Medicare Reform’s Effect on the Elderly

Free «Medicare Reform’s Effect on the Elderly» Essay Sample

Health care in the United States was reformed in 2010 by President Barak Obama’s own initiative. The idea behind this reform was to make health care benefits better and to increase the quality of health care services across the United States. Costs had sustainable increased in health care costs, especially in public funded programs such as Medicare. Since its foundation in 1965, Medicare has provided health insurance for the elderly (ages 65 and older), but as the program’s costs increased President Obama insisted that in order to make the program viable and efficient changes needed to be made. The changes that Obama spoke about became a reality in 2010 when Medicare, along with the entire health care system was reformed. The rationale behind the reform was to decrease insurance payments/costs in order to increase coverage. Some sectors did not receive this reform well, as they feared it would compromise the quality and availability of health insurance for the elderly. The reality is that with this reform, Medicare has been restructured and optimized. The program has become more efficient and by 2020, will increase prescription-drug benefits and other additional health insurance enhancements.

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Medicare is the only publically funded health program for the elderly in the United States. However, this program has always been criticized given that it “reimburses only limited amount of long-term care costs, and most elderly people do not have private long-term care insurance” (De Nardi, French & Bailey Jones, 2010, p. 3). This means that under its original conception, Medicare was a program that required the elderly to make copayments for receiving medical treatment. Furthermore, the program was problematic insomuch it failed to fully cover prescription-drug costs for the chronically ill. Senior citizens, under the original regimen, were covered for only $2,700 USD per year. If the patient exceeded that amount in prescription-drug costs, coverage stopped. Paradoxically, coverage would restart if presciption-drug costs reached $6,154 USD.

Medicare was a relatively ineffective medical insurance program. This owed largely to the fact that Medicaid costs were much greater (meaning that government could not spend more on Medicare) and that health insurance providers were receiving excessive payments for the services rendered. Medicare was a program conceived for retirees, but the problem was that retirees did not have high savings. In consequence, the program became inviable and because of this President Obama decided to reform it.

With the new reform, which aims at restructuring the program, the governmnt expects to decreasae public spending in more than $60 billion over the next ten years. This obviously preoccupies certain sectors of society, especially the elderly, but they should not be. In the long run, this additional funds will go into their traditional Medicare benefits. Home health care costs will be decreased, as will be payment to hospitals, but the government’s intention is to focus on providing all of the country’s senior citizens enhanced medical insurance (including investment in preventive services) and enhanced prescription-drug benefits.

Another benefit for the elderly is that they will receive additional preventive health insurance benefits. The new Medicare contemplates preventive services as a means to further decrease health insurance costs. This is a new service that all Medicare beneficiaries will be entitled to, and it will be free of charge. The logic behind this additional service is to decrease public spending, of course, but also to foment healthier living and feeding habits for the elderly. Senior citizens are at higher risks of developing diseases and becoming disabled. This is something that Medicare is set on combating, because it is not enough to offer medical insurance, but also to contribute in the imrpovement of the elderly’s quality of life.

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A new, personalized prevention benefit for Medicare beneficiaries covers anannual well-ness visit, health risk assessment, and personal care plan, with no cost sharing. Starting 1 January 2011, Medicare will also cover clinical preventive services with A and B ratings at no cost to beneficiaries (Thorpe & Ogden, 2010, p. 1185).

Medicare has not been entirely perfected with this new reform introduced by President Barak Obama in 2010, but it seems clear that significant benefits have been created for the elderly. On this last point it is important to recall that one of the major problems with the progam has to do with the prescription-drug benefits it bestowed on benefitiaries. The original Medicare only covered $2,700 USD per year. Inexplicably, after that amount the coverage would seize until costs reached $6,154. Government claims that even though full coverage will not be made available (as there are not enough funds to do so), with the savings produced by the reform (over $60 billion USD over the next ten years) it will be possible to subsidize some of the costs that beneficiaries will have to sustain between the $2,700 USD and the $6,154. Government claims that by 2019 Medicare will be in the position to cover 75% of the costs situated between that gap. Studies have been conducted in order to determine if it would be possible for government to do this. The results back the government’s assertions, but they also point out what was already mentioned: funding will be decreased in other areas.

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We find that there are increases in spending on prescription drugs (as seen in Table 6) and on inpatient and outpatient hospital spending. However, there are sizeable reductions in office-based spending and home-health care (although only the latter is significant), and smaller reductions in spending in the other categories. (Engelhardt & Gruber, 2010, p. 30).

Medicare is not a perfect program. However, it is a program that offers medical insurance for the elderly (the most vulnerable cohort of the American society). In what concerns the medical reform introduced by Barak Obama in 2010, it can be stated that despite its shortcomings, it is a good reform that will made Medicare more efficient and will benefit more senior citizens in better and newer ways.


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