Medicare and Medicaid, Who Pays For It?
Medicare is the national health plan that most people upon turning 65 years old, will qualify for it. It consists of parts A, B, C, and D. You will have worked 40 quarters in your lifetime in order to obtain it. Others below age 65 will qualify due to a Federal definition of disabled and then after 24 months after the declaration.
Medicaid is simply welfare for poor folks who fall below a certain income level. It is administered by the state in which you live and the minimum income requirements vary by such. It pays the balance of what Medicare does not.
Ideally, Medicare was set up in a trust fund, like Social Security and the anticipated result was that the money would stay there until you turned 65 and the interest as well as the principle would pay for your health care. Unfortunately, the current beneficiaries medical claims under the program are being paid for by the taxes being deducted by the current workforce. The money that was held in trust was simply spent for whatever the Congress decided to pay for other stuff. Why Medicare and Medicaid are going broke is this: You can not sustain the money being paid for claims when the workforce is declining and the beneficiary rolls are increasing. Think of it this way: Not enough people are working, having the tax deducted and the baby-boomer population is increasing at the rate of someone turning 65 every nine seconds, getting on Medicare and going to the hospital. One decreases, the other increases.
As far as Medicaid is concerned, you have even more of the 65 year old population being poorer due to the economy meltdown and when someone is poorer, they get sicker. So even more stress is put on the state's budgets to pay that portion of what Medicare did not cover. No wonder the state's are going broke as well as the Federal government program!
What the focus of the solution should be is that more jobs need to be created so more people are paying into the system to accommodate the increasing turning 65 population. Also, the emergency room should stop being used as a doctors office. People go there when they get sick, because they know that they will not be denied medical care and therefore the social workers at the hospital have the people enroll in Medicaid so the hospital can try and recover some of the costs from the state.
Solutions can not happen overnight, but the turning 65 baby boomers start in 2010 and continue a aggressive increase for the next 10 years. We have to be prepared for that, otherwise Medicare will definitely go broke.