The Medicare Program in the United States

The Medicare program in the United States has been a topic of discussion ever since it was implemented as legislation. The debate for a national healthcare policy for Americans dates back to the reign of President Teddy Roosevelt, whose 1912 presidential campaign program incorporated healthcare coverage (Clement et al., 2017). However, the concept of a universal health insurance policy gained traction only after President Harry S Truman championed it. Although Truman attempted to enact the legislation during his presidency, he failed. Following his failure, it took 20 years before any healthcare coverage, Medicare, for 65 years and older Americans, rather than initial ideas to insure eligible Americans of all ages to become a reality (Clement et al., 2017). This paper discusses the Medicare program from its historical perspective, benefits, and challenges it has faced over the years to date.

The Historical Perspective, Demand, and Creation of the Medicare Program

Since the independence of the United States, the provision of a universal health care program for all American citizens has always been a priority of the national government. President Lyndon B. J. signed H.R. 6675 on July 30 in Missouri into legislation in independence in 1965 (Oberlander, 2019). During the occasion, outgoing President Truman received the nation’s first Health insurance card. Medicare’s expenditure in 1965 was approximately $10 billion (Hyer et al., 2020, p. 982). Healthcare coverage began in 1966 when Americans aged 65 and above enrolled in Part A, and millions of additional elders joined in Part B (Oberlander, 2019). Therefore, individuals who enrolled in the Medicare program received benefits, as discussed later in the paper.

Coverage was increased to include individuals below 65 but with long-term impairments and end-stage renal illness (ESRD) (Kirchhoff, 2018). In 1988, Congress approved the Medicare Hazardous Insurance Act, which included a genuine cap on Medicare Part A and Part B own payments and a minimal pharmaceutical drug reimbursement (Oberlander, 2019). Additionally, Congress enacted the Qualified Individual programs, which compel Medicaid to pay for Part B individuals with earnings between 120 and 135% of poverty via a government grant (Binder et al., 2016, p. 13). The policy included an alternative prescription drug coverage known as Part D, exclusively available via private insurance.

The Patient Protection and Affordable Care Act of 2010 had many reform proposals containing Medicare expenditures while raising revenue, consolidating and enhancing the scheme’s delivery models, and expanding its operations. Approximately 25% of persons receiving Health insurance did not have a prescription medication plan before this time (Zhao et al., 2020, p. 165). Medicare has recruited 63.1 million individuals as of January 2021 (Zhao et al., 2020, p. 167). Ever since the demand for Medicare programs has steadily increased as many Americans today have health care insurance policies.

The Background, Benefits, and the Challenges involved in Creating the Program.

Medicare is a type of social health coverage and is the second most populous government initiative of its kind, following Social Security. Medicaid, the national healthcare scheme for the impoverished, was also formed by the 1965 law, enlarging prior welfare-based support systems (Binder et al., 2016). There are various benefits that the Medicare program has impacted on individuals who are beneficiaries of the scheme. First, according to specific criteria and constraints, Part A covers hospital services for inpatient, post-hospital skilled physician facility services, long-term care, and certain home health services. An estimated 20% of Part A subscribers utilize Part A benefits during a year (Binder et al., 2016, p. 12). Second, health care coverage Parts A and B fund household care and services for persons suffering from an end-stage renal illness (Binder et al., 2016). Medicare provides home health agency visitation for patients who are either restricted to their homes or require occasional professional nursing care, as well as physiotherapy and speech-language treatment.

Lastly, Part B encompasses outpatient professional diagnostic procedures performed by Medicare-participating facilities, such as blood and urine tests and certain diagnostic procedures. These services are provided by health facilities, clinicians’ offices, and independent laboratories. There are no co-payments or taxes associated with insured clinical laboratory tests (Binder et al., 2016). Some of the challenges involved in creating the Medicare program include; adhering to critical regulatory standards, getting ready for an effective Centers for Medicare & Medicaid assessment, and managing social health determinants for high-risk patients (Binder et al., 2016). Additionally, harnessing information to emphasize healthcare quality implementation has presented a major challenge to the Medicare program.

