Medicare and Medicaid
The healthcare sector leans heavily on both Medicare and Medicaid. These two terms can easily be confused with one another, but there are key differences that organizations should be aware of. Medicare and Medicaid are two of the biggest programs that the United States government pays for with taxpayer money, since they are some of the biggest payers of healthcare bills. They’re the government’s answers to some of the biggest healthcare issues in this nation, and they’ve existed for decades. They’re also huge programs that impact other elements of healthcare finance.
Medicare is one of the largest government programs in the United States, comparable in spending to public education and Social Security. It provides subsidized healthcare to senior citizens (individuals over the age of 65) who no longer have coverage due to retirement or ineligibility for other programs. In some special cases, like becoming disabled prior to retirement age, an individual may be able to draw upon Medicare for medical expenses earlier than the age of 65.
Medicaid works similarly to Medicare and is the third largest domestic government program in the United States (accounting for $577 billion in FY 2017), though it’s only for individuals under the age of 65. It usually covers the low-income populations of the United States, individuals with disabilities or chronic illness, individuals who are unemployed, pregnant women, children (through CHIP, the Children’s Health Insurance Program), and several other categories of people. If your healthcare organization treats individuals who fit within these categories, it may be entitled to financial compensation from the government. This process, however, can often be long and challenging.
Affordable Care Act
Usually known as the ACA or Obamacare, the Affordable Care Act is a massive healthcare bill that was passed into law during the presidency of Barack Obama. It expanded government spending and regulations to accommodate the increasing need for financial assistance in the American healthcare system. As controversial as this law has been, and though it has changed much since most of its major provisions went into effect in 2014, it has become a mainstay of the healthcare revenue system. It has allowed the expansion of Medicare and Medicaid provision to those in the “coverage gap” (the population that has been unable to afford healthcare due to ineligibility). However, both of these programs are still largely determined and regulated by individual state mandates.
The Healthcare Marketplace
The ACA also established the Healthcare Marketplace, a hub where individuals can sign up for private healthcare plans outside of Medicaid/Medicare or employer-provided healthcare programs. These insurance plans may be eligible for subsidization by the federal government depending on a patient’s financial status.
Federal Poverty Level
The Federal Poverty Level (FPL) is a metric that the ACA uses to determine eligibility for Medicaid provision. The current standard in any state that has fully implemented the regulations of the ACA is that most people whose income is less than 138 percent of the FPL can be eligible for Medicaid. The FPL currently sits at about $26,500 annually for a family of four in 2021.
One of the most hotly debated topics within the sphere of the ACA is work requirements. If a state has implemented work requirements as a part of being eligible for Medicaid, it means that nonexempt recipients must be able to show that they have worked for a set number of hours per week, through a job, education, volunteer work or other form of community investment. This regulation, which some states uphold and others do not, is a way to encourage people to find work that will provide them with private insurance plans and allow them to stop using Medicaid.