Health Services
Medicare and Medicaid
The federal government supports a number of health services for the poor, including services for war veterans, Native Americans, women and children.34 It also supports a national network of community health centers, meant to supplement the services of private physicians, particularly in low-income communities. Medicare? and Medicaid?, however, are the two major public health care programs in the United States. Established during the Johnson Administration? and the “Great Society?,” both programs are “in-kind” services, meaning no cash support is given directly to the individual.35
Medicare covers most hospital and medical costs for people aged 65 and over as well as for those on social security disability.36 Medicare is provided without regard to the individual’s income. Social security recipients, railroad retirees, federal and state government employees, in addition to some people with kidney disease or a permanent disability are eligible for Medicare. Medicare is the second largest domestic program, second only to the social security program. In 1996, Medicare benefits totaled $186 billion. The program is funded by a payroll tax paid by employers and employees.
Medicare covers most hospital and medical costs for people aged 65 and over as well as for those on social security disability.36 Medicare is provided without regard to the individual’s income. Social security recipients, railroad retirees, federal and state government employees, in addition to some people with kidney disease or a permanent disability are eligible for Medicare. Medicare is the second largest domestic program, second only to the social security program. In 1996, Medicare benefits totaled $186 billion. The program is funded by a payroll tax paid by employers and employees.
There are two parts to the Medicare program: Part A and Part B. Part A is basic hospital insurance. It covers most costs of hospitalization, post-hospital extended care, and home health services. Part B is an optional supplementary medical insurance. It assists in covering the costs of physicians’ fees, diagnostic tests, medical supplies, and prescription drugs.
The second major public health program, Medicaid, is basically a federal grant to states.37 Medicaid helps to finance health care for the poor. About 74% of Medicaid recipients are on public assistance. In 1996, the federal government paid 57% of the total costs of Medicaid, while the states funded the remaining portion. In 1996, the federal government’s budget for Medicaid was $86 billion. Federal regulations specify the basic health services that must be offered under Medicaid. Yet, services are primarily administered by individual states including decisions regarding the duration of services and optional services. Medicaid is a “vendor system.” That is, payments are made directly to the service provider. Most recipients of Medicaid are TANF families. However, the most Medicaid dollars go to people who are blind or have other disabilities. Furthermore, most Medicaid spending on older Americans is for nursing home care.
