Medicaid and Medicare under Health Law
1. Overview of Medicaid and Medicare
Both Medicaid and Medicare are government-run healthcare programs established by the Social Security Amendments of 1965, codified under the Social Security Act (SSA).
Medicare: A federal health insurance program primarily for people aged 65 or older, and certain younger people with disabilities or end-stage renal disease.
Medicaid: A state-administered program (jointly funded by state and federal governments) that provides medical assistance to low-income individuals and families.
2. Statutory Framework
Medicare – Title XVIII of the SSA (42 U.S.C. §§ 1395 et seq.)
Administered by the Centers for Medicare & Medicaid Services (CMS).
Four parts:
Part A: Hospital Insurance
Part B: Medical Insurance
Part C: Medicare Advantage (managed care)
Part D: Prescription Drug Coverage
Medicaid – Title XIX of the SSA (42 U.S.C. §§ 1396 et seq.)
Provides grants to states to operate health care programs for eligible individuals.
States must meet federal minimum standards, but have discretion over:
Eligibility criteria
Scope of services
Payment methodologies
3. Key Differences
| Feature | Medicare | Medicaid |
|---|---|---|
| Who is covered? | Mostly seniors (65+) and disabled individuals | Low-income individuals and families |
| Funding | Entirely federal | Jointly federal and state |
| Administration | Federal (CMS) | State-run under federal guidelines |
| Entitlement? | Yes | Yes, but states can limit services |
| Cost to patient | Premiums, deductibles, co-pays | Minimal to none, depending on income |
4. Constitutional and Legal Basis
The Spending Clause (Art. I, Sec. 8, Cl. 1 of the U.S. Constitution) gives Congress authority to fund such programs. These programs must be voluntary for the states, but tied to conditions for receiving federal funds.
5. Key Case Law
A. National Federation of Independent Business v. Sebelius (NFIB v. Sebelius), 567 U.S. 519 (2012)
Issue: Constitutionality of the Medicaid expansion under the Affordable Care Act (ACA).
Ruling:
The individual mandate was upheld under Congress’s taxing power.
The Medicaid expansion, which required states to expand Medicaid or lose all funding, was ruled unconstitutional in part.
Impact:
States could choose whether to expand Medicaid without losing existing funding.
Reinforced that Congress cannot coerce states by threatening existing funding.
B. Goldberg v. Kelly, 397 U.S. 254 (1970)
Relevance to Medicaid: Although about welfare benefits, it established the principle of due process in the termination of public benefits.
Ruling:
Before termination of public assistance (such as Medicaid), the recipient is entitled to a pre-termination evidentiary hearing.
Impact:
Procedural safeguards must be followed in Medicaid benefit terminations.
C. Schweiker v. Gray Panthers, 453 U.S. 34 (1981)
Issue: Challenge to the Secretary of HHS's regulations on transfer between Medicare providers.
Ruling:
Court upheld federal regulations under Medicare, showing deference to agency interpretation.
Impact:
Strengthened administrative authority in Medicare regulation.
D. Armstrong v. Exceptional Child Center, Inc., 575 U.S. 320 (2015)
Issue: Can providers sue states for failing to comply with Medicaid reimbursement requirements?
Ruling:
No private right of action under the Supremacy Clause to enforce Medicaid payment standards.
Impact:
Enforcement of Medicaid standards is limited, often requiring federal agency intervention rather than private lawsuits.
6. Medicaid Expansion under ACA
ACA sought to expand Medicaid eligibility to individuals earning up to 138% of the federal poverty level (FPL).
After NFIB v. Sebelius, expansion became optional.
As of recent data, a number of states have opted out, leaving many low-income adults without coverage in non-expansion states.
7. Challenges in Administration
Medicare faces financial sustainability issues due to rising healthcare costs and aging population.
Medicaid is challenged by:
Varying state standards
Political decisions over expansion
Administrative complexity
8. Summary
| Feature | Medicare | Medicaid |
|---|---|---|
| Legal Basis | Title XVIII, SSA | Title XIX, SSA |
| Case Law | Schweiker, Armstrong | NFIB v. Sebelius, Goldberg |
| Legal Issues | Federal regulation, provider payment | State discretion, eligibility, due process |
| Key Principle | Federal entitlement for elderly/disabled | State-federal partnership for low-income care |
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