The history of Medicare starts with a law. President Lyndon B. Johnson signed Medicare into law on July 30th, 1965.
Since then, many acts continue to help protect beneficiaries. As time progresses, Congress continues to make changes to the national health care program.
Millions of Americans depend on the federal Insurance program, as they have for over 50 years.
Many revisions and different acts have impacted Medicare beneficiaries over time; today, we’re witnessing the most positive changes for consumers.
The program is beginning to focus on the best interests of its members.
Below, we’ll discuss each “act” that has impacted Medicare history since it’s inception. Then, we can go over the full history of Medicare Advantage and Supplemental plans.
The name “Medicare” initially addressed a program that provided medical care for military families as part of the Dependents Medical Care Act in 1956.
In 1961, President Dwight D. Eisenhower held the first White House Conference on Aging. During this meeting, the introduction of a health care program for social security beneficiaries.
Before the establishment of the Medicare program, getting private health insurance was near impossible for people over the age of 65.
Since the program became law, in 1965, it’s helped improve the quality and overall lifespan of seniors (and those with disabilities) in America.
Today, roughly 64 million American adults use Medicare for health care coverage.
Of those Americans, over 52 million are seniors ages 65 and older. The remaining individuals are younger and many with disabilities such as ALS and end-stage renal disease.
When did Medicare Start
In the Year 1965, President Johnson signed the bill that eventually became the Medicare and Medicaid federally funded programs.
In the program’s early stages, Part A paid for hospital and other inpatient services, and Part B paid for outpatient office visits.
Medicare paid for the materials and prescription medications used in either setting.
Meaning, if a nurse administers a drug during an inpatient stay, Part A covers the costs. When in an outpatient setting, any medications during the visit Part B includes.
Back in History, Medicare didn’t pay for ANY prescriptions.
Medicaid coverage was (and still is) an assistance program for low-income families, including children and caretakers’ relatives.
Medicare eligibility extended to people under the age of 65, with long-term disabilities (and those with ESRD) under the Social Security Amendments of 1972.
During this time, the program added more coverage for benefits like physical, speech, and chiropractic therapy.
How Medicare Started
Before Medicare, only 60% of seniors over 65 had health insurance coverage. Due to lack of availability and high prices, seniors often paid three times as much for coverage than younger people.
In 1966, a year after Medicare began – thousands of hospitals, waiting rooms, and doctors offices pushed the end of segregation by making payments to providers no matter the racial background.
The history of Medicare expands for just over half a century and, the program undergoes constant changes and updates.
America’s Healthy Future Act (Baucus Amendment)
The “Baucus Amendment” protects consumers and their policies. However, there were people taking advantage of this program from both the consumer and insurance sides.
To fight this, the government introduced the Medicare and Medicaid Patient and Program Protection Act in 1987; this would make providing false medical information to become a felony crime.
Medicare and Medicaid Patient and Program Protection Act
As the eighties came to a close, the government passed several other acts to enforce further and protect Supplement coverage.
Medicare Catastrophic Coverage Act
One of these acts was the Medicare Catastrophic Coverage Act. This act implements several restrictions to further protect consumers, such as out of pocket maximums and premiums.
During this time, several voluntary guidelines became mandatory standards by the federal government.
One of the most vital standards was the limits on preexisting conditions that could cause a person exclusion from a plan. After passing a few acts, the previous rule saw an amendment.
Omnibus Consolidated and Emergency Supplemental Appropriation Act
The last act to be passed in the nineties was the Omnibus Consolidated and Emergency Supplemental Appropriation Act of 1999. The most important part of this act called on the providers that paid these specific plans.
With the passing of this act, they were now subject to civil penalties. As the 2000s began, this coverage continued to change.
In 2001, the government looked to protect those that experienced sudden life changes or other changes to their health insurance policy status.
Consolidated Appropriations Act
Under the Consolidated Appropriations Act of 2001, these users were able to purchase new supplemental coverage.
This act made sure any preexisting conditions that had exclusion from the previous policy were also an exclusion from the new plan.
