The Medicare Factor in Long Term Care Planning

Medicare and Health Insurance History in the United States With a vision to provide a universal health plan, such as Medicare, the United States does not truly have a national health care plan. Even though universal health care, another name for national health care plans, has its conception in the 20th century, the United States has shied away from its inception. In fact, the United States is one of the few industrialized countries that do not offer true, government provided universal health care.

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The first private health insurance programs created nation wide was the Blue Cross plans. Originally paid by individuals on prepaid bases for certain hospitals, this was later changed to include any sponsored hospital. The individual would provide a monthly payment that ensured he was cared for a specified number of days.

The Blue Shield plan was another plan created during the 1940s. It allowed the prepayment for doctor services. The plan’s creation provided an alternative to a national health care plan. The Blue Shield and Blue Cross plans eventually merged, forming what we call today Blue Cross Blue Shield.check over here to learn more about this.

There are varying reasons that a national health care insurance plan has not taken hold in the United States. As the American Medical Association has opposed the establishment of a national plan, the employer sponsored insurance plan has added the catalyst to not create a national plan. Since the employers can write off the plans provided to their employees, Congress has not received any push to change the concept of employer-sponsored plans.

The closest conception of universal health care the United States institutionalized is Medicare. Medicare was created in 1965.

Then Came Medicare

So how did Medicare take hold? Though it is not a true national health care plan for everyone, only for those over 65, it is because of President Lyndon B. Johnson and a majority of Democrats in both houses of Congress that the plan came into existence.

Attempting to provide a plan comparable to the private sector, the creation of Medicare part A came about. By mimicking the current plans, Medicare part A provided a determined amount of hospital care. Any more care beyond what the plan stated was to be paid by the patient.

The disadvantage to a plan such as this is the increasing expense of hospital care. The costs paid by the insured are now at a level to completely destroy financially that individual. In other words, as expenses have increased with hospital care, Medicare Part A has not kept pace. Therefore, any difference in cost is paid for by the patient.

This realization gave way to catastrophic plans. These plans allow the insured to pay for some of the upfront costs up to a predetermined out-of-pocket limit. Once that is reached, the insurance pays 100% of the cost. Unfortunately, Medicare has not evolved into this type of arrangement.

As such, we are beginning to see the bankruptcy of the plan, as well as the bankruptcy of the insured attempting to cover their part of the insurance plan.

Medicare part B evolved into a plan to encourage doctors to be paid by the federal government with the attempt to not institute price controls by the same. Under the original intent, Medicare part B paid for 80% of a doctor’s services while the patient paid the other 20%, and any fees above the reasonable costs.

However, the plan has degenerated into a government price control plan, where the government dictates to doctors what they will be paid for services the doctors provide.