Medicare Law

The Law of Medicare – Defining How the Government Influences Your Medicare

  1. A Brief Highlight of History – The Beginnings of Medicare Coverage

As we look back on our history as Americans, you can see many consistencies between what the people want and what our government provides; however, some needs always seem to come forward more often than not – for example, originally, the push for Medicare was most realistically created from the long-running drive to create a health insurance all citizens could participate in, allowing those who can help to fairly balance those who may not have help, and creating an on-going support system for every new generation of seniors.

Presidents like Teddy Roosevelt, Harry Truman, and John F. Kennedy all showed significant interests towards creating such a system, tying it to essential portions of their campaigns and constantly attempting to apply pressure onto Congress for action; unfortunately, it wasn’t until Lyndon B. Johnson’s most stern application that only did “Medicare” come into existence, a program that would help the vast percentage of uncovered American seniors over the age of 65 to begin receiving the coverage they desperately needed.

Although prior assistance programs existed, they  did not account for the common citizen in most circumstances – those who were most needy or meeting very thin specifications could receive the federal or state assistance required, but the average person found that, as they got older, their medical expenses out-of-pocket were getting higher and higher (while their income was getting lower and lower, especially post-retirement.) Officially being applied to all citizens in 1966, after it’s sign into law in 1965, the provision into hospital and medical coverage, as well as having a feeling of security behind a lifetime of labor, made people could feel confident in keeping their health condition in good quality by using their coverage, overall creating a reduction of serious medical requests across the nation.

  1. Operations of the Medicare Administration – Recognizing Your Familiar Government Support

As just a portion of the greater U.S. Department of Health and Human Services, the Centers for Medicare and Medicaid Services, known by most as CMS, carries a huge responsibility for many of the social programs relied upon by a vast population of American citizens – over the years, this reach has extended quite recognizably, moving past having jurisdiction and administration over just Medicare and Medicaid; CMS now helps facilitate the transition of the Affordable Care Act coverage, assistance for the Children’s Health Insurance Program, and much more. 

By keeping record of and assessing the information gathered by CMS, the agency can continue to communicate with individual doctors, facilities, and insurance companies about how they must operate in correlation to the provisionary rulesets of federal Medicare – this mostly includes:

  • Involving how to charge for hospital and medical procedures
  • How to assess claims put forward by Medicare beneficiaries
  • Processing the payment of said procedures 
  • On-going customer service and assistance elaborating necessary information
  • Necessary investigations of Medicare fraud committed

However, creating a consistent value for the standard of costs can be somewhat difficult and careful, on-going process – therefore, a reasonable method needed to be created for CMS to continue operating in a reasonable frame of cost. Offering a solution, the American Medical Association gathered associated physicians to create the “Relative Value Update Committee,” which would provide the government regular insight into the levels of pay necessary for any procedures a citizen may need under their Medicare’s medical coverage; with this assistance, CMS can continue to more directly ascertain changing costs relating to a person’s hospital care, allowing the two separate groups to create a fair value sampling over time together.

Typically, the Social Security Administration (SSA) will act as a proverbial “face” of an individual’s Medicare, with responsibilities that pertain to enrollment, eligibility, and how much assistance you may get from your coverage (in the example of federal Extra Help for prescriptions.) Your communication with the SSA acts as a ley-line between yourself and the federal government, with the SSA providing numerous local offices around the country, a website, and phone numbers able to be contacted for further information; additionally, the Social Security Administration may have some oversight on the fees necessary and associated with keeping your Medicare eligibility in line, as the money paid in taxes towards the SSA during your lifetime gets recorded and accounted for.

  1. Financing the Federal Coverage – What Defines the System that Allows Medicare To Carry On

Every year, hundreds of thousands of dollars are required to help supplement the costs of individual medical procedures across the country, ranging from the smallest ordeal to the biggest hurdle of one’s life – our Medicare can be a lifeline, and it’s fair to wonder where the government can consistently get the kind of money to continue this system for everyone. Remember, Medicare (from it’s very basis) has been about building a system that would unite every citizen with one another to provide towards a greater purpose; those who put in place the rules and law surrounding Medicare sought to fairly assess both how and how much a person should pay forward their fair share – after all, if you were benefitting from Medicare benefits, you’d want to reap the rewards from the patience you’ve had following the guidelines (and for others to do the same as well.)