Medicare Prescription Drug Improvement and Modernization Act
Prescriptions became a point of discussion for coverage in 2003. The Medicare Prescription Drug Improvement and Modernization Act changed the way Medigap policies treated drugs.
Depending on the plan, some could keep their old policies while others took the option to purchase new coverage. Those that had to buy new insurance had protection from rising premiums.
The federal government made it illegal for the plan provider to take into account the buyer’s past claims, health records, pre-existing conditions, and other issues to calculate the premium.
It was after the passing of the Medicare Prescription Drug Improvement and Modernization Act that the federal government introduced two additional Supplement plans.
These new plans offer two features:
- Maximum out of pocket limits
These were the only two plan options that had to include these features. However, there were plenty of Medigap plans available from Plan A to N.
As the coverage evolved and new legislation changed the requirements and guidelines, some of these plans became obsolete. For example, after 2010, Plans E, H, I, and J were no longer valid.
Genetic Information Nondiscrimination Act
Another turning point for Medicare Supplement coverage came in 2008 with the introduction of the Genetic Information Nondiscrimination Act. This act made it illegal for a health insurance plan provider to discriminate against genetic information.
All of these acts in the long history of Supplement insurance brings us to our current standardized Medigap insurance plans.
Currently known as the third generation of plans, the three groups of coverage have been meticulously adapted and changed throughout the years since their creations.
If you’re new to Medicare, a great resource we have is Medicare for Dummies.
Medicare Part C History
Medicare Advantage plans or Part C are private plans that date back to 1966. Part C plans were higher risk contracts; the policies agreed to take responsibility for their members’ health costs.
Of course, each Part C plan requires a monthly premium expense before covering costs. Subsequently, Part C or Medicare Advantage replaces Parts A and B.
However, these private plans work with a limited network of doctors and facilities. Beneficiaries using out-of-network providers must pay the costs of service.
The history of Part C was to provide healthcare at an affordable rate while offering more benefits than Parts A and B offers.
Still, to this day, Advantage plans offer beneficiaries equivalent to or additional benefits to members.
Specific Part C plans provide coverage for prescription drugs. Stand-alone drug plans weren’t available until the early 2000s.
Medicare Part D History
Part D plans weren’t available until 2006 after the Medicare Modernization Act of 2003 created a plan to help pay for the cost of medications.
The Act went into effect on January 1, 2006. Ten years later, in 2016, roughly 42 million people have Part D coverage.
The drug program funds about 2 billion prescriptions each year, which accounts for almost $90 billion in Medicare costs.
In 2019, Part D is the most abundant federal program that pays for prescription medications.
Since the history of Part D, the plan has become quite popular among beneficiaries. In more recent years, Part D spending has outgrown the rest of the Medicare programs.
Medicare Trustees expect this trend to continue to increase over the next decade. Part D provides help to pay for medications – the structure of the program may put beneficiaries at risk of high costs.
Initially, Part D included a gap between the original insurance coverage and a particular benefit point called catastrophic coverage.
The Affordable Care Act of 2010 filled that donut hole. Meaning, brand-name drug manufacturers were ordered to give a 50% discount on any drugs purchased during this phase.
Then, the federal government covers an additional part of the drug expense.
The newest update in the History of Part D happens in 2020. Next year, the government covers up to 75% of the costs when beneficiaries spend a specific amount on prescriptions within a year.
History of Medicare Supplement Coverage
Standardized Medigap policies have been part of Medicare history since 1992.
Some beneficiaries still have coverage under non-standardized plans, which the government issued before July 1992. However, these plans are no longer available to new enrollees.
Supplement Insurance provides extra coverage to Medicare. Medigap covers things like copays, coinsurance, and deductibles.
Ten specific benefit letter-plans are permitted by federal law as Medigap policies. In 2006, they added two more plans.
The Medicare Prescription Drug, Modernization, and Improvement Act (MMA) affected Medigap insurances. At first, Medigap sold plans A-L to any Medicare beneficiary over the age of 65.
Companies that offer supplement plans must all provide the same basic level of coverage.
As with most things involving Medicare, changes occur over the years. The most recent include Hospice coverage under Plan K.
These plans are no longer available for anyone eligible for Medicare AFTER January 1, 2020.
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