Medicare: An Imperative Support System



Medicare: An Imperative Support System

Introduction

Medicare, a state and federal government funded program, was introduced on July 3, 1965 by the Social Securities Amendment which was signed by President Johnson. This government entity was established to ensure that all Americans over the age of 65 and individuals under 65 with disabilities received government funded health care benefits and quality care (LBJ Presidential Library, 2012). Medicare is overseen by the Centers for Medicare and Medicaid Services (CMS), a federal agency that is part of HHS department (Department of Health and Human Services) and is funded through two trust funds.

These two funds HI (Hospital Insurance) trust fund and SMI (Supplementary Medical Insurance) trust fund are two accounts that are governed and held by the U.S. Treasury. Both these funds, HI and SMI can only be used to provide resources for Medicare. The HI trust fund is paid for through payroll taxes that are paid for by employers, employees or self-employed individuals, and sources such as income taxes paid on Social Security benefits. The SMI trust fund is paid for by funds allocated by the Congress, individuals part of Medicare Part B (supplementary insurance plan in which premiums are collected), and Medicare Part D (prescription drug plan coverage) (Centers for Medicare and Medicaid Services, 2013). Over the past 68 years, there have been several changes to the program. Of these changes, a few of them have been milestones in forming what is currently Medicare.

Discussion

Drastic Amendments to Medicare

In 1966, private insurance companies were assigned to be in charge of benefit payments and bill processing for Part A (the hospital insurance coverage) and Part B of the Medicare program. One additional milestone in the program occurred in 1972 when President Nixon signed an amendment to Medicare increasing its spectrum to include ...