As such, Medicare’s “allowance” is divided into two separate trust funds under the possession of the U.S. Treasury, with each both receiving and delivering its money out to varying ends – a Hospital Insurance (HI) Trust Fund and a Supplementary Medical Insurance (SMI) Trust fund. 

  1. The first, being the Hospital Insurance (HI) Trust Fund, is funded primarily by a very recognizable reason to most people – it’s your social security tax! Employers, employees, and self-employed people all must submit a portion of their earnings towards this fund; typically, this amount is a relatively low percentage of a person’s earnings (1.45% to 2.9%,) but it allows for a good scaling of price across all incomes, as you’ll typically only pay “higher” by having more money to spend in the first place.

This primary revenue source above – along with some funding from trust fund investments and people forced into paying a Part A premium – provides the backbone of hospital coverage for Medicare Part A, including:

  • Skilled Nursing Facility
  • Home Healthcare
  • Hospice Care
  • Inpatient Hospital Care

Surprisingly, the HI Trust Fund neatly also serves to supplement funds necessary to operate most of the CMS needs, such as:

  • Employee benefits 
  • Collecting necessary Medicare taxes 
  • Any fees needed to properly challenge fraud
  • All other administration needs.
  1. The other, being the Supplementary Medical Insurance (SMI) Trust Fund, is a product of money being supplied between the government’s investment and an individual’s choice to supply towards it; with a much less steady value than its counter-part trust fund, the money within this hold is dictated by two factors – Congressional funding and the premiums of all enrolled Medicare Part B and Part D plans. 

Despite the variables of calculating a consistent amount, the straight-forward nature of this fund seems dull, but easy to understand – simply put, funds agreed upon and allotted by Congress every designated period, along with the premiums charged by Medicare Part B and Part D plans onto individuals, allow Part B and Part D to continue operating as intended. Medicare administrations, much like CMS or the SSA, attempt to keep a trace of all costs associated with Medicare for just his reason; for many legislators, making valid judgements about the amount of money raised via premiums in a period may create a discussion about how the money provided by Congress gets handled.

Some portions of Medicare, like Medicare Part C advantage plans, may not associated with the funding provided by these trust funds; remember, private healthcare organizations who offer medical coverage may have their own costs necessary to building a reasonable revenue between it’s client base. By paying the premiums, copays and coinsurances of these plans, you’re likely allowing the plan (and company) to continue being funded, which further, allows prices to generally attempt to stay the same.

  1. Governing Your Medicare – The Legislations and Alterations Across Our History

The timeline of events for Medicare, despite its signature into law happening only about half a century ago in 1965, can seem like a long road of many different and significant improvements to the system’s functions, foundation, and outreach – after all, the needs and standards of the American people are constantly changing to consider higher and higher heights, only naturally including our yearning for greater appeal in healthcare coverage for the majority of applicable in-need peoples. 

As such, different administrators of government saw fit that certain alterations be considered to the system of Medicare during their term; certain laws passed into legislation by the standing President or Congress of the time could build upon, and further define, a more detailed version of Medicare – this includes questioning what Medicare’s purpose is, how it may better sustain itself, and what other services Medicare should, or might be capable, of supplying.

