Checking Up on Medicare and Medicaid at 50

Today Medicare and Medicaid turn 50. These landmark programs are the largest sources of health care coverage for millions of older, low-income, and medically needy Americans. Medicare helps provide health care coverage for 54 million aged and disabled individuals, and Medicaid helps an estimate 65 million people with low-incomes.

These programs are also big factors in the federal budget. In fiscal year 2014, the federal government spent over $916 billion providing care to beneficiaries. States, which share Medicaid costs with the federal government, spent an additional $204 billion on the program.

So at 50, how are these programs holding up? Both remain on our High Risk list.  However, we have diagnosed a few issues that, with the proper care, could help improve their prognosis.

Medicare enrollment booming with the Boomers

Medicare was enacted in response to concerns about the lack of health insurance among America’s seniors. Over the past half century, Medicare expenditures have accounted for a growing share of total federal spending. Today, with the aging of the baby boomers, expenditures are projected to rise at a faster pace and, unless additional changes are made, will put an increasing strain on both the federal budget and Medicare beneficiaries.

In order for Medicare to continue to encourage the efficient delivery of high quality health care, while ensuring access, our body of work has shown that continued attention is needed on payments, program management, and program integrity.

Read more on our Medicare Key Issues pages.

Medicaid: Perfecting the partnership

Medicaid’s performance is driven in large part by how well the federal government and states work together to administer the program. Listen to Carolyn L. Yocom, a director in our Health Care team, discuss challenges facing Medicaid on its 50th anniversary.

Over the past decade, we’ve made more than 80 recommendations to improve Medicaid, focusing on a few core issues:

• Access—Medicaid beneficiaries report that access to care is generally comparable to private insurance, but they may have trouble accessing dental and specialty care, such as mental health services.
• Oversight—The lack of reliable data on provider payments and states’ Medicaid financing hinders oversight, and the federal process for approving state demonstration programs needs improvement.
• Integrity—Medicaid’s size and diversity make it vulnerable to improper payments, which totaled some $17.5 billion in fiscal year 2014.
• Funding—Automatic temporary increases in federal assistance to states during economic downturns and more equitable allocations accounting for states' ability to fund Medicaid could better align federal funding with states' needs.

(Excerpted from GAO-15-677)

For more, check out our latest report on these key issues and our Medicaid Key Issues  pages.

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