Evolution of Medicare/Medicaid Essay.

Evolution of Medicare/Medicaid Essay.


The Federal Government and the State Governments in the US have launched several programs throughout the US in order to pay for healthcare services for the local population. In fact, the Federal Government is the largest payer organization in the US for healthcare services. Following the social security system, the Medicare scheme occupies the largest Federal spending. In the year 1990, about 3 % of the GDP was spent and about 37 million people were insured. It costed the Government about 107 billion US dollars in the year 1990 (Manning, 1998).


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Today Medicare covers about 40 million citizens in the US. It is a sort of Health Insurance Plan for individuals above the age of 65 years. Disabled individuals below the age of 65 years can also be included under Medicare. It also includes people suffering from end stage renal disease, renal failure, and those requiring renal transplants or dialysis. Medicare is divided into three parts, namely, Part A, Part B and Part C (ADA, 2005). Part A is hospital insurance, which most people have to pay.Evolution of Medicare/Medicaid Essay.


It includes hospitalization care, inpatient services, nursing care, hospice care and other parts of healthcare services. Hospitalization for about 90 days per illness spell is usually covered by Part A. Even nursing care for about 100 days per illness spell is covered (Lonchyna, 2006). Inpatient home care for about 100 visit spell of illness and inpatient psychiatric care for about 190 days is covered by Party A. Once an individual crosses the age of 65, the transfer to Medicare is automatic (ADA, 2005). This portion of insurance is mandatory.

No monthly charges are collected for Medicare as the individual or the family member would have paid taxes when they were working. A minimum of ten years of employment is necessary to ensure that one gets Medicare insurance (Lonchyna, 2006). Usually the employer and the employee pay 1. 45 % of the Part A insurance coverage. If the individual is self-employed, he has to pay about 2. 9 % to obtain the insurance coverage as the deductible amount every year. The individual should meet the US $ 792 deductible amount every year in order to obtain Part A of Medicare.

Individuals who have not paid for taxes when they were in service can purchase Medicare Insurance provided certain terms and conditions are being fulfilled. The Medicare Card is Color Coded and may be red, white or blue (Lonchyna, 2006). Part B of Medicare includes Medical Insurance such as physician consultation, equipment charges, laboratory charges, diagnostic tests, occupational therapy, CAM, blood transfusions, and other routine medical services (ADA, 2005). It is optional overcomes some of the flaws that may be existent in Part A.

This part is especially meant for those who are chronically sick and cannot afford the guidelines for coverage under Part A. It not only covers health needs but also provides extra security in the form of insurance. However, it does not provide 100 % insurance but only 80 % (Lonchyna, 2006). The remaining 20 % may be provided through coinsurance. The Federal Government and certain beneficiary premiums fund the Part B of Medicare. An amount of US $ 100 is deductible from the beneficiary every year towards insurance in Part B or Medicare.

It mainly includes payment for the physician services, outpatient services and other medical services charges (ADA, 2005). However, there may still be certain uncovered portions such as medications, long-term medical care, dental treatment, eye care and other services. Part C of the Medicare provides for a choice of Medical packages provided by the Health Maintenance Organization or HMO’s on a Contract basis for a certain period according to the options for health care services chosen by the beneficiary (Lonchyna, 2006). The CMS pays these HMO for providing the Health packages to the beneficiary.

The amount is fixed and does not depend on the extent or cost of care provided. This was introduced in 1997 through the Balanced Budget Act (Lonchyna, 2006). Before 1930, people had to pay from their own pockets whenever the needed medical care. Many of the patients even sought welfare schemes and mutually-understood benefits with the physicians and other healthcare providers. Several of the physicians received goods and followed a batter system rather than receiving cash for the payment of professional fees by the patients.

