Medicare Reform

Since Medicare was enacted in 1965, it has provided health care security to millions of America's seniors and people with disabilities. As successful as the Medicare program has been, it has not always kept pace with the vast improvements in the health care industry. For instance the lack of a better prescription benefits that was just recently improved. Medicare faces serious financial challenges, and is forced to make the best use of today's modern health care delivery methods to maximize the benefits for current and future participants to address the long-term stability of the program. The improvements the the President has addressed will greatly lengthing the time of the Medicare program existence.

The original Medicare was created in 1965 contains two parts. The first part was referred to as Part A. Medicare Part A covers inpatient care in hospitals, including critical access hospitals, and skilled nursing facilities, not unskilled or long-term care. It also covers hospice care and some home health care. The beneficiaries must meet certain conditions to receive these benefits. Most people age 65 or older who are citizens or permanent residents of the United States are eligible for free Medicare hospital insurance (Part A). The beneficiaries must be age 65 or older, receive or are eligible to receive Social Security benefits, railroad retirement benefits, and the beneficiary or spouse has paid into Medicare taxes for 40 quarters.

Medicare Part B covers doctors’ services, outpatient hospital care, and some other medical services that Medicare Part A doesn’t cover, such as some of the services of physical and occupational therapists, and some home health care. Medicare Part B helps pay for these covered services and supplies when medically necessary. It also covers some preventive services. Most beneficiaries pay the monthly premium of $88.50 in 2006 for Medicare Part B. The beneficiary also pays a $110 Part B deductible each year before Medicare starts to pay its share. Anyone who is eligible for free Medicare hospital insurance (Part A) can enroll in Medicare medical insurance (Part B) by paying a monthly premium. If they are not eligible for free hospital insurance, they can buy medical insurance, without having to buy hospital insurance, if they are age 65 or older and they are a U.S. citizen or a lawfully admitted non-citizen who has lived in the U.S. for at least five years.

The Balanced Budget Act of 1997 (BBA) created Part C or Medicare Advantage formerly known as Medicare+ Choice (M+C). Under the BBA, beneficiaries are able to receive their medical care under Medicare Part A which covers inpatient hospital care, Part B which covers physician services, and home health services, or the new Medicare Part C, hereafter referred as M+C. Beneficiaries are eligible to receive medical services through a M+C plan if they are covered under both Medicare Part A and B. However, there will be a short grandfathering period for beneficiaries that are eligible only for Part A to enroll in a M+C plan. As of January 1, 1999, beneficiaries have M+C coordinated care plans, including HMOs, with or without point of service options, provider sponsored organization plans and preferred provider organization plans. Also M+C medical savings account (MSA) plans, a combination of high deductible M+C health insurance plans and a contribution to an M+C MSA.

In July 2001, President Bush gave a summary of the following principles for Medicare reform. All seniors should have the option of a subsidized prescription drug benefit as part of modernized Medicare. Modernized Medicare should provide better coverage for preventive care and serious illness. Medicare should provide better health insurance options, like those available to all federal employees. The final Medicare reform bill added a long-sought prescription drug benefit, place a greater reliance on private, managed care health plans to provide Medicare benefits, make many changes to provider payments and regulatory processes under fee-for-service Medicare, and allow all Americans, not just Medicare beneficiaries, to contribute to tax-free Health Savings Accounts. These reforms constitutes the largest reform of the Medicare program since its beginning in 1965 and will clearly change how seniors and people with disabilities receive Medicare benefits.

On January 1, 2005, Medicare began covering these three new preventive benefits and a one-time “Welcome to Medicare” physical exam for people new to Medicare. Medicare has defined this appointment as a one-time preventative visit within the first six months that you have Part B. The visit includes a thorough review of your health, education and counseling about the preventive services needed, such as certain screenings and shots, and referrals for other care. Also cardiovascular and diabetes screenings were added to the group