Medicare Policy Process Brandy Marsh HCS 455 December 12, 2011 John (Jay) Cutspec Medicare Policy Process The health care, policy-making process is composed of three major stages; the formulation stage, legislative stage, and the implementation stage. The policy process refers to the specific decisions and events that are required for a policy to be proposed, considered, and finally either implemented and/or set aside. It is an interactive process with multiple points of access providing opportunities to influence the multiple decision makers involved at each stage (Abood, 2007).
Each stage presents a unique set of events for a policy to be proposed, considered, and either implemented or rejected. In the formulation stage there is an input of ideas, information, and research from government officials, citizens, and special interest groups. The issue is framed and the purpose and outcome is defined. Finally strategies are chosen and the necessary resources are identified. In the legislative stage the policy must be discussed by congress, agreed on and signed into law.
In the implementation stage the policy is put into effect, human resources and funding are allocated. After a new policy is implemented, advocates, opponents, or other “interested parties” begin to consider the consequences of the decision and its implementation (Cockrel, 2007). Abood (2007), “The overall health care system, including the public and private sectors, and the political forces that affect that system are shaped by the health care, policy-making process” (The Policy Process and the Politics of Health Care).
This paper will examine how the Medicare program has gone through the formulation, legislative, and implementation stage of the health care policy-making process and describe each stage of the process. To understand the Medicare program one must first understand how it came to be and the policy-making process the program has gone through. The first steps of the policy-making process is the formulation stage, and the legislation stage, where problems are identified and researched by key people, organizations, and interest groups.
The problem is then outlined and the desired outcomes are defined, the best strategies are picked and the resources that are needed are identified, discussed and agreed upon by Congress. Policy formulation has a tangible outcome: A bill goes before Congress or a regulatory agency drafts proposed rules. The process continues with adoption. A policy is adopted when Congress passes legislation, the regulations become final, or the Supreme Court renders a decision in a case. (“The Policy Making Process”, 2011).
In 1945 President Truman sent a message to Congress seeking legislation to provide a national health insurance program that would provide coverage for the elderly. In 1948 President Truman again sent a letter to Congress stating “The greatest gap in our social security structure is the lack of adequate provision for the Nation’s health. . . . I have often and strongly urged that this condition demands a national health program. The heart of the program must be a national system of payment for medical care based on well-tried insurance principles.
Before Medicare was signed into law it had to go through the legislative stage, also known as the decision or adoption stage. The Medicare policy was presented to Congress that had to agree on all parts of the policy. President Truman had proposed a Medicare system that promoted a universal health care insurance system that covered all citizens. Congress repeatedly denied his policy because of the fear of socialized medicine, the opposition from special interest groups such as the American Medical Association, and democratic initiatives that wanted to provide incentives to private insurance companies to cover the elderly.
By the close of the Truman Administration officials at the Social Security Administration had developed a scaled-back proposal to cover only persons receiving Social Security retirement benefits-those age 65 or older. This would become the key idea behind Medicare (DeWitt, 2003). In 1962 President Kennedy proposed a new version of Medicare, and again it failed in Congress. In 1964 the Medicare Program was passed by the senate, but was then blocked in conference by the House (DeWitt, 2003).
It was not until twenty years later, in 1965, that President Johnson finally signed Medicare into law as an amendment to the Social Security Legislation. It was composed of two parts; Part A and Part B. Part A provides coverage for hospital insurance, and Part B provides coverage for medical insurance. In 1972 disabled persons under age 65 and those with end-stage renal disease become eligible for coverage. In 1997 Part C was added, which gave Medicare enrollees the option to choose a private provider for their medical coverage. Then in 2006 Part D was added.
Anyone who is enrolled in Medicare Part A and B is automatically enrolled in the Part D prescription Drug program, which provided reduced-cost prescriptions. Because of the need for adequate health care for the elderly and disabled individuals, Medicare was formulated. After Medicare was formulated and signed into law, it then entered the implementation stage of the policy making process. In the implementation stage the policy is put into effect, and begins after the policy is signed into law. In this phase, the proposed policy is transformed into a plan of action (International Council of Nurses, 2005).
