Free Social Welfare Programs: Medicare Research Paper Example

Type of paper: Research Paper

Topic: Medicare, Health, Business, Services, Money, Taxes, Information, Government

Pages: 5

Words: 1375

Published: 2021/02/20

Social welfare programs include various governmental programs that protect the citizens from different life insecurities and economic risks. Primarily, the programs provide benefits to groups such as the elderly, the sick, the dependent survivors, and the unemployed individuals (Marx, 2010). Methods of administration, coverage, and financing, however, vary extensively among the different countries. The typical characteristics of a welfare program include the eligibility criteria, population covered, benefits’ levels, and funding system. In the US, health services for the poor include amenities for the war veterans, women, Native Americans, and children. The federal government further supports a national network of various community health centers with the aim of supplementing the private physicians’ services. Medicare is the second predominant domestic program among the various social programs.

Issues addressed by Medicare

Medicare covers primary health services such as the care in infirmaries, physicians’ services, preventive services, diagnostic examinations, and an outpatient prescription medication that is offered through different private agreements. In principle, the program addresses the health issues, due to financial constraints, facing the US citizens above the age of 65. According to Medicare Interactive (n. d.), however, younger citizens with disabilities or suffering from particular illnesses, such as Amyotrophic Lateral Scelerosis, are eligible for Medicare services. Nonetheless, the coverage gaps and potentially high costs are becoming a growing concern. Essentially, Medicare does not recompense for services such as dental care, hearing issues, and vision challenges, which are staggeringly expensive.

Specific Policies and Trends

In the light of the program’s inclusive fiscal challenges, various policymakers have conveyed their concern regarding the current payment system. They have also shown discontent with the fairness employed by the Medicare Advantage in the provision of extra benefits to beneficiaries (American Medical News, 2007). Most of the Medicare enrollees lack Medicare Advantage registration and, therefore, do not acquire the extra benefits offered by such plans. Accordingly, the climacteric issues that policymakers are likely to encounter in the future include the challenge of attaining sensible balance among different Medicare goals. For example, they might face difficulties in keeping the Medicare program fiscally sturdy, meeting the beneficiaries’ health care requirements, and setting satisfactory disbursements to private plans.
Although Medicare is extremely popular, it faces multiple challenges and issues. One of the primary obstacles involves identifying the most appropriate technique for financing the future generations’ healthcare without unduly burdening the taxpayers, beneficiaries, and economy. In 2007, nearly 2.3 trillion dollars was utilized in the health care of US citizens, and the care cost continues to expand at an astronomical rate. In the same year, the 432 billion dollars spent on the Medicare program accounted for over three percent of the US’ gross domestic product (Ranawat et al., 2008). As a result, the increasing concern regarding the rate of healthcare expenditure has coerced third-party remunerators and policymakers to evaluate new solutions for addressing the cost-control issues. The cost-cutting approaches that the legislators have put forward include the liability reform, gain sharing, and performance emolument. Such schemes are expected to yield a significant impact on conventional healthcare delivery. In the recent past, the lawmakers have made multiple attempts to curb Medicare’s growing budget. Nevertheless, minimal attention has been given towards promoting healthcare reforms such as the fixing of the Medicare’s defective schedule of the physicians’ reimbursement fee. The Medicare program’s financial solvency has become a critical domestic concern and cause of heated discussions. Another tenacious issue involves the purpose of Medicare’s private plans in relation to the speedy enrollment progress in the recent years. Multiple concerns have also been elicited due to the existing disbursement method of private plans. Moreover, the legislators and policy makers face issues related to the relatively novel prescription drug benefit. For example, they face the dilemma of addressing concerns regarding the program’s current structure and spending burden (Ranawat et al., 2008). Finally, there is increasing challenge in the making of health and long-term care relatively more affordable for the enrollees in the light of the rising cost of healthcare services.

Establishment and Current Form

Medicare was a Democratic vision for several decades. In 1934, President Franklin Roosevelt attempted to create government-regulated health insurance but failed to win the support of the Republicans. In the 1950s, the Democrats presented a reformed plan to deliver health care exclusively to the aged. In1962, President John Kennedy buttressed the proposal, but his subsequent assassination mired attempts to authorize the bill. Eventually, President Lyndon Johnson succeeded in establishing the Medicare program in 1965 (Oliver, Lee, & Lipton, 2004). Initially, there was a far-flung objection to the program, particularly from the Republicans and health industry. However, some of the Republicans finally supported the measure in return for various concessions that would strengthen the functions of physicians and private insurance businesses that participate in Medicare program.
Presently, Medicare covers the hospital care for the individuals older than sixty-five years and subsidizes their drugs, as well as doctors’ services. However, nearly all senior citizens remunerate monthly premiums for particular parts of the Medicare system. Furthermore, they typically enroll in an extra insurance program, Medigap, to cover out-of-pocket expenses. In 2010, the overall Medicare bill reached 524 billion dollars, which represents 15.2 percent of the federal government’s outlay (The Week, 2011). The Week (2011) points out that the Medicare costs will increase at nearly 5.4 percent annually and reach the 1 trillion dollar mark by the early 2020s. The American workers are required to recompense 2.9 percent of their annual emolument in Medicare taxes, but their contributions do not cover more than half of the program’s budget. Hence, an elderly couple with typical earnings may recompense nearly 140,000 dollars during the individuals’ lifetimes but can expect to gain approximately 430,000 dollars in Medicare benefits (The Week, 2011).

