Programs That Offer Medical Care Coverage
There are a number of programs that offer medical care coverage to eligible individuals. Health insurance protects individuals from the risk of financial hardship when they need medical care, and uninsured individuals may refrain from seeking necessary care because of the cost. The Patient Protection and Affordable Care Act included a number of provisions that changed private health insurance requirements, and these changes affect the availability and cost of health insurance that individuals purchase directly.
Medicare, Medicaid, and employer-sponsored or individual health care plans can all play a role in financing health care in retirement. Many older Americans will also have additional long term care needs. We discuss the role these programs play and why Medicare and Medicaid are High Risk programs.
Medicare and Medicaid's Role in Retirees' Access to Health Care
Many older Americans rely on Medicare to help them control their health care costs. This program is particularly crucial because retirees generally require more care and have less disposable income to spend on it. Medicare is a federal program that provides health care coverage for individuals at all income levels. (Medicaid is an income-based program.) We designated Medicare as a High Risk program because its complexity and susceptibility to improper payments, in addition to its size, have led to serious management challenges. Addressing these challenges requires improvements to payment methods, program management, and program safeguards. Learn more about the challenges facing Medicare.
Medicaid also plays an important role in providing health care coverage low-income individuals and individuals who are aged or disabled. Medicaid is one of the largest sources of funding for acute health care, long-term care, and other services for low-income and medically needy populations. The program is jointly financed by the federal government and the states. The size, growth, and diversity of the Medicaid program presents oversight challenges. We designated Medicaid as a High Risk program due to concerns about the adequacy of fiscal oversight. Medicaid is the largest health program as measured by enrollment and the second largest as measured by expenditures, second only to Medicare. Learn more about the challenges facing Medicaid.
Other Health Care Plans for Retirees
Many U.S. workers and retirees rely on employer-sponsored health care benefits from as either their primary source of coverage or as a supplement to their Medicare coverage. Many workers have relied on employer-sponsored health benefits until they became eligible for Medicare or to pay for out-of-pocket expenses not covered by Medicare. Retirees without employer-sponsored health coverage and not eligible for Medicaid may seek to purchase health insurance directly as individuals, including through Marketplaces established by the PPACA, or purchase Medicare supplemental insurance commonly known as "Medigap."
We’ve reported that the number of employers offering health benefits to retirees has declined considerably. Many employers that offer health benefits have required workers and retirees to pay a higher share of out-of-pocket costs and some have recently introduced consumer-directed health plans, which trade lower premiums for significantly higher deductibles.
Medicaid provides long-term care to states' most vulnerable populations, such as the elderly or disabled. We've reported that on average, community-based care costs less than at a nursing facility or other institution—and many people prefer it.
States are increasingly paying for long-term care through managed care programs, paying based on set, monthly rates. How states structure these rates—aligning incentives to minimize cost and maximize service—is critical to enhancing community-based care.
On the federal side, we recommended better oversight of the data used to set payment rates, as well as the rates' effect on care and other outcomes.
We have also reported on the need for better information on the long-term care workforce. Our podcast covers the types of services these workers provide like help with daily activities such as eating and bathing.
GAO’s Key Reports on Health Care Affordability for Retirees
GAO-17-169: Published: Jan 12, 2017. Publicly Released: Feb 13, 2017.
Millions of Medicaid beneficiaries rely on personal care services for help with daily tasks like bathing and eating. However, these types of services are at high risk for fraud and abuse—e.g., services that were paid for but never provided. We found that the Centers for Medicare & Medicaid Services needs better data to oversee these personal care services. In 2012, for example, $4.9 billion wor...
GAO-16-726: Published: Aug 10, 2016. Publicly Released: Sep 9, 2016.
Through review of its prior reports, the literature and interviews with state Medicaid officials and subject matter experts, GAO identified several key interrelated policy considerations that could be useful should policymakers elect to pursue a per capita cap—a per-enrollee limit on federal Medicaid funding for states.Coverage and flexibility. Coverage entails decisions about whether all or a s...
GAO-15-677: Published: Jul 30, 2015. Publicly Released: Jul 30, 2015.
GAO identified four key issues facing the Medicaid program, based on prior work.Access to care : Medicaid enrollees report access to care that is generally comparable to that of privately insured individuals and better than that of uninsured individuals, but may have greater health care needs and greater difficulty accessing specialty and dental care.Transparency and oversight : The lack of comple...
GAO-14-311: Published: Apr 23, 2014. Publicly Released: May 27, 2014.
Several work-related factors may cause people to claim Social Security benefits early and suggest they may face challenges in continuing to work at older ages. For example, those who worked in physically-demanding blue collar jobs were 55 percent more likely to claim benefits prior to their full retirement age compared to those in all other occupations after controlling for other factors (see figu...
GAO-14-176: Published: Feb 19, 2014. Publicly Released: Feb 19, 2014.
In fiscal year 2009, states spent nearly a third (31.6 percent) of all Medicaid expenditures on the most expensive Medicaid-only beneficiaries, who were 4.3 percent of total Medicaid beneficiaries. States spent another third (33.1 percent) on all other Medicaid-only beneficiaries, who represented 81.2 percent of total Medicaid beneficiaries. Among dual eligible beneficiaries, a similar pattern exi...