A Forecast for Medicare Reform
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In early December 2003, the then president of the United States George W.Bush won the approval of the Congress for the implementation of Medicare Modernization Act (MMA) and he signed it into law on 8th December the same year in order to extend the endangered life the country’s Medicare programming. MMA is a major reform of the government sponsored program for health insurance covering American citizens aged 65 years and above, those less than 65 years and are physically disabled, and other citizens having special needs(Marilyn 2006). Significant Parts of MMA legislation involved the passage of various Pay for Performance (P4P) incentives and implementation of Part D (Prescription Drug Insurance). This legislation is famous as a far-reaching and significant overhaul of United States’ Medicare program to date. In the future, the MMA legislation will have diverse impacts on the Medicare program life.
First, this Act provided an expansion of the Medicare program through the creation of part D that include entire coverage of the outpatients’ prescription medicines. This expansion will have diverse and far-reaching impacts to the life of Medicare program. The seniors where almost all of them are very eligible for the new coverage and entire tax payers’ population will be greatly affected as the implementation costs of this legislation are quite prohibitive and continue on increasing. For instance, the Congress had initially pledged only $400 billion over a period of ten years to pay for the benefits costs of this legislation. This is merely a small down payment on the entire cost of this legislation cost, which could increase to trillions of US dollars. One study provides predictions that spending on health care in United States will increase to be 20% of the country’s GDP by 2015 ,growing from approximately $2 trillion in year 2005 to approximately $4 trillion by year 2015(Rick & Robert, 2006).As a result, taxpayers will continue to experience increased premiums over the years. Thus, a lot of criticism for this legislation will be experienced which will halt the life of the Medicare program.
Moreover, the MMA is showing very clear commitments to the entire private market to give solutions to various social problems, and this legislation will eventually shift all the costs from United States government and American employers to employees and individual citizens, particularly the elderly citizens. This is further affirmed by a recent study issue by actuaries and economists at the ‘Centers for Medicare and Medicaid Services’. It estimated that by year 2014,spending by the public sector on the health care will eventually account for approximately 50% of entire health care spending in United States which is an increase from 45.7% in year 2004(McClellan 2006). The study further stated that, this shift from United States’ private sector to Public sector is as a resulted of MMA legislation .This will negatively impact the life of Medicare.
The addition of prescription drugs benefits to the Medicare program that aids only one population segment, however deserving, leads to many questions about the intergenerational inequity and about the disproportionate allocation of resources. This will lead to a lot of criticism by the younger generation who will condemn the ever-growing deductions of their income being allocated to finance this Medicare program. Thus, the projected costs of this MMA program will be seen as life threatening to the working generations who have no access to this health care. They will try hard to condemn and remove this Medicare program thus affecting its life.
The funding of the Medicare program will be greatly affected by the retirement of many baby boomers in United States over the coming thirty years .This is because the share of public sector in costs for health care will exacerbate due to massive retirement of most of the financiers (Berenson & Bryan, 2004). Thus, MMA will affect the life of the Medicare program, as funding for the ever-increasing costs will experience a major blow in future which might extinct the Medicare program life. Thus, the MMA authorizes additional health care expenditures with minimal limitations.
The changes to the current Medicare legislation that will extend the life of the program beyond 2026 include Improvement of Medicare financing through implementation of different means to mitigate high financing burden left to the taxpayers. In addition, Medicare budget should be aggressively controlled to eliminate any loopholes and expenditures, which are unnecessary thus reducing program costs. Finally, more awareness on the importance of Medicare program to the society members should be done through seminars and mass media.
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