The American Medicare Beneficiary Program - Research Proposal Example

The American Medicare Beneficiary Program This discussion focuses on the federal governments program in Medicare. The world over, health matters take centre stage and is a major point of concern for virtually all governments. This has resulted in several discussions and attempts to ensure that the population can access quality health care in their locality more so at affordable rates. The issue of health care may be termed as sensitive in a number of ways. This is largely viewed as a matter of life and death. A healthy nation is seen to be able to move faster in economic an other matters. Various governments have therefore tried to come up with programs that cater for their health sector in the best way possible. A number of issues come into the picture when looking at the health of the populace. The size of the population, vise a vie the rate of economic growth is an important aspect to consider. By and large, it may be argued that the ability of a nation to o provide quality health care goes hand in hand with the growth of the economy. A survey of the developments of nations shows the most developed nations have a considerably better healthcare system than the less developed nations1. While looking into the whole issue of Medicare, it is noted that that a host of stakeholders make contributions to its successful maintenance. For the industry to attain credibility and professionalism, healthcare providers must be well trained. In this regard, the status of the institutions teaching various aspects of healthcare comes into the picture. These institutions must be well equipped in terms of facilities as well as personnel in order to carry out their duties efficiently. There are also other stakeholders such as medicine manufactures, public and private health insurances as well and more importantly the hospitals. Perhaps it would be important to insist on the issue of hospitals since these are the institutions that directly relate to the common citizen an the one that they associate with on almost a daily basis. Several aspects come up when considering the contributions of hospitals to the whole scenario. These relate to the ability of hospitals to handle certain ailments ,some of which may require specialization , the availability of these hospitals within considerable distances and more so the affordability in terms of cost. With such factors in mind, it becomes evident that Medicare provision is a matter at the heart of every citizen , and a concern for government. This discussion will thus focus on various aspects of the US Medicare program and the efforts that have been made to shape the sector as well as some concerns for the future. History of the Medicare Program It Must be understood that the journey to place Medicare at its current place in the federal government has been long and challenging in a number of ways. Before the 1967 enactment of the plan, the American people had been adamant to accept a plan that could see the government offer health insurance and more so to old people .However, there were several stakeholder inside and outside of government who visualized the possibility of such a plan coming into place for the benefit of the American people2. These individuals made all attempts and after several drafts that were taken through rigorous vetting processes, a plan was finally hatched. The programs development can be trace to as early as 1934 when President Franklin Roosevelt established the Committee on Economic Security (CES) and charged it with drafting a Social Security bill. This committee reported to the president that it was possible to come up and even sustain a health insurance plan .However, this recommendation was not immediately adopted and the president decided to postpone the health insurance issue. In fact, this led to the eventful change of the bill from Social Security bill to Social Security Board for fear that the plan would be jeopardized all together. With these considerations the social security bill while it was still in the legislative process. It is reported that even by 1969 the final CES report on health still had not been made public This nonetheless had not hindered the governmental advocacy of compulsory health insurance. In 1935 the Social Security Act was signed into law, with the back up of the Social Security Board (SSB) which was mandated to look into all the related areas of the scheme. At this point, an Interdepartmental Committee whose role was to Coordinate Health and Welfare Activities to pursue the health insurance issue was appointed by the president. Eventually, the Committee put in place a Technical Committee on Medical Care that was instrumental in formulating a comprehensive National Health Program3. Its findings were published in a report on February 1938 and the committee embarked o a mission to publicize the scheme. Social insurance was an emerging and developing phenomena in the US by this time. From this historical perspective it is evident that the Medicare plan was not achieved as a result o simple