When the federal health insurance program Medicare was inaugurated in 1966 by President Lyndon B. Johnson, he called it a “a test of our willingness to work together.” It was a test to see if Americans could combine the ideals of individualism and hard work with the ideas of community and patriotism. Johnson specifically said that Medicare was not to be charity for the elderly but rather a right of senior citizens.
Since Medicare was launched, it has changed in many ways. The law now covers the poor with Medicaid and outpatient drugs with Medicare Part D. And through 2013 and 2014, as Medicare looks to change further, the same ideas of individual exceptionalism and community support are wrestling with each other.
When the Patient Protection and Affordable Care Act was passed in 2010, it set forth five years of changes to Medicare and Medicaid, from transforming healthcare that doesn’t directly affect most Americans, like the creation of the Medicare-Medicaid Coordination Office, to substantial changes that expand who is covered.
Before the ACA, Medicare covered people over age 65 and people under 65 with certain disabilities or end-stage renal disease. It helped pay for hospital stays and hospice (Part A), doctors visits and medical treatment (Part B), and healthcare reimbursement for prescriptions (Part D). Medicaid covered certain low-income children, people with disabilities and pregnant women.
Outlining the changes
In 2010, the ACA immediately changed how Medicaid reimbursed its users for drugs. It increased the more expensive brand-name rebates to 23.1 percent and increased generic drug rebates to 13 percent. The Medicare-Medicaid Coordination Office was also created in 2010 to deal with Americans who were eligible for both programs.
The other major Medicaid change in 2010 is one that will take effect more broadly in 2014. It allows for low-income adults making less than 133 percent of the poverty level to be eligible for Medicaid on a state-by-state basis.
Since 2010, there have been a variety of ways the ACA has been preparing for when the law expanding Medicaid becomes a nationwide requirement in 2014. The government encouraged states to cover certain preventative services for adult Medicaid enrollees in 2013 by increasing federal matching payments by 1 percent.
On Jan. 1, 2014, all Americans, regardless of state law, who make under 133 percent of the poverty level will be eligible for Medicaid.