Happy Birthday, Medicare!by Denise Early on Jul. 30, 2010, under Health
Today, the U.S. Department of Health and Human Services celebrates the 45th anniversary of Medicare, the Federal health care program that guarantees health security and coverage for people over 65 and younger people with disabilities.
“Forty-five years ago today, President Lyndon B. Johnson signed Medicare into law, giving former President Harry S. Truman and his wife Bess the first Medicare cards as the first enrolled beneficiaries,” said Health and Human Services Secretary Sebelius. “Today’s Medicare builds on the promise made by President Johnson and provides more than 44 million seniors and people with disabilities with guaranteed health care benefits and higher quality care than ever before.”
Since Medicare was first enacted in 1965, Medicare has had a history of improving and strengthening the program. The Balanced Budget Act of 1997 offered Medicare beneficiaries new coverage choices through Medicare Part C, now known as Medicare Advantage. In 2003, the Medicare Modernization Act improved the affordability of prescription drugs through the Medicare Part D prescription drug program.
From a Department of Health and Human Services press release:
This year, the Affordable Care Act represents another step forward for the Medicare program. The law ensures that Medicare beneficiaries will continue to receive their guaranteed benefits and will provide new benefits and lower costs, including closing the prescription drug coverage gap, eliminating co-pays and cost-sharing for most preventive screenings and providing greater coordination of care among providers. In addition, the Affordable Care Act will extend the life of the Medicare Trust Funds.
Some of the improvements Medicare beneficiaries will see under the Affordable Care Act include:
Thousands in Savings by Closing the Medicare “Donut Hole”
More than 8 million seniors in 2007 hit the “donut hole,” which is the gap in prescription drug coverage in Medicare Part D. This year, eligible beneficiaries who hit the donut hole will receive a one-time, tax-free $250 rebate check. Beginning in 2011, the Act institutes a 50 percent discount on brand name drugs in the donut hole, and the Act will close the donut hole for all prescription drugs by 2020.
Reduces Unwarranted Subsidies to Insurance Companies
Today, Medicare pays Medicare Advantage insurance companies over $1,000 more per person on average than Original Medicare. These additional payments are paid for in part by increased premiums by all Medicare beneficiaries—including the 77% of seniors not enrolled in a Medicare Advantage plan. The Affordable Care Act puts Medicare Advantage plan payments more in line with the costs for the original Medicare program and provides new incentives for health plans that improve quality and enrollee satisfaction in Medicare Advantage plans. Medicare’s guaranteed benefits will be protected, and reducing these unwarranted subsidies will save Medicare more than $150 billion over 10 years.
Strengthens the Financial Health of Medicare
The Affordable Care Act strengthens Medicare by investing in fighting waste, fraud, and abuse and reforms payments to reduce harmful and unnecessary hospital admissions and health care acquired infections. The law also improves care coordination to improve patient safety and quality of care. Together, these proposals will extend the financial health of Medicare by 12 years.
Preventive Care for Better Health
The new law eliminates deductibles, copayments, and other cost-sharing for most preventive care in Medicare, and provides free annual wellness check-ups starting in 2011. Today, seniors must pay 20 percent of the cost of many preventive services and office visits.
Affordable Long-Term Care
The law creates a voluntary insurance program, which will provide a cash benefit to help seniors and people with disabilities obtain services and supports that will help them to remain in their homes and communities.
Control Chronic Disease
The Affordable Care Act makes critical investments in innovations that improve the quality of care that seniors receive such as medical homes and care coordination and improves the delivery of care for beneficiaries with one or more chronic conditions.
Promotes Better Care After a Hospital Discharge
The law links payments between hospitals and other care facilities to promote more effective transitional care following discharge from the hospital and encourages investments in hospital discharge planning.
Improves Quality of Care
The Affordable Care Act invests in developing and reporting quality of care measures across all providers to help beneficiaries make more informed choices among providers for the care they may need. The law also creates incentives to reward providers that meet quality goals or show significant progress in improving patient outcomes. This focus on quality improvement will move our health system toward one that rewards better care rather than more care.