deliberations. It was a rigorous process that took the participation of several stakeholders for it to materialize. Basically the program is a national social insurance scheme that is provided by and administered by the U.S. federal government. The policy ensures that US citizens in the age bracket of 65 and above as well as younger people with various disabilities can access proper Medicare. The program is designed in such a way that financial risk is spread across the wider society in order to protect every individual. That way the program is seen to play a social role as opposed to making profits. Why the plan was established. The program was primarily aimed at ensuring that people who had worked the better part of their life in building the nation and had been rendered vulnerable by age could easily access health care. This group that had attained the age of 65 years and above was considered to be in danger of failing health in view of the fact that most of them had by this time stopped working and therefore had little income to sustain them. It was envisioned that the plan could reduce dependency at old age, In fact this was one of the strongest pillars upon which the plan was created. It was argued that leaving this group of persons without a health insure cover was tantamount to exposing them to real time catastrophes4. In other words there was the general rationale that avoiding dependence was a precognitive structure that ensured catering for the needs of the group. It was seen to put in place strategists that were expected to support families that had been otherwise entangled by the moral or legal, obligation to cater for the medical debts of their aged relatives. Status of the Current Federal Program Medicare is placed under the administration of the Centers for Medicare and Medicaid Services which works under the Department of Health and Human Services. However, there are several influential stake holders in the whole process. They include the Medicaid, the State Children's Health Insurance Program as well as the Clinical Laboratory Improvement Amendments. Other contributors to the administrative arm of the program include the Departments of Labor and of course the Treasury, In administering the program , all these participants play different roles. For instance, it is the responsibility of the Chief Actuary at CMS to provide all the necessary accounting details and cost of budgetary projections to the Board of Trustees5. This is expected to assist the board in assessing the financial stability of the program and make the necessary adjustments or proposals therein. The Board is legally bound to issue yearly reports on the financial standing of the program through the Medicare Trust Funds. One of the major requirements of these reports is that they should contain a statement of the Chief Actuary’s opinion Undoubtedly the program entrails so much that several interest groups have to be engaged for their role in the affair. In this regard CMS regularly contracts private companies to operate as intermediaries between the government and medical providers. In most cases, these contactors will be in the insurance or healthcare solutions. Their role is to look into the claims and payment processing, and other supportive elements such as the call center services, clinician enrollment, and fraud investigation. The program is one the government’s initiatives that is funded by different stakekholders. There is , for instance, what is referred to as Part A whose funding is primarily through revenue. In budgetary allocations its attracts 2.9 percent of the total tax levied on employers and workers. This contribution by the taxpayer is safe guarded or to some extent guaranteed in he constitution thorough the Federal Insurance Contributions Act (FICA).Other enactments relating to this program include the Self-Employment Contributions Act of 1954. Previously this law observed a total compensation that could be levied specifically as Medicare tax each year. However, in the beginning of 1994, this compensation limit was removed. One of the statutes held by this act for instance is that a compulsorily levy of 2.9 % on self-employed individual. It is considered that such persons are both employee and employer. However, half of the tax may be deducted from the income tax6. A few changes are forthcoming in the near future for these contributions. One of them is the requirement the application taxing the tune of 2.9% e levied on the individuals earning from US$200,000 or $250,000 for couples filing jointly. This amount is expected to increase to 3.8% on income that is beyond those amounts. Parts B and D of the scheme are primarily funded by premiums paid by enrollees and also from the general fund revenue. In some of the most recent statistics, the program took up 15 % of federal budget, a figure that is expected to increase to over 17 percent by 2020. The program is subdivided into various parts namely, Par A,B and C. Part A facilitates inpatient hospital stays or those who attend the facilities overnight and also include cases that may require semiprivate