Program Structure

The modern Medicare program has four distinct sections, and each of the divisions is financed differently. The different sections have specific flows of premium payments, taxpayer subsidies revenue, and intricate cost-sharing deals (Moffit & Senger, 2013). The Part A of the program is Hospitalization Insurance, which pays for the infirmary and residential healthcare services. The program derives its finances from the Medicare’s 2.9 percent payroll levy, which is divided equally between the workers and employers. Furthermore, the insurance benefits are often premium free except for the individuals that have failed to pay the Medicare payroll taxes sufficiently (Moffit & Senger, 2013).
The Medicare’s Part B is the program on Supplementary Medical Insurance. It funds the outpatient medical services, pays the doctors, and covers the payment of particular drugs, such as the physician-infused chemotherapeutic drugs. The insurance is financed through a combination of the federal taxpayer subsidies and beneficiary premiums. The federal taxpayers subsidies derived from typical revenues pay nearly seventy-five percent of the program’s entire costs, whereas the beneficiaries recompense about twenty-five percent of the premium costs. Unlike the Part A of the program, which has stable funding stream founded on the payroll levies, the Part B’s outlays are covered routinely by the overall revenues from business and federal income taxes (Moffit & Senger, 2013).
Part C is the Medicare Advantage that comprises regulated and competing private health plans. The system enrolls approximately twenty-seven percent of Medicare beneficiaries and receives its finances from a combination of the federal payments and Part B premiums. Unlike conventional Medicare, the payments forwarded to Part C are based geographically on a method of competitive bidding to deliver the Medicare benefits of Parts B and A (Moffit & Senger, 2013). However, the actual payments do not utilize the complete market bidding technique but are often benchmarked to the existing administrative Medicare payments. The rebates feature of Medicare Advantage allows the system to provide the beneficiaries with comprehensive coverage. In particular, its plans limit the out-of-pocket costs and, hence, eliminate the requirement for the beneficiaries to obtain distinct extra insurance (Moffit & Senger, 2013). Moreover, multiple Medical Advantage plans incorporate the prescription drug coverage.
The Part D is the prescription drug program, which offers complete drug coverage for the Medicare enrollees through a method of competing private plans. Virtually ninety percent of seniors possess drug coverage, and almost sixty percent of aged citizens obtain their coverage through the prescription drug system (Moffit & Senger, 2013). Compounding the federal taxpayer subsidies and Part D premiums provides the necessary funds for the program. Nevertheless, the federal revenues constitute about eighty percent of the program’s costs. Unlike the Part C of Medicare, the Part D’s payments are based exclusively on competitive bidding procedure among the different competing plans (Moffit & Senger, 2013).
Medicare is administered by the “Centers for Medicare and Medicaid Services (CMS)” (Brown, n. d.). In the administrator’s office, the acting administrator is Andrew Slavitt, whereas his acting deputy is Patrick Conway, who is also the Chief Medical Officer (CMS, 2015a). Additionally, Mandy Cohen holds the position of the Chief of Staff.
The Chief Operating Officer, presently, is Tim Love, whereas his deputy and Chief Information Officer is David Nelson (CMS, 2014). “The Office of Operations Management, Office of Information Services, Office of Acquisition and Grants Management, Office of Financial Management, Offices of Enterprise Management, Offices of Hearings and Inquiries, and the 4 Consortia are under the Chief Operating Officer” (CMS, 2014).
The determination of Medicare eligibility, as well as the collection of various premium payments, is conducted by the Social Security Administration. Cost projections and accounting data are provided by the CMS’ Chief Actuary to the Medicare Board of Trustees. Presently, the Chief Actuary position is held by Paul Spitalnic (CMS, 2015b). The office has various divisions that enhance operation of the actuarial section of the CMS. The divisions are the “Medicare and Medicaid Cost Estimates Group,” the “Parts C&D Actuarial Group,” and the “National Health Statistics Group (CMS, 2015b).” The information presented by the Chief Actuary helps the board in determining the financial status of Medicare. Consequently, the law requires the board to provide yearly reports regarding Medicare Trust Funds.