The policy then needs to be administered, funded, staffed, and regulated by the determined agencies. According to Political scientist Robert Lineberry, “the implementation process is not the end of policy-making, but a continuation of policy-making by other means”. “When a policy is pronounced, the implementation process begins”. “What happens in it may, over the long run, have more impact on the ultimate distribution of policy than the intentions of the policy’s framers” (Politics and the Policy Making Process, n. d. ). Within the implementation stage regulatory agencies must be established.
In 1965 President Truman was the first enrollee in the Medicare part B program. It was the duty of the Health Care Financing Administration in the Department of Health and Human Services to administer the Medicaid program. The implementation of Medicare is as follows, the Medicare Program Part A is financed through tax dollars and upon turning 65 almost everyone is eligible for the program. A few months before a person turns 65 if they are already receive Social Security or Railroad retirement they are sent an enrollment packet, with questions and the Medicare card.
If they do not receive Social Security or Railroad Insurance they can apply for Medicare during the seven month initial enrollment period. Medicare Part B, Hospital Insurance program is intended to be self-supporting (i. e. , financed entirely through designated sources of income rather than relying on general tax revenues), much like Social Security, and it is funded primarily through earmarked payroll taxes (American Academy of Actuary, 2001). If a person is enrolled in Medicare Part A they are automatically enrolled in Part B.
Medicare Part C, or Advantage plans, such as HMO’s and PPO’s are funded through general revenues and by beneficiary premiums. Members of Medicare can choose to enroll in Part C which provides private insurance to enrollees while still being covered through Medicare. Part D also known as the prescription drug program, is funded by general revenues, premiums and state payments. If a person is already enrolled in Part A they can enroll in Part D during the initial enrollment period. Part D offers enrollees a reduced price prescription plan.
If a person is disabled and receives social security disability insurance they will be automatically enrolled in Medicare after the 25th SSDI payment. The enrollee will have to sign up for Part D separately. If a person has End- Stage Renal Disease (permanent kidney failure) they will receive Medicare Part A and B within three months of their first dialysis treatment. According to the California Health Advocates (2011), “If a person has amyotrophic lateral sclerosis (ALS), also known as Lou Gehrig’s disease, they will be automatically enrolled in Medicare Parts A and B when they begin receiving SSDI payments”.
With the implementation of Medicare thousands of elderly Americans and American’s with disabilities were able to receive affordable health care coverage. Prior to 1965 half on the nation’s elderly were uninsured, and could not afford adequate medical coverage. Through the formulation stage of the policy making process Medicare was presented as a means to affordable coverage to the elderly. President Truman presented a policy to congress that would cover all citizens through the Medicare program.
Although Truman’s proposal was denied in the legislative stage, the stage where a policy gets approval through congress and the president, it was a step towards a health care insurance program. In 1965 President Johnson proposed the Medicare policy that provided coverage to elderly and disabled Americans. The policy was then signed into law after congress and the president approved it. Through the implementation stage, the stage where the policy is put into action, funding was allocated and the Health Care Financing Administration in the Department of Health and Human Services became the governing agency for the Medicare program.
If Medicare was not formulated, then proposed into legislation, then implemented millions of elderly and disabled American’s would be without adequate health care coverage. References: Abood, S. A. (2007). Influencing health care in the legislative arena. Retrieved from http://www. medscape. com/viewarticle/553404_4 American Academy of Actuary. (2001). How is medicare financed. Retrieved from http://www. actuary. org/pdf/medicare/financing_fall2001. pdf California Health Advocates. (2011). Enrolling in Medicare. Retrieved from http://www. ahealthadvocates. org/basics/enroll-AB. html Cockrel, J. (2007). Public policy making in America. Retrieved from http://www. ca. uky. edu/agc/pubs/ip/ip19/ip19. pdf DeWitt, L. (2003). LBJ and Medicare. Retrieved from http://www. larrydewitt. net/Essays/MedicareDaddy. htm Medicare Commission. (n. d. ). Medicare from start to today. Retrieved from http://thomas. loc. gov/medicare/history. htm Politics and the policy making process. (n. d. ). Retrieved from http://www. pearsonhighered. com/assets/hip/us/hip_us_pearsonhighered/samplechapter/0205011616. pdf