While legislation can be very minute and specific, with some passages much less worth a small glance, there have been some significant changes throughout Medicare’s course:

  • Originally, Medicare’s provision was clear – to provide Americans, aged 65 and older, both hospital and medical coverage; this was provided by the automatic Medicare Part A, along with the voluntary Medicare Part B. However, in 1972, President Richard Nixon made the first big move for Medicare by acting in staunch support of those suffering from long-term disabilities, allowing many with lifetime struggles and ESRD to begin receiving coverage through Medicare for the very first time.
  • The year 1980 brought about multiple legislative modifications to Medicare’s structure, including the Medicare Secondary Payer Act and the Omnibus Reconciliation Act – 
    • The Medicare Secondary Payer Act was a legislative decision by Congress to more often place Medicare as a secondary payer rather than a primary payer for many private sources of coverage – this essentially allowed Medicare to pay less than needed in circumstances where private insurance should realistically be covering more costs.
    • The Omnibus Reconciliation Act, however, sought to bring more coverage to Medicare beneficiaries, expanding the recognition of home health services under Original Medicare. Additionally, the previously unregulated Medigap supplement plans were taken into federal jurisdiction, providing much more reliability and safety from private plans, as well as, providing a better communication between healthcare providers, their clients, and the federal government.
  • In 1988, the Medicare Catastrophic Coverage Act was approved by Congress, creating a legitimate limitation to the out-of-pocket costs a person could reasonably expect for expenses through Original Medicare; however, because of rising premiums due to its argument that a higher premium would be worth the cap on out-of-pocket expenses, the bill was shortly repealed (via the Medicare Catastrophic Coverage Repeal Act) only a year later by a displeased American public. In short, the legislative decision was seen as far too assumptive – while it could protect some from completely going broke in out-of-pocket expenses, majority of people felt they would not reach such a margin, all while still having to pay a much higher premium for the same coverage they had been receiving; the bill failed and helped give context to what might be most important to seniors moving forward.
  • Several legislative decisions between the 1980 to 90’s created the familiar system of levels for Medicare coverage based on how Medicaid for your state applies towards you – certain states were given the opportunity to “buy” their way into the Medicare system by using state Medicaid funds to assist the costs of very low-income Medicare beneficiaries. QMB, SLMB, QI, and so forth, are all recognized as legislative decisions that allowed our modern semblance of how Medicaid can greatly lower the costs of one’s Medicare expenses, so long as they were in the income situation that allowed it.
  • The Balanced Budget Act of 1997 brought about the advent of Medicare Part C advantage plans (originally named Medicare+Choice plans) – these plans would allow Medicare beneficiaries the opportunity, for the first time, to gather all their benefits into one place, on one plan, answering to one federally regulated private provider. 
  • 2003 was a year of massive change to Medicare – the signing of the Medicare Prescription Drug Improvement and Modernization Act brought about an entirely new portion to Medicare’s array, much like the inclusion of Medicare Part C – Medicare Part D. 

For the first time ever, many could seek out prescription drug coverage through private drug providers, all while still remaining within federal guidelines and protections that had been accustomed to from Original Medicare; by detailing plans with certain premiums and deductibles, individual drug costs could universally go down, creating an environment that had less seniors needing to pay exceptionally high prescription fees.

Furthermore, many Medicare Part C plans began to include Part D prescription drug coverage in accordance of this new law, giving many people their first opportunities at considering automatic drug coverage, with easy to manage and straight-forward costs all on a familiar network.

Most recently, during the term of President Barack Obama, has been the Patient Protection and Affordable Care Act of 2010 – a massive overhaul of healthcare law, it provided many tools, rights, and protections to those who did not currently or felt they could not receive healthcare coverage; through great focus on cost-reduction and application across as many citizens as possible, it’s considered the first significant push towards “universal healthcare,” redefining the potential for Medicare to cover far more than it already has.

References Used:

https://en.wikipedia.org/wiki/Medicare_(United_States)#History

https://www.healthcare.gov/glossary/patient-protection-and-affordable-care-act/

https://en.wikipedia.org/wiki/Medicare_Prescription_Drug,_Improvement,_and_Modernization_Act

https://www.cms.gov/Medicare/Coordination-of-Benefits-and-Recovery/Coordination-of-Benefits-and-Recovery-Overview/Medicare-Secondary-Payer/Medicare-Secondary-Payer.html

https://www.ssa.gov/history/ssa/lbjmedicare1.html

https://www.medicare.gov/about-us/how-is-medicare-funded

https://www.investopedia.com/terms/m/mcca.asp