9:15Due to the upcoming presidential election, the two major political parties, and their candidates, have been focusing on the primary problems that the nation will face. Chief among those problems is the future of Medicare, the national health-insurance plan. Medicare was enacted in 1965, under the administration of Lyndon B.
Johnson, in order to provide health insurance for retired citizens and the disabled (Ryan). The Medicare program covers most people aged 65 or older, as well as handicapped people who enroll in the program, and consists of two health plans: a hospital insurance plan (part A) and a medical insurance plan (part B) (Marmor 22). Before Medicare, many Americans didn’t have health insurance coverage, but since its inception the program has enrolled almost 40 million beneficiaries, who jointly fund the insurance program along with the national government (Carnegie). According to Dr.
Don McCanne, a member of the Board of Directors of Physicians for a National Health Program, Before the passage of Medicare in 1965, only 52% of persons age 65 and over had hospital insurance and less than 15% had adequate health insurance (McCanne). The Medicare program has improved access to healthcare and improved the quality of life for millions of elderly members, and has provided insurance for millions of persons with disabilities. By reducing the burden of large medical bills, Medicare also has improved the economic status of the elderly. As Dorothy Price points out Over its 33 year history, Medicare has channeled billions of dollars into the health care system, helping to foster enormous improvements in health care technology and medical education (Carnegie). Unfortunately though, the program is now facing two major problems: beneficiaries are still having trouble in finding affordable care, and the Medicare program itself is not properly funded. As a result of these problems, the program could cease to exist unless a solution is found.
One of the problems of Medicare itself is that it doesn’t cover the costs of prescription drugs for its members; this has led to one of the major reasons that the program is in danger. A great deal of personal healthcare relies on the use of drugs, and since the program doesn’t cover these costs, the individual must bear them. According to the AARP, in 1999 out-of-pocket costs for prescription drugs were estimated to be $450 per person each year (AARP). Obviously, members have joined the program to defray their medical costs, but these figures indicate that they still have large costs to pay. The other problem faced by the Medicare program is that it is also suffering from a lack of funds.
According to Governor George W. Bush, the financial health of Medicare is in serious jeopardy and might face deficit as soon as 2010 (Bush). As a result of these major problems, one might wonder why the plan isn’t scrapped for another program; well according to polls done by the Public Agenda, an Internet public policy site, American citizens are strongly in favor of Medicare, and would rather see the problems ironed out (Public Agenda). Therefore it is necessary to come up with a solution, so that the Medicare program remains intact. The most favorable solution for these problems is for the national government to alleviate the out-of-pocket costs (such as the costs for drugs) of the beneficiaries by funding the Medicare program through the use of the national budget surplus.
As of now, funding for Medicare has been provided through payroll taxes and social security taxes paid by enrolled members and their employers, and also through general revenues provided by the government. In fact, statistics provided by the United States Senate and Senator William Frist (R-Tenn. ) indicate that Medicare members fund 25% (about $45/month), and the government covers the other 75% of Medicare costs (Frist). However, using revenue from the budget surplus would take the pressure off the beneficiaries and the government as well, by steadily lowering payroll and social security taxes. Another important reason that makes this proposal worthy is the fact that the national budget surplus will continue to increase beyond 2010.
In fact, according to George W. Bush, the budget surplus is expected to grow well past $5 trillion over the next 10 years (Bush). Considering the fact that Medicare expenditures project to cost around $452. 2 billion over that same period (Bush), there will be plenty of money still available for military, education, and other government expenditures. Obviously, if the budget surplus were to decrease or remain stagnant over this time, it would be very costly to maintain Medicare under this proposal, but due to the budget’s optimistic (to say the least) outlook, the proposal is very sensible and effective. Perhaps the only other alternative to Medicare itself would be for the government to adopt a centralized form of healthcare, similar to the one employed in Canada.
In that program, every citizen would be entitled to the same benefits regardless of age, disability, or unemployment. Although this program seems like it would be for the best, it would take many years to implement the system. Legislation for a major issue such as healthcare normally spans several years (Frist), and is one reason that the government and neither party has ever brought the idea to the forefront. Furthermore, the financing for a public healthcare plan would shift more to the people since the government would be realizing all of the costs. Although still in use in Canada, the public healthcare system caused quite a scandal in the late 1980’s in the province of Alberta.
In order to make up for the enormous costs accrued by the program, restrictions were placed on the amount of drugs that were to be prescribed by physicians (Marmor 97). This raised many concerns over the program and its lack of medical ethics. In fact, many organizations in Canada have formed coalitions to prevent incidents like this from occurring. One such coalition, the Friends of Medicare, was instrumental in helping pass the Canada Health Act in 1994 (Marmor). The Act is designed to ensure that Canadians receive comprehensive medical care at no cost. As mentioned earlier, most Americans would rather see the Medicare program revamped instead of replaced.
One of the measures that the government took was the establishment of the Medicare HMO (health maintenance organization). This program was designed to allow HMO subscribers the ability to use any hospital or physician. Previously, patients who contracted with HMOs were only allowed to use hospitals and physicians under contract with that HMO provider (Marmor 192). As a result, many people feared that HMO’s were more worried about money, then the health of its subscriber.
With the advent of Medicare HMO, many more people subscribed to different providers. According to the Medicare HMO Internet site, the total membership of HMO’s has risen to over 7 million people as a result of its partnership with the Medicare program (MCOL). The problem with the HMO is that it is an even more private form of healthcare insurance then Medicare, and therefore costs more to the individual. Whereas much of the spending for Medicare is provided by payroll taxes, many employers do not even contract with health maintenance organizations due to cost (Ryan).
Therefore, subscribers must pay more in premiums each month, then the estimated $45 monthly Medicare charge. By using revenue from the budget surplus to cover Medicare costs, the national government would be benefiting itself, as well as Medicare subscribers. As previously mentioned, payroll taxes and social security taxes, current sources for Medicare funding, would be considerably lower and more elderly and disabled persons would be able to enroll in the program. The money from the budget surplus would be used primarily for out-of-pocket expenditures, such as prescription drug costs, as wells as to finance hospitals and medical technology. The government would benefit because of a stable national health-insurance plan, and due to a rapidly increasing budget surplus which figures to increase well over $5 trillion over the next ten years.
This allows the government to take care of other major problems areas such as education, crime, and the armed forces. Although there are other alternatives such as switching to a more centralized form of medical care or relying on a more private form of medical care, each has several important problems. The time spent on legislation dealing with a public healthcare system, combined with moral aspects of the system make it less appealing. Likewise, added costs and insurance premiums for individuals, and the heavier financial burden on the government make the private system less desirable as well.
Based on these facts, the best solution would be to reform the Medicare program through budget surplus financing.Annotated Medicine Essays