room, food, and tests. This part is enclosed for a maximum length of stay in a skilled nursing facility to 100 days per ailment. Here, the first 20 days are fully catered for by Medicare while the remaining 80 days requires a sharing. In case a beneficiary utilizes at least 60 days of their time outside a health facility, the 100 days are reset and the individual is eligible for a new 100 days pack. Other benefits included in this part are hospice benefits for terminally ill persons whose physicians have indicated would have less thanr 6 months to live.. On the other hand, insurance under Part B caters for some services and products not looked into under Part A and mostly on an outpatient basis. It is largely optional .However, there is a lifetime penalty (10% per year) that is accrued if one does not enroll in Part B except for person who are actively employed and even receiving health coverage from that employer. In 1997, the enactment of the Balanced Budget Act of 1997, underlined an option in which Medicare beneficiaries could engage private health insurance plans as opposed to the original Medicare plan (Parts A and B). This arrangement came to be known as Part C plans. This plan as further enhanced by the enactment of the Medicare Modernization Act of 2003, which included Medicare and Choice plans. Through this arrangement, beneficiaries could access prescription drug coverage or what is commonly referred to as Medicare Advantage (MA) plans. This arrangement is generally offered through private companies7. The companies have come to be known as Medicare Advantage Organizations (MAO). They are all contracted by CMS and are required to provide an comprehensive compliance program that tares care of eventualities such as Fraud, Waste and Abuse issues in healthcare settings. The population that is covered by this scheme is notably different from the general population. One of the conspicuous difference is that most persons enrolled into this program are spread across white and female substructures. The description given for this phenomena is the seemingly longevity of the female lifespan. It is also argued that this group has compromised us economic situation: These observation are edged o a certain background. First, going by the latest detailed study of the Medicare population in 2006, the average household estimated inome of Medicare enrollees was placed at about $22,600. This greatly differed from the country’s median income of which was placed at $48,201. By the year 2008, an average 16% of Medicare enrollees were generally living a poor lifestyle while the general poverty level was estimated at 13% .The study further indicated that on average , every man would need $124,000 to cover health care during retirement, while the average woman needs $152,000. However, in an average senior household has there has been only about $66,900 in savings8. Out of this population, women were seen to exhibit a slightly higher costs on average ($3,236 compared to $3,103).Of a notable concern is that the sustainability of older enrollees was relatively higher. The complexity of the matters explained in the Medicare program has brought about several court battles that have seen various interpretations come into play. In the case of Federal Aviation Administration v. Stanmore Cawthon Cooper, the Supreme Court was set to determine the legality of one government agency can disclosing the health status of a government employee to another agency. In the case, the Social Security Administration violated federal law by sharing a pilot's medical records with the Federal Aviation Administration. This case was instrument in influencing adherence to national privacy laws, such as the Health Insurance Portability and Accountability Act. In one of the most recent developments, on this issue the e Supreme Court vacated the Ninth Circuit decisions and remanded the cases for further proceedings .The cissue in this court was to determine whether the beneficiaries of Medicaid and providers may invoke a Clause that challenges the claiming of insufficient reimbursements to health care providers by states.In such a situation , the case held the situation would cause a threat to health care access to health care thus violating the federal Medicaid Act. Major Issues Concerning the Program One of the major concerns of the program is its budgetary consumptions . Statistics indicate that in 2007 alone, an estimated $2.3 trillion was spent on health care. It has also been demonstrated that the cost of health care continues to grow at a considerably high rate. The 2007 figure estimates alone accounted for more than 3 percent of the U.S. gross domestic product (GDP). With such a reflection, policymakers other stake holders have been forced to evaluate new cost-control solutions. Some of the proposed measures include elements such as pay for performance, gain sharing, and liability reform. It is argued that these polices will have a tremendous impact on the traditional delivery of health care. In fact the general environment in which the program operates has experienced several