The 50s

As social security became popular and Congress passed bills raising social security benefits in that decade, reformers were inclined to extend health insurance to social security beneficiaries, mostly elderly persons (Berkowitz 2001). Most of them had stopped paying for their employer-based health insurance and had high morbidity rates. The federal government could then come in as a health provider through what came to be Medicare. The concept of limiting federally financed national health insurance for the elderly received congressional attention in 1957 (Berkowitz).

In 1961, President John F. Kennedy endorsed a Medicare bill, followed by a long campaign for its passage (Berkowitz 2001). The concept of national health insurance underwent another transformation or major change of sharing common grounds with private health providers. The inclination to accommodate private health providers soon gained ground. In 1964, the Senate passed a Medicare bill, which was carried over to the new Congress then to convene in 1965. The emphasis given to Medicare relegated Medicaid to the backseat. But in March of 1965, Wilbur Mills of the powerful Ways and Means Committee recommended the combining of the administration approach and that of John Byrnes of the same Committee. This created Medicaid, which incorporated elements of Eldercare, which would be a supplement to Medicare instead of as a substitute. Medicaid became a law as a supplement in 1965 and later greatly influenced health care finance (Berkowitz).

Health Care Spending Rises Steeply

Statistics showed a record-high level of healthcare spending and growth at $1.6 trillion in 2002, which topped the rest of the economy in the fourth straight year (Sherman 2004). Hospital and prescription drug expenses went up by 9.3% over the past year's level....

Experts said that this continued increase burdened the healthcare systems and all the sectors. The Organization for Economic Cooperation and Development in 2001 said that the U.S. spent more per person on health than any other developed nation. Senator Edward Kennedy interpreted this as a call to prompt action in controlling health care costs. Overseers, however, did not immediately respond to the urgent call (Sherman).
In response to the resurgent growth of hospital spending, States began imposing limits on the Medicaid program for the poor to contain costs (Sherman 2004). Private insurance, out-of-pocket spending and public funds accounted for the resurgence. But the biggest contributor was a small increase in older and disabled Medicaid recipients in their share of the spending (Sherman).

Conclusion

The findings of a study published in the January-February issue of Health Affairs said that the rate of growth of Medicare and Medicaid costs had decelerated in 2003 as compared with those of previous years (Edwards 2005). The ominous growth was said to have been contained for nursing home services. According to the study, Medicare spending in 2003 was only 1.3% as compared to 11.4% in 2002. This was viewed as the consequence of the expiration of funding. Increases in Medicaid spending for nursing home were also reported to have slowed down from 8.1% in 2002 to only 1% in 2003 as the States began to reduce Medicaid costs (Edwards).

Bibliography

Berkowitz, E. (2005). The past as prologue. 15 pages. Health Care Financing Review: U.S. Department of Health and Human Services

Edwards, D.J. (2005). The Medicare/Medicaid slowdown. 2 pages. Nursing Homes: Medquest Communications LLC

Sherman, M. (2004). U.S. health-care spending surges. 2 pages. Deseret News: Deseret News…