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  • HS - Medicare at 50

    By Dr. Susan Archibald

    Happy 50th birthday Medicare! In 1965, under President Johnson, Medicare was born. But that was not the beginning. Way back in 1937, U.S. Surgeon General Thomas Parran wanted medical benefits for Social Security recipients. In 1945, President Harry Truman supported the concept of national health insurance. However, it was not until 1965 that Medicare became a part of the Social Security Act. Title XVIII of the Social Security Act gave access to health care to Americans over 65 years of age.

    Let's take a look back at Medicare's evolving 50-year history. Medicare provided coverage for hospital and post-hospital care as well as home health care for its recipients. When enacted, those over 65 were a part of the population most likely to be living in poverty-only an estimated half had any kind of health insurance. Medicare filled a desperate need in this section of the population. By July 1966, over 19 million Americans had enrolled in the new Medicare program!

    Over the following years, additional benefits were added. In 1972 Congress extended benefits to include people with disabilities and people with end-stage renal disease. In 1973, health maintenance organizations (HMO) were born. If the individual HMO met the federal guidelines for benefits, they could offer benefits to those who chose to enroll when the Medicare statutes were amended that year. A new agency was created in 1977 to administer the Medicare Program: the Health Care Financing Administration (HCFA).

    Medicare did not cover all medical expenses for its beneficiaries, and "Medigap" policies came into being. These policies filled the gap between what Medicare paid and what the actual costs were for medical care. The federal government took over oversight of these policies in 1980.

    In 1983, Diagnosis-Related Groups (DRG) were created to standardize Medicare payments to providers. In addition, hospice benefits were expanded to include home care rather than institutional care for those with terminal diseases. The hospice beneficiaries could receive treatment to control pain and manage disease symptoms. In 1986, the Emergency Medical Treatment and Labor Act (EMTALA) was established. This Act required hospital that participated in the Medicare Program to provide emergency evaluations of patients presenting to their Emergency Rooms. It also prohibited hospital from turning away women in labor. The year 1987 brought the Omnibus Budget Reconciliation Act of 1987 (OBRA 1987) that set the standards of care higher for those people residing in nursing homes.

    Significant changes to Medicare came in 1988 with the passing of the Medicare Catastrophic Coverage Act of 1988. The Act significantly expanded benefits and included a cap on individual patient liability. The Act also protected the spouses of institutionalized persons with the introduction of the Qualified Medicare Beneficiary (QMB) Program. However, the Act was repealed in 1989 due to its exorbitant cost.

    The 1990s brought more changes to Medicare. In 1995, the Social Security Administration ended its connection to the Department of Health and Human Services and established its own headquarters.  In 1996, the Health Insurance Portability and Accountability Act of 1996 (HIPAA) was passed. While it is most famous for protecting patient privacy, it had other far-reaching aspects. Under it, the Medicare Integrity Program was created. This directed monies to programs to track integrity issues. It addressed the use of the electronic transfer of patient information. Finally, it charged HHS with creating rules for adequate privacy if Congress failed to do so.

    The Balanced Budget Act of 1997 (BBA) brought more changes to Medicare. These changes varied from introducing new choices for managed care plans through an open enrollment period to providing education on the available plans to developing more prospective payment systems for targeted services. Focus was directed to the cost of Medicare and how to keep it viable. Research was encouraged to find new and innovative ways to provide care within the financial capabilities of the program.

    Medicare entered the electronic age with the introduction of the Medicare.gov website in 1998, which provided updated information to the public. In 1999 Medicare began sending out the "Medicare & You" handbook to enrollees, and continues to send this handbook out annually.

    In response to providers, the Balanced Budget Refinement Act of 1999 (BBRA) increased some payments. The payments increased again in 2000 with the Benefits Improvement and Protection Act (BIPA).

    The year 2001 brought a name change for the HCFA: the Centers for Medicare & Medicaid Services (CMS). The Medicare Prescription Drug, Improvement, and Modernization Act (MMA) was introduced and has been considered the most significant change to Medicare: coverage of prescription medications. This Act allowed competing companies to offer prescription coverage to Medicare enrollees. The prescription coverage continued to evolve with the creation of the Part D section of Medicare. In 2006, the first year, there were 39 million enrollees in Medicare Part D.

    The Patient Protection and Affordable Care Act (ACA) was signed into law by President Obama in 2010. The ACA increased benefits on prescriptions and preventive health benefits for Medicare participants. Some interesting statistics on Medicare resulting from the ACA include a savings of $2.1 billion in prescription drug costs for the 3.6 million Medicare enrollees and preventive health services provided to more than 25.7 million members.

    Where will Medicare go from here? Here are some final thoughts that have been presented to continue the improvement of the program: offering a prescription benefit in Medicare Part B; inclusion of vision, dental and hearing aid costs; and availability of an appeals system that is fair and accurate. Whatever direction Medicare takes, there are millions of Americans who are healthier and more secure because of it.

    Dr. Susan Archibald is the Academic Department Chair of the Bachelor and Master of Health Care Administration programs as well as the Medical Office Administration Certificate.

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