How Medicare Impacts the Lack of Price Transparency and Quality Today

In the USA, clients of medical services frequently lack knowledge about the exact cost of treatment they obtain and inadequate access to data on the effectiveness of the treatment they receive. Generally, medical institutions, clinicians, and pharmaceutical businesses do not include statistics on pricing and quality in their marketing (Reed, 2019). Promotions for pharmaceuticals occasionally include reductions or incentives, therefore, prompting consumers to internet pricing data in previous advertisements (Reed, 2019). Often, state insurers such as Medicare and Medicaid set clinician and medical prices sequentially. Consequently, covered individuals rarely contribute the whole negotiated fee for care, preferring to pay a lower co-payment amount. Medicare is badly out of step when implementing powerful medical incentives (Reed, 2019). One significant impediment is that consumers frequently have little or no options in terms of healthcare plans (Reed, 2019). Finally, several insurance plans have demonstrated ambiguity on their involvement in effectiveness (Reed, 2019). Therefore, transparency has had little to no influence on medical insurance cost trends and overall scheme effectiveness.

The changes in Pricing and Transparency of Medicare Program

A sincere dedication to transparency requires Medicare to provide individuals with a total cost and price analysis that considers productivity, serious incidents, management, and the influence of personal ease and accessible choices. While complete price transparency may appear challenging to implement, numerous developments suggest differently (Reed, 2019). Practitioners, medical institutions, and well-organized insurance companies have proved the potential to deliver effective care at significantly reduced costs while still pleasing consumers (Reed, 2019). Typically, there are information-driven firms capable of comprehending and tracking the components of an accomplishment and are continually striving to enhance value.

Consumer sensitivity to pricing demands that consumers have access to meaningful price data. For example, when customers require assistance with a problem, they are more concerned with the cost of the episode of care than with the rates of the individual services that comprise the episode (Reed, 2019). Price transparency becomes more critical when a reduced-cost supplier is designated as the benchmark. This strategy is employed in Germany and other nations for prescription medication advantages; many suppliers decrease their prices to the base rate (Reed, 2019). This model strikes a compromise between the significance of medical insurance and the requirement for market mechanisms to exert some influence on price and costs.


In conclusion, the Medicare program has proven to be of extreme benefit to Americans. Covering hospital services for inpatient, post-hospital skilled physician facility services, long-term care, and certain home health services, and encompassing outpatient professional diagnostic procedures performed by Medicare-participating facilities are among the program’s benefits. However, the higher cost and lack of transparency associated with the program have hindered some citizens from accessing and receiving better and efficient health care services. Therefore, it is prudent for the government to develop efficient policies to reduce the higher pricing and improve transparency for better health care services among its citizens.


Binder, C., Hahn, J., Kirchhoff, S. M., Morgan, P. C., & Tilson, S. (2016). Medicare Primer. Congressional Research Service.

Clement, R. C., Bhat, S. B., Clement, M. E., & Krieg, J. C. (2017). Medicare reimbursement and orthopedic surgery: past, present, and future. Current Reviews in Musculoskeletal Medicine, 10(2), 224-232. Web.

Hyer, J. M., Paredes, A. Z., Cerullo, M., Tsilimigras, D. I., White, S., Ejaz, A., & Pawlik, T. M. (2020). Assessing post-discharge costs of hepatopancreatic surgery: An evaluation of Medicare expenditure. Surgery, 167(6), 978-984. Web.

Kirchhoff, S. M. (2018). Medicare coverage of end-stage renal disease (ESRD). Congressional Research Service (R45290), 1-26. Web.

Oberlander, J. (2019). Lessons from the long and winding road to Medicare for All. American Journal of Public Health, 109(11), 1497-1500. Web.

Reed, R. D. (2019). Costs and benefits: Price transparency in health care. Journal of Health Care Finance, 45(4), 1-15. Web.

Zhao, J., Mao, Z., Fedewa, S. A., Nogueira, L., Yabroff, K. R., Jemal, A., & Han, X. (2020). The Affordable Care Act and access to care across the cancer control continuum: a review at 10 years. CA: A Cancer Journal for Clinicians, 70(3), 165-181. Web.

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