What are Medicare’s biggest challenges today and why?

Challenges with Medicare
Medicare is a government funded insurance program that provides health coverage to older adults or to individuals with long term disabilities. Medicare has no income requirements but individuals are required to have worked for 10 years or more and have made payroll tax contributions (Nickitas, Middaugh, & Aries, 2016). Medicare is divided into four parts. Part A includes skilled nursing facilities, hospital bills, home health, and hospice. Part B includes physician services. In long term care, Medicare Part B is used when a patient who is on Medical requires therapy services. Part C is a private plan called Medicare Advantage which includes both Parts A and B along with prescription benefits. Part D was later on established in the Medicare Modernization Act which includes a private prescription drug plan. With health reforms such as the Affordable Care Act (ACA) in place, the influx of patients seeking all types of medical care causes an increase in healthcare cost, which ultimately makes cost inflation a major challenge for Medicare.
Initially, Medicare reimbursements were set up on a fee-for-service basis. Medicare reimbursements were previously based on the cost set forth by healthcare facilities and providers. When factors such as chronic health conditions, technological advancements, and the aging population continued to increased healthcare expenses, this model proved to be ineffective. Medicare then started to implement the Diagnosis-Related Groups (DRG) payment system which pays a flat rate for patients receiving hospital care. When the DRG was implemented, hospitals started to provide more efficient care and which resulted in shorter lengths of stay and helped lower down costs (Nickitas et al., 2016).
Medicare has attempted to control cost by limiting the number of days the patient is covered in a specific healthcare facility every year. For example, Medicare only allows 100 days in year of skilled nursing and rehabilitation services for each individual. Once a patient reaches the maximum amount of days, they are either switched to Medical or they discharge back to their home with home health services in place for continuity of care.Medicare also started to set lower reimbursement rates if hospitals had higher readmission rates or hospital acquired infections (Jaffe, 2015). The Centers for Medicaid and Medicare (CMS) created new guidelines that include a patient-driven payment model (PDPM) as the standard reimbursement model for patients under Medicare to further help control costs. The more complex the patient’s case is, the higher the reimbursement is. While Medicare has definitely been a great advantage to the elderly population, patients that require extensive care still puts Medicare in a financial burden. Cost control must be established through innovative payment systems to prevent further financial crisis.