compared to the privately insured (Cohen & Rousseau, 2007). In addition, elderly Medicare beneficiaries had more confidence as to their future ability to obtain care than privately insured individuals. Despite the fact that they had lower incomes and poorer health than the privately insured, elderly Medicare beneficiaries had a lower likelihood of reporting access problems that resulted from costs. These may include not getting the necessary specialist care or even having any medical problem yet failing to visit a clinic or medical practitioner. In addition, they had less likelihood of having problems in paying their medical bills such as being contracted by the collection agencies or even having to alter their way of life so as to pay their medical bills. The difference observed in the healthcare experiences between privately insured and Medicare beneficiaries are not only a reflection of the underlying differences in income and health status, but also the absence or presence of certain benefits. These underline the fact that Medicare beneficiaries were relatively more satisfied than their private insurance counterparts (Cohen & Rousseau, 2007).
On the same note, the cost of Medicare and Medicaid is extremely low as compared to private insurance. Research shows that Medicare beneficiaries have a lower likelihood of going without the necessary care than individuals with private costs as a result of cost (18% vs. 22%). In addition, 37% of working adults who had adult-sponsored coverage had a minimum of one access problem thanks to cost as compared to 23% of elderly adults who have Medicare. This could offer an explanation as to why Medicare and Medicaid have more extensive coverage than private insurance and even employer-sponsored insurance programs.
Another yardstick for comparing Medicare and Medicaid with private insurance programs is the quality of care that the elderly access. Research shows that more elderly Medicare beneficiaries would report their satisfaction with the care than those who have employer coverage (Cohen & Rousseau, 2007). In addition, they had a higher likelihood of rating their healthcare practitioners as excellent, as well as be extremely confident in their capacity to obtain care in the future than employer-insured or privately-insured individuals. Medicare and Medicare beneficiaries, in general, have extremely stable coverage. As much as there is a similarity in the fact that most of the Medicare beneficiaries and privately-insured individuals had been continuously insured, it is worth noting that employers often modify the plans that are available to the employees in the course of annual enrolment periods. Modification of plans often implies that an individual has to change physician, especially in the case of privately insured under the age of 65, who have a higher likelihood of being enrolled in managed care plans than Medicare beneficiaries. Instability that comes with private insurance or employer-supported insurance may result in disruptions, in the continuity of care.
Moreover, Medicare and Medicaid may be evaluated against private insurance on the basis of financial problems and access to care. Reports pertaining to bill problems and access, after controlling for income and health status, underline the fact that Medicare and Medicaid successfully fulfill the two fundamental purposes or objectives of health insurance. It ensures that people have access to the necessary health care services for the beneficiaries (Cohen & Rousseau, 2007). In addition, it prevents the occurrence of financial burdens that emanate from medical expenses. Elderly Medicare beneficiaries have been shown less likely than individuals under employer coverage to undergo problems with access thanks to cost, health status, income and even drug coverage. Access problems mainly included not obtaining the necessary specialist care, having medical problems yet not visiting a clinic or healthcare professional, or even skipping recommended follow-up care and tests thanks to cost. As expected, individuals in poor health and with low incomes or devoid of prescription drug coverage have more problems accessing healthcare than others. However, the fundamental finding is that Medicare offers better coverage against financial hardships compared to employer coverage after controlling for health status and income (McGregor & Brophy, 2005). Elderly Medicare beneficiaries have been shown as having less likelihood of reporting medical problems than individuals with the employer or private insurance coverage. Studies have also shown that elderly Medicare beneficiaries have less likelihood of incurring substantial out-of-pocket costs (above $500), than their private insurance and employer insurance counterparts (McGregor & Brophy, 2005).
In addition, research has shown that private insurance is significantly less efficient compared than Medicare. Medicare has been shown to control costs in a better way than private insurance (Bryan, 2004). Research shows that Medicare’s spending for common benefits increased by an average of 4.3% every year between ’97 and ‘09. This is way lower than private insurance whose premiums increased at an average, annual rate of 6.5%. National academy for Social insurance calculates that if Medicare rose by the same rate as the premiums of private insurance, it would have cost an extra $114 billion, which is $31.7%. Statistics predict that the increasing cost of private insurance will persist in outstripping Medicare for at least the next three decades. It has stated that the private insurance equivalent of Medicare will cost close to 40% more in one decade from now for typical 65-year-olds. In essence, it would only be rational to remain and strengthen the institution whose infrastructure allows for cutting of spending and minimizes inflationary forces for its premiums (Cohen & Rousseau, 2007).