At that time, the medical system was perceived to be a very high profession and physicians were having a paternistic attitude whilst providing care to the patients. The physicians were felt to be more concerned about public health and community welfare. The ‘doctor knows best’ policy was followed during that period (Lonchyna, 2006). Around the year 1930, several private and third parties began entering into healthcare and medical payment began to change in the US. Basically, the third parties that sponsored healthcare were of two types, namely private parties and public parties.Evolution of Medicare/Medicaid Essay.

The first such company to enter the medical insurance coverage was the Blue Cross and the Blue Shield, when it entered into a partnership with the Baylor University Medical Center. At that time, the company along with the hospital provided insurance coverage for the public at a cost of dollar 6 for about 21 days. The company’s scheme soon became a success and began to spread to several parts of the US. Several other insurance agencies soon began to participate in insurance partnerships with hospitals throughout the US (Lonchyna, 2006).

The Medicare Bill was passed by the then US President Johnson on July 30th, 1964. It came under the purview of the Centers for Medicare and Medicaid Services (CMS), which was known before as “Health Care Financing Administration (HCFA)”. Medicare was initially brought in to serve as a support plan during the old age period. It was brought in to reduce the dependency on family and charity. Even before the 1965 legislation for Medicare was introduced, the people of the US opposed the thought of having a government-supported system to fund healthcare.Evolution of Medicare/Medicaid Essay.

The development of Medicare in the US has purely been incremental, as new strategies were developed to cover up new problems that may be arising. The Government developed some sort of interest in funding public health care in the US as early as 1934. The committee on Economic Security was established in 1934 by President Roosevelt to determine the feasibility of having a government-supported healthcare system in the US. Roosevelt was informed by the Committee that a health insurance plan for all the citizens of the US was possible, but he then decided to postpone it as a Social Security Bill was still to be passed by the legislation.

The Social Security Bill was finally passed in August, 1935, and Roosevelt appointed another Committee to determine the planning of an insurance package. Falk IS was deputed in 1935 to initiate and plan a detailed insurance plan for the nation. A National Health Conference was health in 1938 to discuss the how an medical care scheme could be started using taxpayers money and public funds. The American Legislatives soon became very much interested in ensuring healthcare for its citizens and passed almost every Bill that was brought into the house concerning healthcare.Evolution of Medicare/Medicaid Essay.

The Wagner-Murray-Dingell bills, since 1943 ensured setting up of a comprehensive national health plan for the citizens. However, there was a lot of opposition for national health insurance. The AMA at that time was not supporting the Government and was also against the Government sponsoring medical care. Truman became the President in 1945 and soon began to motivate the American people about the advantages of having a comprehensive Insurance health program for the nation.

However, the idea of having a Comprehensive insurance program for the nation was very unpopular, and slowly the committees appointed felt that healthcare programs should be planned only for certain needy sections of the population such as elders, poor and those having severe health problems. The idea was developed in 1950 by Oscar Ewing and was supported by Falk. Several Committees began to actually plan out what was the criteria of such an insurance program, and finally in 1964, the Medicare bill was passed by President Johnson (Twight, 2007).Evolution of Medicare/Medicaid Essay.

In the 1980’s, John Wennberg began to conduct several studies to determine the health consumption. He noticed a difference in consumption in various areas and felt that economic variables played a very important role. Several new schemes such as payment for services and managed care were developed. Diagnostic Related Group was a package concerned with reducing the healthcare spending under Part A and Resource Based Relative Value Scale was set up under Part B to reduce costs (Lonchyna, 2006).

Medicare also ensured that the issues in the physician-patient relationship were maintained with confidentiality and a system of accountability and responsibility existed (through the passage of the Health Insurance Portability and Accountability Act in 1996). The Medicare Scheme had helped to transform the healthcare system in the US right through the 20th century. The Federal Government has ensured modifications to the scheme so that it is able to adapt to the changing needs of the population. Medicare has helped to transform the type, quality and the cost of healthcare services in the US (Lonchyna, 2006).Evolution of Medicare/Medicaid Essay.