On July 30, 1965, President Lyndon Johnson signed into law title 18 of the Social Security Act. This amendment to the Social Security program is what subsequently became what we now know as Medicare.
Over time, the Medicare program has been changed, updated, and revised as new needs have evolved. For example, in 2003, President George W. Bush modernized Medicare to include a prescription drug benefit. As time has moved forward, President Barack Obama continues to update a national health insurance program in the United States.
But Medicare has gone through many changes over the years, beginning in 1972 when Medicare’s coverage was extended out to those who are severely disabled, as well as for those who suffer from end stage renal disease.
Additional legislation passed in 2003 known as the Medicare Prescription Drug and Modernization Act, or MMA 2003, also added major changes to the Medicare program – essentially adding an entirely new section, Medicare Part D, for prescription drug coverage.
In 2008, Congress enacted additional legislation titled Medicare Improvements for Patients and Providers Act, or MIPPA 2008. This act provided many generalized improvements in the Medicare program, but in particular it addressed changes to Medicare Advantage and Medicare Part D issues.
Many of these changes included those having to do with low income subsidy qualification, Private Fee For Service plan restructuring, special needs plans redefinition, physician payments, Medicare Advantage marketing guidelines, and Medicare Advantage plan payment reductions.
In 2010, the Patient Protection and Affordability Care Act, or ACA, was passed. This act created the first large scale reorganization of health care coverage and delivery in the U.S. Some of the provisions of this act included minor changes in the Original Medicare (Medicare Parts A and B), as well as to Medicare Advantage and Medicare Part D.
With regard to the Original Medicare, the ACA called for the elimination of the deductible and coinsurance for most preventive services under Medicare Part B that covers the services of physicians.
The other major change that ACA made to Original Medicare was that it must provide coverage for annual no-charge wellness visits, during which the beneficiary receives a personalized plan prevention service.
This annual wellness doctor visit will now be available to Medicare beneficiaries every year, once they have been in the Medicare program for at least one year and have received a Welcome to Medicare physical.
The ACA also enacted some changes to Medicare Advantage. These primarily had to do with cutbacks in Medicare payments to Medicare Advantage (MA) plans. The goal was to bring MA spending in line with Original Medicare’s fee-for-service structure of payments.
The Patient Protection and Affordability Care Act of 2010 also made some major changes to the Medicare Part D prescription drug program. Part of the act called for less plan availability because there were over 2,000 plans in existence. This was meant to help reduce confusion for agents and enrollees alike.
Another big change to Medicare Part D was a reduction in the “donut hole,” which is the point at which a plan participant is required to pay 100 percent of the cost of their prescription drugs. This was designed to help the Medicare Part D participant to arrive at the donut hole faster and thus to arrive sooner at the catastrophic benefit level. Here, Medicare Part D coverage will pay for nearly all of an enrollee’s prescription drug costs.
Moving forward, there may be more change on the horizon. Since older citizens account for over one third of all hospital stays, everyone may face the possibility of some very high medical bills while they are covered by Medicare – thus increasing the cost of Medicare delivery.