Medicare: A Brief Review Essay Sample

Abstract

Public policy making is generally never an easy task for most nations. This is particularly very true for a nation like the US which had been a symbol of freedom and democracy. Given the historically pro market ideology and the anti government bias, necessitating governmental action is difficult. This feature extends also to the role of the government in health care. The need and the efforts to legislate a national health insurance plan for the Americans may be traced back to 1912 having dodged the country for a long time. In 1965 Medicaid and Medicare directed at the poor and the elderly respectively were rolled out. Medicare had several components with their varied premiums, coverage, and funding pattern. Despite constant reforms, the recent reforms have been more influential. Given the budget constraints and the demand on the Medicare system, one can only expect more reforms to be coming. The recent Obamacare provide a boost to Medicare. However it has further complicated the system, confusing many Americans. Americans need to consider national interests and support these from the national perspective than their individual position.
National public policy making is never easy, given the number of diverse stake holders with their diverse interests. Unfortunately such positions contributing to stalemate or dilemmas in policy making, reflecting the differences in perception, also extend to health care. Although Americans agree that access to medical care is any individual’s right and that none should be denied medical care for financial reasons, difficulties arise when strategies are developed to implement these. There is no doubt that the US has historically seen a pro market ideology and an anti government bias in general. When people want more governmental action, they have a burden to justify it and ensure political support for its implementation. The efforts to legislate a national health insurance plan for the Americans may be traced back to 1912, when President Teddy Roosevelt included it in his reform plans as he ran for the President. However the prospects of a national health plan began to take shape only in 1945, when President Harry Truman called upon the Congress to create a national health insurance fund. Another notable effort at legislating a national health insurance policy was undertaken by John Kennedy, subsequent to a national study that revealed that 56% of Americans above 65 years were not covered by any health insurance (Anderson, 2015). The American Medical Association (AMA) then opined that the bill when passed would strain the medical resources within the country while also lowering the income of doctors. It was finally President Lyndon Johnson who signed Medicare into law on July 30, 1965. The year 1965 also saw the roll out of the Medicaid, the largest welfare program directed at the poor by the federal government.
With the creation of Medicare, American employers and employees had to pay an additional tax which went into an exclusive Federal Supplementary Medical Insurance Trust Fund. As of end 2014, an estimated 49,435,610 people were covered by the Medicare program. While the program covers people above 65 years of age, it is also applicable for individuals with permanent kidney failure or the disabled. Individuals who have applied for Social Security retirement benefits automatically get enrolled for Medicare once they reach 65 (Family Care America, 2015). Medicare changed from being a three component system to a four component system with the inclusion of Part D in 2006. These four components namely Part A, Part B, Part C, and Part D may be briefly described as:
Part A: Also called the Hospital Insurance Protection, it provides healthcare insurance for treatment within participating hospitals and for post-hospital care (EBESCO, 2015). Part A pays for only institutional fees and not physician’s charges. There is no monthly premium for Part A as the individual or spouse had paid during working, through the Medicare Hospital Insurance Trust Fund. Those unable to receive premium-free Part A and those who had never worked, can also get Part A for payment of a premium of $407 each month (Medicare, 2015). While a monthly premium is not required from those who had paid during employment, a Part A deductible of $1132 is required to be paid yearly, before any hospitalization coverage starts.
Part B: Also called the Medical Insurance Protection, it covers medical care not included in Part A. This is an optional insurance program funded by general revenues and beneficiary premiums. Under Part B, beneficiaries would pay a part of all costs or in some cases, the total cost until their deductibles are received (American Society of Clinical Oncology, 2009). Among the services covered by Part B are physician’s services, ambulance services, emergency room services, diabetes screening, mammograms, tests, X-rays, and MRI. It should be noted here that Plan B does not cover certain treatments like cosmetic surgery, dental care, orthopedic shoes, and routine physical exams (Family Care America, 2015). Just like Part A, Part B also has specific enrollment times, with a penalty applicable when an individual does not sign up when he or she first became eligible.
Part C: Part C form the Medicare Advantage Plans offered by Medicare approved-private insurance companies. It is necessary to enroll in both Part A and Part B before enrolling for Part C plans, where individuals sign up directly with the insurance providers. Part C offers multiple health plan options covering all Part A and Part B services. These Advantage Plans provide options for preferred provider organizations, medical savings accounts, special needs plans, and health maintenance organizations. It is legal requirement that the Part C plans must at the minimum cover the services provided by Part A and B which constitute the original Medicare. However these plans pay for vision and dental care and to some extent, prescription drug coverage (AARP Foundation, 2015). The main types of Medicare Advantage Plans are:
Medicare Health Maintenance Organizations (HMO) Plans: Under these plans, care can only be sought from physicians and specialists specified in the plan, except during emergency. For prescription drug coverage, one must join a HMO providing drug coverage.
Medicare Preferred Provider Organizations (PPO) Plans: In these plans, an individual can generally visit any physician irrespective of the network affiliated providers. But such visits would cost more when compared to visiting those on the network. Here too prescription drug coverage is unavailable and one must join a PPO offering this.
Medicare Private Fee-for-Service (PFFS) Plans: Here an individual can seek care from any doctor or hospital that has accepted the payment conditions offered by the plan. It is necessary to check with the plan provider before visiting a doctor or hospital and confirm their acceptance of the plan. An individual may have to pay from his pocket when the care provider does not accept to the conditions of the plan.
Medicare Special Needs Plan (SNP): These plans are for individual with special needs. These include people who are diagnosed with chronic conditions and ‘dual eligibles’ that are eligible for both, Medicare and Medicaid. All SNPs include prescription drug coverage (One Exchange, 2014).
The Medicare Advantage Plans has its own premium. A notable feature of the Advantage Plans is the ‘maximum out-of-pocket-limit’ which sets an upper limit on the total amount one should pay for a given year.
Part D: A law covering prescription drugs for the elderly under Medicare was passed in 2005 by the then President George Bush. Considered the Part D of the Medicare, it increased Medicare costs by $100 billion (EBESCO, 2015).Part D generally has an exclusive premium when added to the coverage of Part A and B. Part D premium is usually integrated with the Advantage Plan premium. It must be noted here that all Medicare Advantage Plans do not cover the prescription drugs (American Society of Clinical Oncology, 2009). However there is a coverage gap under Part D that when the combined (individual and insurer) prescription cost for a particular year exceeds a threshold value, then from that point you will have to bear the total prescription costs. This apart, you would also be paying your Part D premiums too (AARP Foundation, 2015).
There is also the Medicare Supplemental Insurance or the Medigap that covers certain health care costs that are not covered by Part A or B like coinsurance and deductibles. Offered by private companies, when Medigap is augmented to Medicare, Medicare would pay the approved health care costs while Medigap would in turn pay its share. The Medigap is different from Medicare Advantage Plans in that while the Advantage Plans are permutations and combinations to get Medicare benefits, Medigap only supplements Part A and B, the original Medicare (Medicare, 2015).
Medicare is a complex system with many interlocking components, which over the years had gone more complex. Medicare has been seeing more changes in the recent times than any time before. A major shift came with the Medicare Modernization Act which empowered Centers for Medicare and Medicaid Services (CMS) to reform the administrative structure of the fee-for-service program, which saw the entry of the Medicare administrative contractors. This was subsequent to the Congress mandated advisory councils citing coverage inconsistencies even within states (American Society of Clinical Oncology, 2009). There was subsequently confusion and complexity on the part of the contractors who bid for regional contracts involving millions of dollars of claims processing revenues. These contractors wanted safeguards in case they were at an unperceived disadvantaged position any time during their five years contract period. Their protests added time and costs to the transition. It should be noted here that the oncology community had been significantly impacted with the Medicare Modernization Act. The pricing of chemotherapy drugs was revised from average wholesale pricing to pricing on the basis of average sales with an additional 6%. This in turn had forced oncologists to adjust the services they offer. Looking ahead, there is no doubt that the recent changes in Medicare would continue to evolve, given the increasing number of individuals requiring coverage and the budget constraints. The continuing financial crisis and deficits would place increasing pressure on the Congress to refine healthcare spending. History has it that the Balanced Budget Act of 1997 saw Medicare subjected to massive cuts in funding. However the future is likely to see an increased focus on quality and spending cuts tied to quality.
With Medicare covering the aged and Medicaid covering the poor, many other Americans and their dependents don’t have any health insurance. Approximately 84% of the American population is covered either by private or governmental health insurance, leaving about 15% without any medical insurance. Most of these uninsured are those Americans who are not poor to qualify for Medicaid or old enough to get Medicare. The recent Obamacare or the Affordable Care Act sought to combat rising costs and provide insurance to more Americans (Obamacare Facts, 2015). With regard to the Medicare, the Act while maintaining the benefits, protections and rights, has cut some aspects of the program that wasn’t working. The Act however includes about a thousand pages of reforms and Americans are only finding it difficult to understand how their health care could be covered.
Irrespective of the plans and strategy, people can contribute to easing the load on the healthcare system, by demanding lesser services. They should be more health conscious and promote good health within their circle. It is also important for Americans to put aside their personal interests and consider national interests when deciding to support policies, particularly in the field of health. Only healthy people can ultimately contribute to a healthy nation.

