Question

Why the rise?

There are many reasons for the increased demand for medical services since 1965. What factor do you believe has been the MOST significant for increasing demands for Medicaid services? Fully answer why???

Answer 1

There has been increasing demands for medical services in various countries especially USA since 1965 due to increasing government's role in medical sector. Before, 1965 there was no interference of Federal government in medicare sector and health insurance costs of elderly and seniors in USA was too expensive. Elderly people who are 65 years or above had to bear major portion of their monthly income on healthcare plans of private companies. To reduce the cost burden of common people, Federal Government in 1965 introduced Medicare and Medicaid law in the country. Under this healthcare plans, the Federal Government runs two public healthcare plans Medicare and Medicaid for common people. The majority cost of the public healthcare plans are being borne by the Federal government that reduces the medical expenses of people in USA. The main purpose of healthcare policy of Federal government was to create better healthcare infrastructure and people such as medical practitioners, nurses, attendants, hospitals and clinics in USA. But with the growth of healthcare facilities, the healthcare expenses of people also significantly rose mainly due to increase in physicians' visit, cost of medical appliances, maintenance costs of hospital, clinics etc. The stop the rising healthcare cost, Federal government decided to regulate the number of physicians in hospitals and clinics and healthcare firms in the country and continue with healthcare subsidy plans that continued till 1980. Till 1980, around 12 million Americans were covered by Medicaid and 20 million Americans over 65 years were provided Medicare insurance services. There are many other factors for growth in demand for healthcare services in USA such as rise in personal income of people, growth in elderly people, advancement in treatment technologies and increasing number of healthcare companies. But the most significant factor responsible for growth in demand of healthcare services in USA is public healthcare plans. The number of people who received benefits under Medicaid plan between the period 1965-205 rose from 1.8 million to 4.8 million. Similarly, number of people who received insurance covers under Medicare plan between the same period rose from 0.8 million to 2.4 millions. However, there was sharp decline in the demand for public healthcare plan known as Obamacare that was introduced by then US president Barack Obama in 2010.