Senator Grassley’s Perspectives

The Iowa’s Senator Grassley has presented legislation aimed at applying the licensing and accreditation standards for Medicare’s Orthotics and Prosthetics (O&P) devices (Grassley, 2015). According to Grassley (2015), the objective of O&P Improvement Act is to ensure product quality for the beneficiaries of Medicare, as well as the diminution of fraudulent activities. Grassley (2015) explicates that medical equipment such as prosthetics and orthotics devices attracts considerable fraud in Medicare. Hence, the improvements in licensing and accreditation will eliminate the counterfeit products. Additionally, the enactment will benefit the patients who rely on such devices for their health and protect the taxpayers from the risk of supporting fraudulent equipment’s procurement (Grassley, 2015). The statute is anticipated to transform the Medicare’s equipment standards and accredit various companies for the supply of prostheses and orthotics. However, the bill will continue to apply the existing licensure and accreditation requirements to particular prostheses and custom-fitted orthotics (Grassley, 2015).

My View

The Medicare’s present structure typically influences its operations and often draws particularly undesirable consequences. For example, the program employs price controls to regulate various costs and often causes the overpayment or underpayment of medical services. Another negative aspect is that it generates several billions of dollars in fraud and waste yearly (Moffit & Senger, 2013). The program’s disbursement system also causes politicization of vital services such as healthcare delivery. Although Congress should ratify the inclusive reforms founded on a specified contribution system, the prevailing temporary measures can ameliorate the structure of the current program. For example, the Medicare’s Parts A, D, and B can be unified to form a single plan, whereas the program’s cost-sharing can be restructured (Moffit & Senger, 2013). Additionally, the reconstitution of Medicare-Medigap association can help to limit the unwarranted medical services’ utilization that raises beneficiaries’ taxpayer costs and premiums.

Improvement Suggestion

The CMS, which oversees the Medicare system, faces substantial challenges in the implementation of payment methods. Medicare is a high-risk package because its enormous size and vulnerability to improper payments have established various managerial challenges (Ranawat et al., 2008). As such, the improvements of payment systems and the program’s safeguards can address management issues. For example, the CMS should lower the payments for particular self-referred services. The agency should also ameliorate its Medical Advantage’s risk score adjustments by employing current data. Additionally, the organization should develop plans for the validation and utilization of the Medical Advantage’s encounter data.
Issues and questions regarding the Social Security Administration can be addressed by calling the toll-free number 1-800-772-1213. Additionally, the most expedient method for obtaining relevant forms and specific information, such as the locations of the closest SSA offices, is to visit, which is the Social Security's website (Brown, n. d.). Individuals with Medicare, as well as caregivers and family members, should check the latest information on the website. The site provides useful information concerning Medicare claims, enrollment, medical records, and benefits. Alternatively, calls to 1-800-633-4227 will allow individuals to talk with customer care officials and receive the relevant assistance (Medicare, n. d.). Moreover, the contacts can be used to air any dissatisfaction with Medicare services. However, the most effective way to make recommendations for a policy change is to write to the Administrator at the address: “Centers for Medicare & Medicaid Services; 7500 Security Blvd; Baltimore, MD 21244-1850” Medicare (n. d.).
In conclusion, taxpayers face a grave financial difficulty because Medicare continues to consume an increasing amount of the federal income taxes. Consequently, the taxpayers may expect relatively higher costs of drug entitlement. Medicare reform, therefore, is required to reduce the taxpayers’ burden. The Medicare Advantage should also be improved to correct the typical unfairness in the program. Additionally, Medicare in its present form is unsustainable and requires significant changes to ensure affordable and adequate health care coverage for the aging patient population.


American Medical News (2007). Medicare health plans' unfair advantage. Retrieved from
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CMS. (2015b). Office of the Actuary. CMS. Retrieved from
Grassley. (2015). Grassley, Warner introduce bill to improve standards for orthotics, prosthetics in Medicare. Grassley. Retrieved from
Marx, J. (2010). Current issues and programs in social welfare. Retrieved from
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Medicare Interactive (n. d.). Am I eligible for Medicare if I am under 65? Medicare Interactive. Retrieved from
Moffit, R. E. & Senger, A. (2013). Medicare’s outdated structure—and the urgent need for reform. The Heritage Foundation. Retrieved from
Oliver, T. R., Lee, P. R., & Lipton, H. L. (2004). A political history of Medicare and prescription drug coverage. Milbank Quarterly 82(2), 283–354. DOI: 10.1111/j.0887-378X.2004.00311.x
Ranawat, A., Nunley, R. M., & Washington Health Policy Fellows. (2008). Issues facing America: Medicare. Retrieved from
The Week. (2011, May 6). The problem with Medicare. The Week. Retrieved from

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