attempts by stakeholders and in particular law makers to curtail Medicare’s growing budget. Of notable concern is the fact that other elements of the program such as fixing Medicare’s flawed physician reimbursement fee have largely been highlighted9. On the other hand, issues such as the financial solvency of the Medicare program continue to elicit heated arguments yet, the program is considered one of the most critical domestic issues facing of nation.Issues surrounding the whole spending perspective of the Medicare program have given rise to complex methods of reimbursing hospitals and physicians. For instance, a prospective payment system was established in 1983 to cater for cost-containment for hospital reim­bursements. The result was the formation of diagnosis-related groups through which hospitals would be reimbursed based on set fees. Another issue surrounding this program is the Medicare reimbursement policy for doctors on the basis of a fee-for-service model. This policy was implemented on what is known as the Physician Fee Schedule (PFS) payment system. Although this system is largely criticized for flaws in its policies, third-party payers use it to formulate their reimbursement calculations. There is also the issue of expecting the Medicaid Services (CMS) to be lowered for the sake of maintain a balanced total level of reimbursement. This is looked at from the perspective that if volume decreases, the update is likely to be higher thus resulting into reduced costs of operation and eventually reflecting a lower budget for Medicare. Some of the latest signals of detrimental effects date back to 2002, when physicians received a 5.4 percent reduction due to the conversion factor. To a great extent this changed the sustained growth rate ( SGR) formula to an extent that it has all along been so pronounced that Congress has retreated to pass annual temporary measures ensuring that the system doesn’t completely fall apart. It wasn’t until 2003 that Congress gave CMS the power to fix any accounting mistakes made between 1998 and 1999. When the corrections were done the errors demanded that a further $54 billion be injected into the Medicare physician payment system thereby preventing further reductions in reimbursement by at least one year10. However, this legislation failed to look into the overall problems surrounding the program. For instance, there is the Provisions in the Medicare Prescription Drug, Improvement and Modernization Act of 2003 (MMA) which mandated CMS to accelerate the conversion factor by at least 1.5 percent in both 2004 and 2005. This provision failed in part to provide for additional funds to take care of this temporary measure. Consequently, the money used to fund the deficit increase must has to be paid back to the Medicare program, with interest, over the next 10 years. These monetary issues had not ended at that .In 2005, Congress again had to act when a Deficit Reduction Act repealed a 4.4 percent deduction which was effected on January 1, 2006, and froze the conversion factor at the 2005 level. The resultant frees was compensated by reducing reimbursements for other physician services such as imaging services. These examples of obvious flaws in the Medicare program have highlighted policymakers’ concerns through legislative initiatives aimed at curbing expenditures, Nevertheless, they fundamentally fail to look into underlying fundamental mishaps with the current PFS and SGR. If the trend that where there is a continued decreases in reimbursements is not addressed, it may prompt many doctors, especially specialty physicians, to reconsider their participation in the Medicare program. Perhaps the most considerate action is to reconstruct the flawed system which could possibly be done by sealing the gap between the PFS, SGR, and the GDP. In the present situation it is this gat that allows CMS to set what is referred to as an expenditure target for all physician. Quite often, this results into unstable payment systems., Primarily, the SGR system works on a cumulative basis whereby it compares cumulative expenditure targets with cumulative expenditure costs as opposed to dealing with than one year’s expenditure targets. Agreeably, this formula requires that any expenditures found in excess of what is necessary be reimbursed immediately. Under such circumstances, the system can hardy make sustainable maneuvers. In addition, the current system has been highlighted as inadequately accounted for in terms of costs and savings more so those that would be brought by new technologies and other general changes in service provision. The result is that Taxpayers are exposed to extreme financial woos since the re program especially in consideration of the fact that the scheme is expected to consume more than half of federal income taxes by 2042. This being the case, taxpayers must anticipate the costs of the drug entitlement to be much higher than what was published in previous estimates. The future of the Program By and large, Medicare may be seen as a rather typical large-employer plan with a considerably high deductible for