In addition, Medicare has been shown to incorporate lower administrative costs than private plans. Medicare’s administrative costs comprise of only 2% of its operating expenditure (Potetz, et al, 2011). This is way lower than the 17% than administrative costs take up in the private industry. In fact, studies funded by the private insurances have been excluding profits and marketing costs of private plans in their calculation of their administrative costs (Cohen & Rousseau, 2007). Even in such cases, Medicare’s overheads are considerably lower than that of private insurance (Potetz, et al, 2011). It is worth noting that the administrative cost figures of Medicare incorporate the collection charges for Medicare taxes, abuse control, fraud, as well as building costs (Cohen & Rousseau, 2007). This underlines the fact that Medicare is way better than private insurance as far as their administrative costs are concerned, which means that it would be considerably irrational to eliminate it for private insurance (Cohen & Rousseau, 2007).
The cost of healthcare is, however, tightly controlled to such an extent that healthcare services that are publicly funded have not had their spending aligned to the population growth. Medicare became a national program in 1971 in Canada from which time the proportion of Canada’s gross national product that has been spent on Medicare has gone up from 7 ½ percent to about 9 percent. When discussing the cost of healthcare, it is worth noting that the public sector only accounts for about 72% of the total expenditure on healthcare in Canada, which is lower than the 80 percent common in OECD nations (McGregor & Brophy, 2005).
Most people have outlined the importance of incorporating private insurers so as to increase efficiency in the provision of healthcare insurance. However, it is worth noting that insurance providers, in most local markets, have monopolistic powers. In essence, private insurers do not have bargaining power as far as containing prices is concerned. In fact, this competition has been blamed for driving costs up (Skinner, 2006). In most areas, there exist two or three dominant insurers who dominate regional markets, and limit competition, thereby making it extremely difficult or even impossible for other insurers to get into the market and trigger competition (McGregor & Brophy, 2005). Scholars admit that private plans do not have the capacity to bargain the costs of providers, in which case their costs will always be higher than Medicare (Skinner, 2006). In essence, Medicare and Medicare are the only ones that have the capacity to keep the costs of healthcare insurance, in which case it would be improper to eliminate it for private insurance.
Lastly, Medicare and Medicaid are publicly accountable, which is not the case for private plans. Medicare allows people to examine what is effective and what would not work. According to Hardaway (2012), Medicare is considerably rigid as outcomes have to be reported. However, there is scarce publicly available data on how much money private plans incur in delivering care or the individual insurer innovation known to deliver value (Evans, 2003). Information pertaining to innovations that may lower the cost of care has mainly been provided by clinics and doctors rather than insurers (Skinner, 2006). The treatment of claims data by insurance companies as trade secrets makes it hard to determine whether they have incorporated these innovations. The bargaining power and public accountability of Medicare and Medicaid give them the capacity to drive the system change and control the skyrocketing costs of healthcare. Private insurers, being profit driven, have provided no solution on the matter. This underlines the fact that Medicare and Medicaid are better than private insurers as far as accountability and handling the skyrocketing cost of private insurance.
Proponents of private insurance point out that the costs of Medicare have increased by 400% since 1971, which is quite scary (Dugan, 2011). Its net increase from 1993 to 2005 was 65 percent (NCPA, 2012). However, it is worth noting that premiums on private health insurance have increased by 700% within the same period, which should be twice as scary (Dugan, 2011). In addition, private health insurance has been known to be unavailable to some people, simply because the insurance companies aim at making profits while reducing their costs. In essence, this means that the people so denied of insurance would have to do without coverage, which works against the essence of healthcare insurance.
In conclusion, Medicare and Medicaid have been fundamental pillars as far as the provision of health care in the Canadians is concerned. There have been questions as to whether it is preferable to eliminate these programs and substitute them with private insurance. This would not be appropriate as Medicare and Medicaid are way better than private insurance in various fronts. First, it is worth noting that they score highly as far as quality of care is concerned. In addition, these two score highly as far as keeping cost down is concerned, not to mention that it is publicly accountable, which implies that it would be considerably easy to determine whether it is applying cost-lowering innovations. Moreover, Medicare is way more efficient in the provision of healthcare services, as well as keeping its administrative costs low. These factors underline the essence of keeping Medicare and Medicaid rather than eliminating it for private insurance companies.
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