Managed Care Organization, Medicare and Medicaid Programs

Subject: Healthcare Financing
Pages: 3
Words: 1088
Reading time:
4 min


Medicare and Medicare services, as well as managed care companies, are often used phrases in the United States’ insurance and affordable health care programs. These insurance programs are experiencing financial difficulties that must be addressed through a variety of alternate techniques. Thus, this essay will discuss both Medicare and Medicaid, their similarities, and how they differ, while also providing a thorough exploration of alternate options for reducing the strain on both programs.

A managed care organization (MCO) is a group of health sector organizations and professionals that collaborate to deliver inexpensive health care to their members while also controlling their expenditures. Among the MCO’s aims are to provide high-quality health care when medically necessary and to provide services by the best-qualified health care practitioner. MCOs are also in charge of overseeing how medical professionals are compensated for their services. Medicare is a federal government health insurance program that provides financial assistance to low- and middle-income individuals in the United States (Sultz et al., 2017). People over 65, those who meet specific eligibility requirements, and those with certain diseases are all covered by the plan.

Different Medicare plans cover different healthcare situations, some of which are paid for by the insured individual. There are advantages to this, such as giving consumers more options in terms of cost and coverage, but there are drawbacks as well. Medicaid is a health insurance program for low-income adults, children, expectant mothers, the elderly, and people with disabilities in the United States who otherwise would not be able to afford it (Sultz et al., 2017). The federal government mandates that states be in charge of managing Medicaid benefits. States and the federal government contribute to the program’s funding.

Both Medicare and Medicaid are similar in that they operate independently of one another to provide insurance to individuals. A managed care organization is comparable to Medicare and Medicaid in that all three organizations work to reduce the cost of health care for all people. Despite their similarities, all three have their own unique characteristics. Medicare is a federal health care program that covers persons over the age of 65 who are disabled or do not have a handicap, regardless of their income, whereas Medicaid is a state- and federally sponsored program that covers low-income individuals. MCO is distinct from both Medicare and Medicaid in that it encompasses all Medicaid and Medicare services under a single plan. It encompasses medical, behavioral health, nursing facility, and “waiver” services for community-based long-term care. Gate keeping has two distinct definitions often used in health care. One refers to the role of individuals in the health insurance industry, while the other is used to describe long-term care plans.

When applied to health insurance, the term “gatekeeper” refers to the individual who is responsible for a patient’s treatment. Anyone who receives health insurance through a managed care plan, more precisely a health maintenance organization (HMO) plan, is assigned a gatekeeper or given the option of choosing one. In some instances, the insured party is directed to select a primary care physician from a list, and that physician serves as the patient’s gatekeeper. Gatekeeping has been linked to higher levels of care and more accurate referrals to specialists and other facilities for additional testing and treatment. More primary care visits are always related with reduced hospitalizations and increased utilization of specialists as a result of gatekeeping.

Alternative Strategies to Relieve Financial Burden Facing Medicare Program

Alternative approaches to alleviating the financial pressure that Medicare is now facing. In total, Medicare provides coverage for nearly 500,000 elderly and disabled people (Sultz et al., 2017). Due to high premiums, out-of-pocket cost-sharing, and gaps in the Medicare benefit package, consumers may find themselves paying a significant portion of their family’s budget on health care. Families on Medicare in the United States spend more than any other demographic on health care.

The Medicare system can expand bundled payments and promote new payment models, reduce preventative readmissions and unnecessary complications, reduce payments to post-acute providers, reform and reduce payments for graduate medical education, reduce Medicare’s coverage of bad debts, reduce the price and use of expensive drugs, and reform Medicare’s cost-sharing rules to reduce the drain on resources without reducing benefits (Chisolm et al., 2019). Despite the fact that some of these ideas may encounter opposition, this list shows that policymakers have great latitude in limiting projected increases in Medicare spending without endangering beneficiaries.

Alternatives to Ease Drain of Medicaid Resources

Providing long-term care for the elderly is becoming more and more expensive, and Medicaid is picking up the tab. In order to alleviate the strain on public coffers, it is necessary to discover new ways of dealing with the problem. Reducing long-term care expenses can be achieved by increasing the use of managed care services and assistance, tightening financial eligibility standards for long-term care services, extending home and community-based services, and increasing the use of private long-term care insurance. Financial eligibility can be tightened by limiting asset transfers, raising estate recovery efforts, and counting retirement funds as countable assets (Moon, 2018). This will almost certainly result in cost reductions for the Medicaid program. By encouraging members to enroll in long-term care insurance, the Medicaid program can avoid costly member subsidies.

Long-term private insurance demonstrates decreased reliance on subsidy expenses, resulting in cost savings. To achieve the aim of growing home and community-based services, states must steadily increase their utilization. This results in cost savings with minimum disruption to the financial system. Additionally, there is a need to enhance the use of managed long-term service and support. Elderly individuals should be informed about support groups and long-term care options to ensure that certain services, such as avoidable emergency department visits, hospital stays, and institutional care, are utilized (Moon, 2018). The solutions indicated above are anticipated to result in a decrease in the financial burden on Medicaid resources. In conclusion, Medicaid, Medicare, and managed care organizations are all resourceful insurance programs, and as such, there is a need to alleviate financial difficulties associated with these programs.

Comparison Table Between Three Entities

MCOS Medicare Medicaid
Discussed the role of gate keeping in health care and its advantages in managed care organizations Focused on how to reduce financial drain on Medicare resources Focused on how to reduce financial drain on Medicaid services on elderly which has huge financial impact on states budgets
They all are insurance programs, they ensure citizens achieve affordable and quality health care services, and they all provide health care services at lowered costs.


Chisolm, D. J., Brook, D. L., Applegate, M. S., & Kelleher, K. J. (2019). Social determinants of health priorities of state Medicaid programs. BMC Health Services Research, 19(1), 1-7. Web.

Moon, M. (2018). Medicare now and in the future. Routledge.

Sultz, H. A., & Young, K. A. (2017). Health care USA: Understanding its organization and delivery (9th ed.). Jones & Bartlett.