On the 50th anniversary of Medicare and Medicaid this July 30, private health insurance payers continue to play a large role in their continuation, according to a New York Times article.
Here are seven things to know about the role of private payers in Medicare and Medicaid.
1. Wilbur J. Cohen and Robert M. Ball, two of the designers of Medicare and Medicaid, believed older and low-income Americans could not afford or obtain coverage from private payers. "Quite frankly, there's no longer any room for the private insurance companies to sell insurance policies for people over 65," Mr. Cohen told President Johnson in 1965.
2. Originally, Medicare and Medicaid beneficiaries could go to any doctor and the government would pay providers on a fee-for-service basis.
3. In the early 1980s, Congress and the Reagan administration formed financial incentives for private payers to contract with Medicare. Reimbursement rates changed over the years, causing enrollment to increase and decrease.
4. Enrollment in private Medicare plans, called Medicare Advantage, greatly increased since 2005. Today approximately 99 percent of beneficiaries have the option to enroll in a Medicare Advantage plan.
5. Under the Affordable Care Act, Congress reduced payments to private Medicare Advantage plans. Because of this, insurers forecasted declining enrollment. However, enrollment has increased to 16.6 million this year, up from 11 million in 2010.
6. Through the ACA, over half of all states expanded eligibility for Medicaid. Most new beneficiaries are enrolled in private plans.
7. Today over 30 percent of the 55 million Medicare beneficiaries and over half of the 66 million Medicaid beneficiaries are covered by private healthcare plans by payers including Anthem and Humana.