Questions about health care reform and the health care system are among the most common questions asked at medical school interviews. These topics are incredibly confusing, both because of the system is bewilderingly complex and because of the flux created by health care reform. However, there are a few concepts that every medical school interviewee must be familiar with and able to speak intelligently about. I will go through the basics of the health care system in this post and health care reform in a separate post.
Medicare vs. Medicaid — All you really need to know!
You should have basic knowledge of the two largest government-sponsored heath care programs, which are Medicare and Medicaid. It is not uncommon to be asked to explain the difference between the two or to be asked what challenges each are facing.
Medicare: Medicare is a federally-sponsored health insurance program that pays for care for the elderly and certain groups of disabled people (the most important being dialysis patients). Medicare is broken into Parts A-D, however you do not need to understand the particulars of each (basically, each part pays for a different service). Medicare is the single largest health care payer in the U.S. and will continue to grow in size as the population ages and more people become eligible for Medicare benefits. Medicare pays predetermined rates for each service provided to a given Medicare beneficiary. This rate is typically slightly below what health care providers (physicians and hospitals) calculate it costs them to provide the services rendered. Thus, many providers believe that they lose money by serving Medicare patients. The rate paid by Medicare is almost always lower than what is paid by private insurers (if a certain service is calculated to cost $100 to provide, Medicare may pay $98 for it, though private insurers may pay $120). Thus, providers depend on private insurance to make up for an losses on Medicare and to earn a profit. Not surprisingly, some physicians no longer accept Medicare, decreasing patient access to these providers.
Key points: Medicare: federally funded, insurance for the elderly, growing rapidly with aging population.
Medicaid: Medicaid is an insurance program for low-income individuals. Each state sets up and manages its own Medicaid program, so the eligibility requirements and services covered vary from state to state. Thus, it is difficult to make generalizations about Medicaid due to state-to-state variability. However, nearly all Medicaid programs are underfunded, worsened recently by high levels of unemployment and massive state budget deficits. As a result, Medicaid patients generally have significantly more restricted benefits than those covered by private insurance or Medicare. Moreover, reimbursement is much lower than both Medicare and private insurance. Thus, many providers no longer accept Medicaid, creating widespread access problems and frustration for Medicaid recipients.
Key points: Medicaid: state funded, insurance for the poor, growth due to high unemployment, access issues.
Summary: If you understand the differences between Medicare and Medicaid, you will be prepared for the majority of health care system questions that you could be asked. Please see my post on health care reform for more essential information you need to know before your interviews.