Academic journal article Health Care Financing Review

Medicare at Forty

Academic journal article Health Care Financing Review

Medicare at Forty

Article excerpt

INTRODUCTION

This year marks the 40th anniversary of the Medicare Program. When it was enacted 40 years ago, more than one-half of the elderly were uninsured (Merriam, 1964; Rowland, 1991). Many of the elderly lost their health insurance when they retired. Private insurance companies were reluctant to write comprehensive policies for the elderly out of a concern for adverse risk selection; available policies often limited coverage, exempted pre-existing conditions, and offered inadequate protection (Davis and Schoen, 1978).

Medicare was designed to eliminate financial hardship from medical bills for elderly Americans and ensure access to needed care (Ball, 1995). For 40 years, the program has been essential to the health and economic security of the Nation's sickest and most disabled people. It is one of the most widely supported government programs among voters of all ages and achieves higher levels of satisfaction among beneficiaries than among adults under age 65 with employer or individual private health insurance (Davis et al., 2002). Addition of preventive services and prescription drugs are helping to fill the gaps in Medicare's original benefit package.

Yet, the program faces serious challenges. Expenditures are projected to rise more rapidly than the tax revenues that support the program, necessitating increased tax rates, reduced benefits, and/or a rising share of the Federal budget devoted to financing health care for the elderly and disabled (U.S. Congressional Budget Office, 2003). This fiscal pressure will intensify as the baby boom generation reaches retirement after 2010. Nor are beneficiaries well-prepared to bear health care costs not covered by Medicare.

This article briefly summarizes beneficiaries' satisfaction with Medicare and its track record in ensuring access to care and providing financial protection to beneficiaries. It concludes with the challenges posed by retirement of the baby boom generation and rising health care costs, and presents policy options that would both improve coverage and care for beneficiaries and use Medicare's leverage as a major purchaser of health services to improve quality and efficiency in the health system for all Americans.

Beneficiary Satisfaction

Medicare beneficiaries are much more likely to report high satisfaction with their health care and their health insurance coverage than non-elderly adults (Table 1). Eighty-seven percent of aged Medicare beneficiaries report being very or somewhat satisfied with the quality of health care received in the past 12 months, compared with 81 percent of those with employer coverage, 79 percent of those with individual coverage, 87 percent of those under age 65 with Medicaid coverage, 80 percent of the Medicare disabled, and less than one-half of the uninsured (48 percent).

Medicare beneficiaries are also more likely to report being very or somewhat confident that they will get the best medical care available when they need it (Table 1). Aged Medicare beneficiaries report more choice in where to go for medical care, compared with non-elderly adults.

Medicare beneficiaries are much more likely to rate their insurance as excellent or very good, than are those covered by employer plans or individual coverage. Two-thirds (68 percent) of elderly Medicare beneficiaries rate their insurance as excellent or very good, compared with 44 percent of those with employer coverage, 41 percent of those with individual coverage, and 54 percent of those with Medicaid coverage.

The high satisfaction of beneficiaries with coverage is also reflected in the importance beneficiaries attach to qualifying for Medicare coverage. The Commonwealth Fund Survey of Older Adults found that almost three-fourths of Medicare beneficiaries (age 50-70) said that it was very important to become eligible for Medicare (Collins et al., 2005a). This was particularly true of disabled Medicare beneficiaries age 50-64, 84 percent of whom said it was very important to become eligible for Medicare. …

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