Essay Example on Medicare: Federal Health Insurance Program for Seniors Above 65

Medicare was first enacted in 1965 as a part of the federal health insurance program for seniors above the age of 65 regardless of their health status, medical history and income (Kaiser). The Medicare program legitimized the role of the government public policy to fund the public health care of its population and spearhead crucial innovations health policies (Brown 163). The enactment of the Medicare act guaranteed essential health care for citizens above the age of 65 which spared their next kin against financial burden. In 1973, the program later expanded to include persons with a long-term disability regardless of their age, which ensured such vulnerable groups were protected from avoidable pain, financial stress and painful death. However, the future of the program is under threat due to the rising cost of medical care and the baby boomer the primary funders of the program gaining eligibility.

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The Medicare program assists a substantial number of vulnerable citizens in the population to pay for medical costs services varying from prescription drugs, hospitalization, physician visits, hospice care, skilled nursing facility and home health care. According to Kaiser, all these medical care services in 2017 accounted for 20% of the national spending and 15% of the federal spending. Despite such massive allocations, in 2016, the Congressional Budget Office (CBO) argued that the Medicare Trust Fund will attain insolvency status by 2026 (Moffit). Such prediction is attributed to the rising population of Medicare beneficiaries and the cost of treating each beneficiary compared to the general population contribution and the GDP (Gross Domestic Product). The increasing costs are argued to cause long term budget problems and will most likely to affect the taxpayers negatively and the quality of health Medicare beneficiaries receive.

The rising costs of providing health care for Medicare recipients is argued to cause severe budgetary deficits which might render the trust fund insolvent. Such predicaments are unavoidable as the CBO predicts Medicare spending to double from $707 billion annually to $1.5 billion over the next decade (Moffit). Arguably, not even the largest economy is in a position 'foot' such budgetary deficits given that the Medicare Payment Advisory Commission argue such increments would have consumed all federal reserves by 2039 inclusive debt interest. The depletion of the federal reserves is further argued to even occur earlier than 2039 given that the 'Obamacare' is argued to squeeze out $800 billion from the Medicare reserve in the next decade. With such negative financial projections, experts argue that Medicare beneficiaries in the future will be limited to health care access if the financial burden isn't placed on taxpayers.

It is essential to note that the majority of the working population fund Medicare trust through their income deductions and Medicare deductions. The enactment of 'Obamacare' in 2010 was aimed at increasing any future increment on health dedications on the 'rich'. Definition of the rich persons under the care fund involved families that earned a combined income of $250, 000 annually and that of individual income of $200, 000 (Moffit). Despite this tax brackets, the policy failed to articulate for inflation meaning that out of every five workers, four of them are to fall victims of health tax cuts. Such policy shortcomings will greatly affect the young population will be tasked to fund an underfunded Medicare trust fund.

Part of the financial burden placed on the taxpayers is based on Medicare 'fee-per-service' model which in expert laymen language means the more services rendered to patients, the more services charged (Minarik). With no proper control in this system, physicians and facilities are justified to send a bill to the taxpayers provided there is an incentive that benefits a Medicare patient. As such, a "capitated prepayment" system has been suggested as an alternative model where an insurance company has its facilities and team of doctors and physicians under contract. The alternative model utilizes medical personnel under contract in that there is no additional cost is billed whenever an individual service is added to the treatment. This eliminates the incentive to charge on any additional service offered for the benefit of the patient since they are salaried employees

Although experts highly recommend the "capitated prepayment" model, the traditional Medicare model of 'fee-per-service' is still the most preferred. Such is because the alternative model doesn't advocate for the expansion or inclusion of additional physicians whenever a need arises it is tailored to reduce medical costs. Undeniably, the alternative model doesn't align with Medicare beneficiaries needs who often suffer from an array of chronic diseases and due to their vulnerability nature require personalized special care. With the traditional Medicare being deemed the most relevant, inevitably the financial deficits will mean increased tax and Medicare cuts for working families. Such is because the Medicare Trust fund is a public policy act and the major source of revenue for the federal government is taxes. Therefore, the financial future of Medicare is reliant increased taxes on income tax and increased Medicare cuts.

Works Cited

Brown, Lawrence D. "The Politics of Medicare and Health Reform, Then and Now". Health care financing review 18.2 (1996): 163.

Kaiser, Henry J. "An Overview of Medicare"; Kaiser Family Foundation, 2019, kff.org. Web July 27, 2019

Minarik, Joseph. "What's Right, What's wrong with Medicare"; Committee for Economic Development, 2019, ced.org. Web July 27, 2019

Moffit, Robert E. "Medicare's Big Challenges Threaten Seniors and Taxpayers Alike"; The Heritage Foundation, 2018, heritage.org. Web July 27, 2019