Policy Issues-Medicare

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Since its inception in 1965, Medicare has been providing social insurance for Americans aged 65 and older and has expanded its coverage to younger people with disabilities and people with end stage renal disease and ALS. This article from Wikipedia provides a comprehensive overview of Medicare's history, recent legislation, and issues on funding and sustainability:

http://en.wikipedia.org/wiki/Medicare_(United_States)

The three most recent Medicare related laws include the Balanced Budget Act of 1997; the Medicare Prescription Drug, Improvement, and Modernization Act of 2003; and the Patient Protection and Affordable Care Act of 2010.

Prior to 1997, Medicare coverage included Part A for hospital and inpatient services and Part B for outpatient care and physician visits. The Balanced Budget Act of 1997 allows beneficiaries to avail of "Medicare+Choice" or Part C plans, in which they receive their Part A and B benefits through private health insurance plans. This means that members can opt for additional benefits not covered under traditional Medicare such as dental care, vision care and gym or health club memberships by paying an additional monthly premium. In exchange, the patients' choice of providers is typically limited within the network provided by insurance plans; going outside the network may incur additional fees.

The Medicare Prescription Drug, Improvement, and Modernization Act of 2003 allows for the inclusion of prescription drug coverage (Part D) either as a stand-alone Prescription Drug Plan or as a Medicare Advantage Plan, which includes prescription drugs and other coverage provided by Part C. Like Part C, Part D is essentially designed and implemented by private insurance companies, though it is regulated and approved by Medicare. Patients are given the freedom to choose which drugs or drug classes they wish to cover and the level of coverage they require.

Finally, the Patient Protection and Affordable Care Act of 2010 was enacted in an attempt to reduce costs through several mechanisms. Payments to privately managed Medicare Advantage plans were reduced to more closely approximate payments under traditional Medicare. Annual increases in payments to physicians and hospitals serving a greater share of low-income patients were also slightly reduced. An Independent Payment Advisory Board was created to provide ...