Health Insurance Reform

Health Insurance Reform

Due to the upcoming presidential election, the two major political parties and

their candidates have been focusing on the primary problems that the nation will face in

the future. Chief among those problems is the future of Medicare, the national health-

insurance plan. Medicare was enacted in 1965, under the administration of Lyndon B.

Johnson, in order to provide health insurance for retired citizens and the disabled. The

Medicare program covers most people aged sixty-five or older, as well as handicapped

people who enroll in the program and consists of two health plans: a hospital insurance

plan and a medical insurance plan. Before Medicare, many Americans didn't have health

insurance coverage, but since its inception the program has enrolled almost forty million

beneficiaries, who jointly fund the insurance program along with the national

government.

According to Dr. Don McCanne, a member of the Board of Directors of

Physicians for a National Health Program, before the passage of Medicare in 1965, only

52% of persons age sixty-five and over had hospital insurance and less than 15% had

adequate health insurance. The Medicare program has improved access to healthcare and

improved the quality of life for millions of elderly members and has provided insurance

for millions of people with disabilities. By reducing the burden of large medical bills,

Medicare also has improved the economic status of the elderly. As Dorothy Price points

out, over its thirty-three year history, Medicare has channeled billions of dollars into the

health care system helping to foster enormous improvements in health care technology

and medical education. Unfortunately though, the program is now facing two major

problems: beneficiaries are still having trouble in finding affordable care and the

Medicare program itself is not properly funded.

As a result of these problems, the program could cease to exist unless a solution

is found. One of the problems of Medicare itself is that it doesn't cover the costs of

prescription drugs for its members; this has led to one of the major reasons that the

program is in danger. A great deal of personal healthcare relies on the use of drugs and

since the program doesn't cover these costs, the individual must bear them. According to

the AARP (Association for the Advancement of Retired Persons), in 1999 out-of-pocket

costs for prescription drugs were estimated to be $450 per person each year. Obviously,

members have joined the program to defray their medical costs, but these figures indicate

that they still have large costs to pay.

The other problem faced by the Medicare program is that it is also suffering from

a lack of funds. According to president George W. Bush, the financial health of Medicare

is in serious jeopardy and might face deficit as soon as 2010. As a result of these

major problems, one might wonder why the plan isn't scrapped for another program; well

according to polls done by the Public Agenda, an Internet public policy site, American

citizens are strongly in favor of Medicare and would rather see the problems ironed out.

Therefore it is necessary to come up with a solution, so that the Medicare program

remains intact. The most favorable solution for these problems is for the national

government to alleviate the out-of-pocket costs of the beneficiaries by funding the

Medicare program through the use of the national budget surplus.

As of now, funding for Medicare has been provided through payroll taxes and

social security taxes paid by enrolled members and their employers and also through

general revenues provided by the government. In fact, statistics provided by the United

States Senate and Senator William Frist indicate that Medicare members fund 25% and

the government covers the other 75% of Medicare costs. However, using revenue from

the budget surplus would take the pressure off the beneficiaries and the government as

well, by steadily lowering payroll and social security taxes. Another important reason that

makes this proposal worthy is the fact that the national budget surplus will continue to

increase beyond 2010. In fact, according to George W. Bush, the budget surplus is

expected to grow well past $5 trillion over the next 10 years. Considering the fact that

Medicare expenditures project to cost around $452.2 billion over that same period, there

will be plenty of