The United States Medicare Program - Research Paper Example

?The United s Medicare Program Introduction Medicare is the United s federal health insurance program that covers people who are 65 years or older or those under 65 years of age with certain disabilities and people of any age with end stage Renal disease, a permanent kidney failure requiring dialysis or a kidney transplant. The program is composed of four parts part A, B, C and D. Part A also called hospital insurance covers in patient care in hospitals, skilled nursing facilities, hospice and home health care. In this section people do not pay a premium as it is usually paid for by a spouse under Medicare taxes. Part B also called medical Insurance helps cover doctors’ and other health care providers, services, outpatient care and home health care. It also covers preventive services. Here most people pay a standard Medicare part B Premium. Medicare part C also known as Medicare advantage offers health plan options run by Medicare –approved private insurance companies. Part D also called Medicare prescription drug coverage helps cover the cost of prescription drugs. It also helps in lowering the cost of prescription drugs and shield against higher cost (CMS, 2011). Financial Compliance Medicare spending is a large component of the federal budget and national health spending, in 2006 the Medicare benefit payments totaled $374 billion, in 2007 Medicare spending accounted for 12% of the federal budget and the same year spending on Medicare benefits was 20% of the nation’s total health care sending (Kaiser, 2007). Medicare is financed majorly by payroll tax revenues, general revenues and premiums paid by beneficiaries. Part A is financed by a dedicated tax of 2.9% of earnings paid by employers and their employees. Part B is financed through a general revenue and premiums paid by beneficiaries. Part C is not separately financed while part D is financed form Beneficiary premiums, general revenues and state payments for dual eligible (Kaiser, 2007) Medicare has proved to be a very efficient program and has spent its money appropriately so as to offer all the services it is mandated to offer. Comprehensive compliance programs are a necessity for all hospitals and health care systems. Medicare on its part has ensured that they comply with all the laws put in place to ensure that the money generated from revenue streams is spent on the right services (Piper, 2011). In order to prevent fraud, wastage and abuse in Medicare the department of Human and Health services has instituted the office of the Inspector general and another department that works jointly with the HHS called the Fraud Prevention and enforcement team (HEAT). The two offer compliance training programs such as seminars, training materials and webcasts (Piper, 2011). To ensure that there is compliance another program was begun called the Senior Medicare Patrol program which aims at educating the older adults on Medicare benefits how to prevent detect and report health care fraud. The program recruits volunteers nationwide in the effort to empower older adults to protect themselves from fraud. The programs initiatives are funded by the US administration on Aging (HHS & DOJ, 2011). This program together with the HEAT task force has ensured that they reduce false billings that. This year alone it was able to charge 91 defendants for participating in Medicare fraud schemes that involved approximately $295 million in false billings. Although Medicare as a government agency has complied with all the laws pertaining to financial compliance and used the money they have been allocated wisely, there exist insurance agencies who work on behalf of the Agency that take part in fraud schemes in order to taint the name of the Agency. False billings are a common phenomenon and this has made Medicare to look into ways of ensuring that they stop this kind of fraud. Otherwise all departments have complied with the law (HHS & DOJ, 2011). Economy and efficiency Medicare is considered more economical and efficient in comparison with the private insurers. If you compare the rates of growth for comparative benefits, Medicare’s cumulative cost rate since 1970 to 2000 is estimated at 19% below that of private insurers. One of the most important factors accounting for Medicare’s efficiency edge over the others is its low administrative costs that stand at 2-3% of the total expenditure. The private plans on the other hand have a 10-15% of their total expenditure. This is even much higher in managed care plans something that have given Medicare an edge over the rest (Claude Pepper, 2010). The second evidence is contained in the 2006 congressional budget office report on Medicare expenditure growth over the last 28 years. The report’s analysis found that the excess growth in Medicare spending per beneficiary dropped from 5.5% during 1975-1983 to 0.9% between 1991 and 2003. Excess spending is defined as growth past the combination of the general rate of economic growth and the rate of change in the age composition among beneficiaries. The CBO report and analysis credited this slowdown in Medicare’s expenditure to provider payment policies that are designed to halt hospital and physicians’ expenditures rather than increases in managed care enrollment, changes in Medicare cost sharing or a decline in the general system wide spending (Claude Pepper, 2010). The third thing that makes Medicare more economical than the private sector is that they have a package for everyone and these packages are tailored to the ability of the person. The different parts mentioned above prove this fact with other parts not required to pay for treatment services. The employed group has benefited a lot from Medicare because of the flexibility that exists in the payment of the premiums. A couple would share the load of payment and pay half the total percentage and this is very economical. The private insurers do not have this service as an individual will only pay for the entire premium alone. This covers the person’s family or him alone which puts burden on people in the long run as most end up quitting the entire plan (Kaiser, 2007). The fourth thing is that its funding is not merely concentrated on the pay roll tax revenues but also on the general taxes and premiums that members pay. The federal government by allocating a certain amount of money for