General revenue funds from the program would also be applied towards hospital construction equipment purchase and grants to teaching hospitals. The second part of the law, also known as Part B, concerned physician visits. Initially, Part B was known as Eldercare, the American Medial Association's (AMA) alternative to Medicare. Mills however reformed it to become an optional part of the Medicare program and legislation. This is an option that pensioners could choose upon retirement. To receive benefits under Part B, deductions were made from recipients' Social Security checks.

The third part of the bill was Medicaid. The idea for this scheme originated during the early part of the 1960s. It was created as an alternative for the compulsory heath insurance plan suggested by the Johnson alternative. The scheme would be funded from general tax revenue, and focused specifically upon the health care needs of the poor and other qualifying individuals. Such qualifying persons included welfare recipients, the blind or otherwise disabled and the low-income elderly.

Although much better than no health care provision at all, the new bill began its career filled with trouble. After its enactment, periodic modifications were made mostly in an attempt to control the costs necessary to maintain the schemes. In 1971 and 1974, for example, standards and costs were reviewed to eliminate duplication of equipment and hospitals. In 1983, according to Boyer (1971), charges for medical procedures were revised and standardized.

Despite continual efforts by state and federal agencies, controlling fraud and abuse within the system remained a significant challenge. By the 1980s, discussion centered around the long-term needs of the elderly, medical catastrophes and how to cover these, as well as ways in which the Medicare system could be maintained for baby boomers who would reach retirement age. In addition health maintenance organizations were introduced as an option for Medicare and Medicaid recipients.

Despite the best governmental efforts surrounding the schemes, the end of the 20th century found 44 million Americans uninsured....

In addition, problems within the schemes focused on reimbursements to Medicare patients for pharmaceuticals.
Boyer (2001) notes that pressure from the bush administration and the American Association of Retired Persons resulted in limited prescription drug benefits for Older Americans under the Medicare system, which would begin in 2006. These benefits have been widely criticized for the unsustainability.

Further criticism surrounded the failure of the law to regulate prices established by drug companies, as well as the ban on cheaper drugs from Canada. Competition from private health care providers with the Medicare system was also criticized for its potential to collapse the entire system, as lower rates are offered to healthier citizens.

Today, both Medicare and Medicaid face issues that are far more complicated than simply providing insurance. In addition to the rising costs and the rebellion of citizens and industry alike, the system is also fraught with fraudulent and underhanded activity. Many of those who are supposed to benefit believe that they are being disadvantaged more than anything else, while others find the schemes so unreachable that they make no effort to become insured at all.

Although the system was implemented with the best intentions, the American government has a long way to go towards perfecting for the true benefit of all. Critics of the system have a point and should be heard. Some hope is provided by the fact that debate is ongoing, as debate provides a springboard for new and better ideas.

Sources

Boyer, Paul S. (2001). Medicare and Medicaid. http://www.encyclopedia.com/doc/1O119-MedicareandMedicaid.html

Derzon, Robert A. (2005, July 26) The Genesis of HCFA. CMS Reflections. http://content.healthaffairs.org/cgi/reprint/hlthaff.w5.326v1?ijkey=MWVZY/8RfwEG.&keytype=ref&siteid=healthaff

Noonan, Kyle (2009, May 28). Health Reform through History: Part III: Medicare and Medicaid. New America Foundation. http://www.newamerica.net/blog/new-health-dialogue/2009/health-reform-through-history-part-iii-medicare-and-medicaid-12062