inpatient care. From such a perspective, the program lacks a cut price on out-of-pocket spending. This increases the potential of exposing people to serious medical problems at extremely high expenses. Under such a situation it is important that some policy aspects of he program be reviewed in order to reflect the larger economic situations of the day. Although there has been arguments that some polices would raise the amount contributed by the older generation in today’s economy, the current law, as amended by the Patient Protection and Affordable Care Act One of the recent interventions to make this program work for the future is what has been come to be known as Obamacare. The plan dedicates $716 billion in Medicare payment cuts over the next 10 years. These deductions have been and aimed ensuring that the Medicare payment formulas for various facilities such as hospitals, nursing homes, home health agencies, hospice agencies, and Medicare Advantage plans. It has also been noted that this amount of money can not be used to pay the expenses of Obamacare and still maintain or even extend the life of Medicare trust fund11. This plan is also expected to raise Medicare taxes, particularly the Medicare payroll tax, which funds the hospital insurance (HI) trust fund. This plan will see high-income earners pay up to 3.8 percent. The percentage is also extended to include Medicare tax to investment income. This therefore becomes the largest tax increase in Obamacare that would see the taxpayers part with $318 billion from 2013 to 2022. There has also been proposal by President Obama Medicare changes in his fiscal year 2013 budget proposal whereby the Medicare Parts B and D, Obama’s would see an increase premiums by 15 percent for upper-income seniors12. These premiums are expected to increase by 2025 to cover 25% percent of all Medicare beneficiaries. This proposal is thus meant to increase on the number of seniors paying the tax. Moreover, there is a proposal in which e new fees on baby boomers joining Medicare beginning in 2017 would be an extra $25 increased Part B deductible for new beneficiaries all the way 2021 when there would be $100 payment for home health services in certain cases13. Perhaps the needs highlighted in this paper underlines the importance to curb the expenditure that arise from the program. Another proposal that is meant to enhance Medical is a proposal in which new out-of-pocket costs will be coupled with raised premiums for all Part D beneficiaries. On average a total of $48 billion is estimated to be spent by the Obamacare plan. For this reason there has been overwhelming disagreement among Americans may differ on Medicare reform or the right future for the program. However, one thing can be underscored, the plan will see senior citizens paying more in a number of ways. References Austin Frakt, Steven . Pizer, and Roger Feldman.2011 “Should Medicare Adopt the Veterans Health Administration Formulary?” Health Economics Cubanski, Desmond, Thomas, Rice, “How Much ‘Skin In The Game’ Do Medicare Beneficiaries Have? The Increasing Financial Burden of Health Care Spending. 2003. Health Affairs. Retrieved 06-12-2012 http://www.kff.org/medicare/med110107oth.cfm; K. Cubanski, Desmond, Thomas, Rice, “The Burden of Out-of-Pocket Health Spending Among Older Versus Younger Adults: Analysis from the Consumer Expenditure Survey, 1998-2003”, Retrieved 06-12-2012 Kaiser Family Foundation, September 2007; available at http://www.kff.org/medicare/7686.cfm. Cohen, Ball, 1965 "Social Security Amendments of 1965: Summary and Legislative History." Social Security Bulletin 28 (9): 3-21. Goodman, Johnstome.1980. The Regulation of Medical Care: Is the Price Too High? Cato Public Policy Research Monograph No. 3. San Francisco: Cato Institute Harriet Komisar, Juliette Cubanski, Lindsey Dawson, and Tricia Neuman, Key Issues in Understanding the Economic and Health Security of Current and Future Generations of Seniors.  Hoadley, Hargrave, Cubanski, Neuman. 2008“The Medicare Part D Coverage Gap: Costs and Consequences in 2007,” Kaiser Family Foundation Retrieved 06-12-2012 Fromp athttp://www.kff.org/medicare/7811.cfm Kaiser Family Foundation, “Examining Sources of Coverage Among Medicare Beneficiaries: Supplemental Insurance, Medicare Advantage, and Prescription Drug Coverage -- Findings from the Medicare Current Beneficiary Survey,” Retrieved 06-12-2012 From: http://www.kff.org/medicare/7801.cfm. Marsha ,Gold.2008. "Medicare Advantage in 2008," The Kaiser Family Foundation, June 2008 Rosenblatt, Roger Andrilla, Holly Curtin, Thomas; Hart, Gary., 2006 “Shortages of Medical Personnel at Community Health Centers". Journal of the American Medical Association (American Medical Association) Skidmore, Michael (1970) Medicare and the American Rhetoric of Reconciliation. Tuscoloosa, Al.: University of Alabama Press. Yamamoto, Neuman and Minell, Strollo, 2009. “How Does the Benefit Value of Medicare Compare to the Benefit Value of Typical Large Employer Plans?” Kaiser Family Foundation Retrieved 06-12-2012 Fromp athttp://www.kff.org/medicare/7811.cfm Read More