this program lessens the tax payer’s burden of having to fund for this program. The taxes that are imposed on the beneficiaries of the program are quite manageable and quite comparable to the quality of services that they receive (Kaser, 2007). A look at the private sector on the other hand reveals that they have to undergo larger administrative costs that are aimed at publicizing the health care plans available to the public. These costs in turn are translated into premiums that members are required to pay to benefit from the scheme. This obviously makes such premiums expensive and many people cannot afford them. This leaves Medicare the best option for the general public who cannot afford this premium pricing (JHM, 2003). Lastly the use of technology in the delivery of services has made the program efficient and cost effective. The initial costs of setting up these facilities are quite high but the benefits on the other hand outweigh the costs. Services are quicker as information about beneficiaries is centralized and can be retrieved quickly to respond to emergencies. Though private insurers use technology the advantage here is that Medicare is with the lower administrative costs the benefits accrued are more as compared to the private insurers where administrative costs are high and therefore even with technology the benefits are still minimal and thus very uneconomical (Claude Pepper, 2010). Program results The objective of the Medicare program is to improve access to health care services for the most disadvantaged elderly in the society by removing distributional, attitudinal and financial barriers. It aims at providing universal coverage for basic medical care and free care access for all citizens in the public hospital system (Durham, 2010). Its vision is to achieve a transformed and modernized health care system and its mission is to ensure effective, Up-to-date health care coverage and to promote quality care for beneficiaries (CMS, 2011). The program has achieved some of the objectives it set out to achieve. The first one is that the longevity of persons above the age of 65 has increased steadily over the course of the twentieth and twenty first century. Their health status as measured by the impairment levels has also improved significantly especially form the 1980’s. In the history of America life expectancy especially for the people above the age of 65 was seen as stagnant but due to the Medicare program the life expectancy has seen some improvement of 6.2 out of 6.6 years (Claude Pepper, 2010). The second achievement is that it has led to improved access to Health coverage and services. The passage of Medicare back in 1965 marked the end of the long debate about universal health coverage for all. Although at that time it was for the older population, it universal nature remains its hallmark. Way back in 1963 only 44% of those aged 65 and older were insured but 40 years later in 2003 less than 1% of those above the age of 65 lacked health coverage. The security that Medicare Offers its beneficiaries regardless of their health status is immeasurable. The coverage extension to people with disabilities and ESRD was another significant milestone. This cover for people with disability has improved access for those without a connection to the workforce and who cannot afford private insurance (AARP, 2005). Third there has been greater financial security for Medicare beneficiaries as a result of the program. Medicare has continued to shield the older Americans from potentially large acute health care expenses. This group compared with the young generation, require more health care resources and therefore spend highly on them. This program has lessened that financial burden of healthcare costs. In 1963 an individual spent 19% of his income on health care but immediately after the implementation the out of pocket expenditure dropped to 11% in1968. Today it continues to drop with less than 3% income spent of health care services. This shows that Medicare has really been effective and has achieved its goals to a large extent (AARP, 2005). Conclusion Medicare has continued to change people’s lives on a daily basis. The program has been quite successful since its inception way back in 1963. Despite a few challenges it faces, it has continued to be loved and appreciated by many. Critics of the program exist trying to taint the good image of the program but its advantages outweigh its disadvantages and therefore it has continued to receive support from the public. The program experiences some few problems of fraud in managing finances but it has put in mechanisms to see to it that compliance is achieved. So far the program is cost effective and efficient and has posted many positive results that continue to be appreciated. References AARP. (2005, July). Medicare at 40: Past accomplishments and future challenges. Retrieved October 25, 2011, from American Association of Retired Persons: http://assets.aarp.org/rgcenter/health/medicare_40.pdf Claude Pepper. (2010). Medicare and the Cost of Health Care in the 21st Century. Retrieved October 25, 2011, from The Claude Pepper Center: http://claudepeppercenter.fsu.edu/content/medicare-and-cost-health-care-21st-century CMS. (2011, August 08). About US: Mission Vision and Goals. Retrieved October 25, 2011, from Centers For Medicare and Medicaid: https://www.cms.gov/MissionVisionGoals/ CMS. (2011, September). What is Medicare. Retrieved October 25, 2011, from Centers for Medicare and Medicaid Services: http://www.medicare.gov/publications/pubs/pdf/11306.pdf Durham, S. E. (2010). New Medicare: Building on Medicare. Retrieved October 25, 2011, from APH: http://www.aph.gov.au/senate/committee/medicare_ctte/submissions/sub89att2.pdf HHS & DOJ. (2011). Learn More About Fighting Fraud. Retrieved October 25, 2011, from Stop Medicare Fraud: http://www.stopmedicarefraud.gov/ JHM. (2003, June). Is Medicare Cost Effective. Retrieved October 25, 2011, from Johns Hopkins Medicine: http://www.hopkinsmedicine.org/about/Crossroads/06_13_03.html Kaser, H. (2007, June). Medicare Spendig and Financing. Retrieved October 25, 2011, from Kaiser Family Foundation: http://www.kff.org/medicare/upload/7305-02.pdf Piper. (2011, June 6). medicare and medicaid compliance oig advice for operating an effective compliance program. Retrieved October 25, 2011, from Piper Reports: http://piperreport.com Read More