Social Health Insurance in the United States

The Politics and History of Medicare

Government Health Insurance Options in the US

• Medicare• Medicaid• Child Health

Insurance Protection• State programs

What is Medicare?

• Government managed health care for seniors over the age of 65 and people with disabilities.

• Signed into law in 1965 by President Lyndon B. Johnson (Great Society)

How many people does Medicare reach?

• In 1966, 19 million people (approximately 10% of the population)

• In 2008, 45 million people (approximately 15% of the population-12% are elderly, 3% are disabled)

• In 2030, it will reach 79 million people• Almost half of those covered live in 10 states:

California, Florida, Illinois, Michigan, New Jersey, New York, North Carolina, Ohio, Pennsylvania and Texas

What Does Medicare Cover?

• Part A: Hospital Insurance

• Part B: Out-patient care, doctors visits and preventative health measures

• Part C: Medicare Advantage-privately run

• Part D: Prescription Drugs

Coverage changes over time

• Disability-1972

• Prospective payment for DRGs (1983)

• Hospice Care-1986

• Preventive care, Pap smears and Mammograms (late 1980s)

• Price controls for physicians-1992

• Prescription Drugs-2005

Detailed Medicare Spending

How is Medicare Funded?

• Payroll taxes (7.5%)• General Revenue support of

$179 billion dollars in 2007• Monthly Premium Payments

– $423 for hospital, $96.40 (up to $238.4) for outpatient

– In 1965, the premium for outpatient was $3, in 2000 it was $45.40

– Hospital premium free if you worked at least ten years in the US and paid taxes

Money, Money

• Medicare expenditures are expected to hit $486 billion in 2009, accounting for roughly 14 percent of the federal budget. Expenses are rising much faster than overall inflation and are on track to hit $887 billion by 2018.

Money, Money

• “The Federal Government is the biggest purchaser of health care services and a primary determinant of the cost of health care services in major segments of the US health care market” Charlotte Twight, Medicare’s Origin, Cato Journal

• In 2004, Fed Government spent $486 billion for Defense and $473 billion for Medicare and Medicaid

But Consumers still pay

• 20% co-pay on many items

• 50% co-pay on mental health

• Dentures, glasses not covered

• Up to $8,704 for a long (90 day +) illness in hospital (out of pocket)

Medicare is not Enough

Who Administers it?

• US Department of Health and Human Services– Center for Medicare

and Medicaid– Office of Medicare

Hearings and Appeals

The Politics

Politics

• “Medicare politics is now transparently a battle of ideas about the role of markets and governments in public policy…… As a consequence, after 37 years of policy innovations, political upheaval, changing economic circumstances and a radically altered health care system, Medicare politics is back where it started” Oberlander

Short History

• 1934- Franklin D. Roosevelt says health insurance plan would be forthcoming

• 1945-Harry Truman asks for a national health insurance plan

• 1966-Lyndon Johnson signs Medicare into Law

• 1970s- cost control, health inflation of 17%

• 1980s-Ronald Reagan equates Medicare to Socialism

More History

• 1993- Clinton tries to reform health care in the US.

• 1994, William Kristol convinced Republicans not to work with the Clinton White House to reach a compromise on health care reform

• “the long term political effects of a successful Clinton health care bill would revive the reputation of the party . . . as the generous protector of middle-class interests. “

More History

• 2003- Bush signs Medicare reform bill for prescription drugs:– “the greatest advance in

health care coverage for America's seniors since the founding of Medicare.”

• Bush vetoed a Medicare bill and Congress revolted, only 41 legislators approved the veto

Current Events• “The cost of our health

care has weighed down our economy and the conscience of our nation long enough, so let there be no doubt: health care reform cannot wait.”– President Obama,

2009

How did we get here?

• Post World War I backlash against Germans who started government national insurance plans

• World War II incentives to get people working centered around employer-based insurance (142 million covered by 1950)

How did we get here?

• AMA opposition to national insurance: denounced it as “socialized medicine”

• Historic American suspicion of “Big Government”

• Republican domination of White House and Congress

Socialized Medicine?

• “There is nothing in this bill which tells a doctor whom to treat and when to treat him….by which the Government would control the hospital and as I understand socialism, it is Government control” HEW Secretary Celebrezze 1965

Current Issues in Medicare

• Aging population, 79 million enrollees by 2030, double that of 2000

• Shrinking work force contributions

• Rising costs of health care

• Physician opting out

Current Issues

• “Medicare is totally unsustainable”

• “the country cannot afford Medicare as it is currently provided”

• “you’ve got a political battle when you try to control the costs of Medicare and even a bigger fight if you try to back track and take it away, its too politically popular.”

Political Action

• Protest• Advocacy• Legislation• Voting

representatives out of office if they don’t support Medicare

Political Actions

The Future

Obama’s proposed reforms• Requiring employers, except small businesses,

to provide health insurance to their employees or contribute to the cost.

• Requiring that all children have health insurance. • Expanding Medicaid and the State Children's

Health Insurance Program (SCHIP). • Creating a National Health Insurance Exchange

to pool risk and give people the choice of competing private or public health plans.