References

AARP Foundation (2015). The Medicare Plans (Yes Plans). Retrieved from http://www.aarp.org/health/medicare-insurance/info-01-2011/understanding_medicare_the_plans.1.html
American Society of Clinical Oncology (2009). Overview of Medicare Parts A-D. Journal of oncology practice. Mar; 5(2): 86–90. Retrieved from http://www.ncbi.nlm.nih.gov/pmc/articles/PMC2790649/
Anderson, S. (2015). A brief history of Medicare in America. Retrieved from http://www.medicareresources.org/basic-medicare-information/brief-history-of-medicare/
EBSCO (2015). History of Medicare in the US. Retrieved from http://connection.ebscohost.com/health/medicare/history-medicare-us
Family Care America, (2015). An introduction to Medicare. Retrieved from http://www.caregiverslibrary.org/caregivers-resources/grp-money-matters/hsgrp-medicare-medicaid/an-introduction-to-medicare-article.aspx
Medicare (2015). Part A costs. Retrieved from http://www.medicare.gov/your-medicare-costs/part-a-costs/part-a-costs.html
Obamacare Facts (2015). What is ObamaCare (the Affordable Care Act)?. Retrieved from
http://obamacarefacts.com/whatis-obamacare/
One Exchange (2014). Medicare Advantage (Medicare Part C). Retrieved from https://medicare.oneexchange.com/medicare/medicare-advantage