The Origin Of Medicare Medicaid Health And Social Care Essay

Professor Wigg

The Origin of Medicare/Medicaid

The concept of national health insurance began in the early 20th century in the United States and then became a more popular topic during the Truman administration. Between 1958 and 1964, controversy grew and the Social Security Amendment was drafted. The signing of the act, as part of Johnson's Great Society, began an age with greater stress on public health issues. Medicare and Medicaid became the United States' first public health insurance programs. The legislation was strongly opposed by the American Medical Association, but following its enactment the AMA cooperated fully.

Medicare and Medicaid were both created in 1965 under the Social Security Act.  Medicaid was formed as an entitlement program to help states provide medical coverage for low-income families and any others who they considered eligible. Candidates included the blind, aged, disabled and pregnant women. Basically, Medicaid serves as the nation’s major source of health insurance coverage for low-income populations. Each state administers its own Medicaid program, institutes their own eligibility standards, regulates the variety and types of services they will cover, and sets the amount of payment. Benefits vary from state to state, and because someone qualifies for Medicaid in one state, it does not mean they will qualify in another.

The federal Centers for Medicare and Medicaid Services, or the CMS, monitors the state-run programs and creates requirements for service delivery, quality, funding, and eligibility criteria. The Medicaid Drug Rebate Program was created by the Omnibus Budget Reconciliation Act of 1990. This program was created due to the costs that Medicaid programs were paying for outpatient drugs at discounted prices. The Omnibus Budget Reconciliation Act of 1993 brought changes to the Medicaid Drug Rebate Program, as well as requiring states to implement a Medicaid estate recovery program to sue the estate of decedents for medical care costs paid by Medicaid. States have been known to bundle together the management of Medicaid with other programs, such as the Children's Health Insurance Program, so the same organization that handles Medicaid in a state may also supervise additional programs.

Medicaid is a program that is not exclusively financed at the federal level. States provide up to half of the funding for the Medicaid program, in some states counties also contribute funds. Medicaid is a means-tested, needs-based social welfare program rather than a social insurance program. Eligibility is decided mainly by income, but the main condition for Medicaid eligibility is limited income and financial resources, a condition which plays no role in influencing Medicare coverage. Medicaid covers a wider range of health care services than Medicare, though some people are eligible for both Medicaid and Medicare and, are known as Medicare dual eligible. In 2001, about 6.5 million Americans were enrolled in both Medicare and Medicaid.

Medicare was created to provide health insurance to people age 65 and older, regardless of income or medical history.  Before Medicare's creation, only half of older citizens had health insurance. And with coverage often unavailable or unaffordable to the other half, because these older citizens had half as much income as younger citizens and paid nearly three times as much for health insurance. Medicare also prompted the racial integration of thousands of waiting rooms, hospital floors, and physician practices by making payments to health care providers conditional on desegregation.

Medicare has been in operation for over forty years and has undergone several changes since 1965. The provisions of Medicare have expanded to include benefits for speech, physical, and chiropractic therapy while also adding the option of payments to health maintenance organizations in 1972. Congress also expanded Medicare eligibility to younger citizens who have permanent disabilities and receive Social Security Disability Insurance payments and those who have end-stage renal disease.

Since the creation of Medicare, medicine has advanced, and life expectancy has increased as well. The fact that people are living longer means more and continued services for the later stages in life. So in 1982, the government added hospice benefits to aid the elderly on a temporary basis. Two years later, hospice became a permanent benefit. The next major change came in 1997, when Medicare expanded to include Medicare plus Choice, which is a health insurance program offered by private companies that have been approved by Medicare.

While President Lyndon B. Johnson was accountable for signing the bill, there were numerous others involved in conscripting the final bill that was introduced to Congress. In 1964 the democrats controlled both the Presidency and the Congress. The Democrats had bye this time, started to shift away from Southern Democrats, making them more sympathetic towards health insurance reform. Wilbur Cohen, who was the Assistant Secretary for Legislation of the Department of Health, Education and Welfare, pushed the Medicare bill. Cohen persuaded Johnson to give the bill high priority, and Johnson professed its importance to his Great Society program. The bill was given the labels H.R. 1 and S. 1 as the first bill introduced in each House of the Congress.

The groups previously against the legislation transferred their focus from opposing the bill to creating new versions of it, as a result three forms of the bill emerged. John Byrnes', the American Medical Association’s, and the administration's bill. Byrnes was a republican committee member who proposed that doctors' services and drugs be financed, and that involvement in coverage would be voluntary for the elderly. If an elderly patient did need the help, his or her funding would be "scaled to the amounts of the participant’s Social Security cash benefits" and the financing would come from the government’s revenues. The AMA suggested Eldercare, which provided government funding for physician’s services, surgical charges, drugs, nursing home costs, and x-ray and lab services. When brought back to the committee the three bills were presented.

When deliberations began both AMA members and their suggestions were rejected. Wilbur Mills, the chair of the committee, proposed combining Byrnes' ideas and Medicare. His committee took on the task of drafting the bill that eventually became law.

In March 1965, Mills presented a draft of the bill to Congress. The bill went through more than five hundred amendments before being passed by majority vote in both the House 307-116, and Senate 70-24. The legislation made two amendments to the Social Security Act of 1935. Title XVIII became known as Medicare, and includes Part A, which provides hospital insurance for the aged, and Part B, which provides additional medical insurance. Title XIX became known as Medicaid, provides for the states to finance health care for individuals who were at or close to the public aid level with federal matching funds.

On July 30, 1965, President Johnson signed the bill, making it Law. The signing was attended by Harry S. Truman. Johnson credited Truman with "planting the seeds of compassion and duty which have today flowered into care for the sick and serenity for the fearful."

In 1977, the Health Care Financing Administration was established as a federal agency responsible for the supervision of Medicare and Medicaid, I would be renamed to Centers for Medicare and Medicaid Services in 2001.

By 1983, the diagnosis-related group replaced pay for service compensations to hospitals for Medicare patients. President Bill Clinton tried an overhaul of Medicare through his health care reform plan in 1993, but was unable to get the legislation passed by Congress. In 2003 Congress passed the Medicare Prescription Drug, Improvement, and Modernization Act, which President George W. Bush signed into law on December 8, 2003. Part of this legislation included filling holes in prescription-drug coverage left by the Medicare Secondary Payer Act that was passed in 1980.

On August 1, 2007,Congress voted to reduce payments to Medicare Advantage providers in order to pay for prolonged coverage of children's health under the State Children's Health Insurance Program or the SCHIP. The State Children's Health Insurance Program was designed to cover uninsured children in families with incomes that are modest but too high to qualify for Medicaid. As of 2008, Medicare Advantage plans cost, on average, 13 percent more per person insured than direct payment plans. Many health economists have determined that payments to Medicare Advantage benefactors have been excessive. The Senate, after heavy lobbying from the insurance industry, declined to agree to the cuts in Medicare Advantage suggested by the House. President Bush subsequently vetoed the SCHIP extension.

As legislators continue to pursue new ways to regulate the cost of Medicare, a number of new offers to reform Medicare have been presented in recent years, such as premium support, raising the age of eligibility, and negotiating the prices of prescription drugs.

Medicare, and Medicaid will continue to be debated until we can find a way to regulate and fix the financial problems that have plagued the program since its enactment in 1965.