Question

Summarize the legislation that introduced Medicare and the

funding source for the program.
Discuss some of the changes that have occurred in the Medicare
program since its inception.
Describe the demo

Answer 1

Medicare was established in 1965 to aid seniors with medical care, funded by payroll taxes and premiums. It has evolved, impacted by demographic changes and healthcare cost inflation, with other government-funded programs providing services to low-income individuals, veterans, and children.

Step-by-step explanation:

Introduction to Medicare Legislation

In 1965, Medicare was established through legislation as a comprehensive health coverage program aimed at assisting citizens aged 65 and older with their primary medical care needs. It was introduced as part of the Social Security Act of 1965 and was signed into law by President Lyndon Johnson. Since its inception, Medicare has undergone various changes and expansions to adapt to the needs of its beneficiaries.

Funding Sources for Medicare

Medicare is composed of four parts, each with distinct funding mechanisms:

1. Hospital Insurance (HI) - Funded largely through a dedicated payroll tax of 2.9% of earnings, split equally between employer and employees.
2. Supplementary Medical Insurance (SMI) - Funded by beneficiary premiums and general revenues; premiums cover about 25% while the remaining 75% comes from general revenues.
3. Medicare Advantage - Funded through the Hospital Insurance and Supplementary Medical Insurance trust funds.
4. Part D prescription drug benefit - Funded through the Supplementary Medical Insurance trust fund, with beneficiary premiums and general revenues.

Changes and Challenges in Medicare

Since its creation, Medicare has progressed significantly with the inclusion of Medicare Advantage, and later, the Part D prescription drug benefit. The introduction of the Affordable Care Act (ACA) also brought changes to Medicare, modifying payment rates and coverage options. One of the main challenges that Medicare faces is the rising cost of healthcare, which is growing faster than inflation, paired with demographic shifts that are increasing the beneficiary population, with projections indicating an increase from 47 million in 2010 to 80 million by 2030.

Government Involvement in Healthcare

The U.S. government has been instrumental in healthcare for decades, with Medicare and Medicaid forming the core of government-funded healthcare programs. These programs are part of the government's role to "provide for the general Welfare" as authorized by Congress's constitutional rights and legislative powers.