II. PAYING FOR HEALTH CARE IN THE UNITED STATES
A. A Brief History of Managed Care
B. The Founding of Medicare
III. INTRODUCING THE MEDICARE MODERNIZATION
ACT OF 2003
IV. RATIONING HEALTH CARE UNDER MEDICARE
An enduring duality continues to define the debate over how to pay for American health care. On one side stands the traditional American ideals of individuality and personal autonomy; these strong cultural values support the idea that our accomplishments, including our ability to pay for our own health care, should reflect personal effort rather than the benefits of a charity state. (2) On the other side stands the evolving belief that health care represents a "public good." (3) As such, the need for health care may be considered a basic need, like food or shelter, and there may even exist an innate right to such care.
In many ways, our current system of private commercial insurance epitomizes these ideals of individuality and personal accomplishment. Private insurance policies are acquired either as part of an employment package or purchased from a private insurer at personal cost. (4) Whether structured along managed care lines or traditional fee-for-service, these policies generally delineate with care a list of supported services for which the policy will pay. The policy may only partially cover the cost of a particular treatment in which case the remaining costs incurred become the responsibility of the individual.
In contrast, Medicare was born in the era of President Lyndon B. Johnson's "Great Society." (5) Its passage marked a commitment to the idea that ensuring adequate health care for the American populace was more an issue of societal merit than personal economic resourcefulness. Even so, that commitment was far from unanimous and the birth of Medicare also marked the beginning of an enduring and public debate over health care as a matter of social justice or market economics. (6) Increasingly, the question of continuing national health care coverage would turn on whether health care constituted a public good "differentiated by society for its own highest purposes, not a business to be exploited" or a matter of market economics, to be shaped by "the fundamentals of our political economy--capitalistic, pluralistic, and competitive." (7)
Both systems struggle to cope with rising health care costs today. The cost of private insurance has placed it outside the reach of many individuals. (8) Rising premiums have also made it impossible for many small corporations to continue to offer employer-sponsored health insurance which has resulted in a steady increase in the number of uninsured Americans since 2000. (9) Furthermore, recent studies suggest that uninsured Americans who later become eligible for Medicare benefits often incur greater health care costs than those who had been insured prior to attaining Medicare coverage status. (10) Approximately forty-seven million Americans went without health care insurance coverage in 2005. (11) Another sixteen million Americans had insufficient health care insurance coverage. (12)
Similarly, the escalating cost of Medicare expenditures has become legendary. Current Medicare costs total approximately $374 billion, which is equivalent to fourteen percent of the federal budget. (13) Medicare costs are expected to escalate to $524 billion by 20l1. (14)
The trend in coping with these rising Medicare costs has been to increase the role that private insurance plays in providing coverage for Medicare recipients. Much of this movement towards an increased "privatization" of Medicare has been born of the belief that the private sector of health care insurance coverage has been made more efficient by existing market forces and will provide a way to both continue providing health care to elderly Americans while containing Medicare costs through these increased efficiencies as exemplified through the managed care model. …