Medicare Beneficiaries and Managed Care: Costs and Denied Care
This paper evaluates the consequences of transferring Medicare beneficiaries into managed care organizations (MCOs). Drawing on peer-reviewed sources in health policy, economics, and law, it argues that such a shift would produce no meaningful cost savings and would expose elderly patients to increased denial of necessary medical treatments. The paper reviews the failed Medicare + Choice program of 1997 as a historical case study, analyzes administrative and fraud-related cost problems, and examines the moral hazard inherent in MCO utilization review practices. It concludes that while Medicare requires reform, transferring beneficiaries to MCOs is not a viable solution.
- Introduction: Thesis: MCO transfer harms Medicare beneficiaries
- Cost Savings Under Managed Care: Medicare costs rising; MCOs offer no real savings
- The Medicare + Choice Program as a Case Study: 1997 M+C program failed due to fraud and backlash
- Moral Hazard and the Denial of Care: MCOs deny treatments, endangering elderly patients
- Legal Challenges to MCO Practices: Lawsuits expand consumer rights against MCO denials
- Conclusion: MCO transfer rejected; Medicare reform needed elsewhere
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What makes this paper effective
- The paper builds its argument on a concrete historical case — the Medicare + Choice program — giving the policy critique an empirical grounding rather than relying solely on abstract reasoning.
- It balances two distinct lines of argument (cost inefficiency and patient harm), preventing the analysis from feeling one-dimensional and strengthening the overall conclusion.
- Quotations from peer-reviewed sources are integrated purposefully, with each citation used to support a specific sub-claim rather than as filler.
Key academic technique demonstrated
The paper demonstrates evidence-based policy analysis: it frames a policy question, surveys relevant literature, applies a real-world precedent as a test case, and derives conclusions from both empirical outcomes and ethical concerns. This two-pronged (economic and ethical) framework is a useful model for healthcare policy writing at the undergraduate level.
Structure breakdown
The paper opens with a thesis-driven introduction, then develops two main body sections — one on cost savings and one on moral hazard and denial of care — each supported by cited evidence. The cost-savings section uses the Medicare + Choice precedent as its centerpiece. The moral hazard section pivots to patient welfare and legal liability. A brief conclusion restates the thesis and synthesizes both lines of argument. This clear two-body-section structure makes the argument easy to follow.
Introduction
The American healthcare system has been at the center of debate for many years. One of the most pressing issues confronting it is Medicare and its beneficiaries. This paper focuses on the ramifications of moving Medicare beneficiaries into managed care organizations (MCOs). The central argument is that such a move would be a bad idea: there will be no real cost savings, and many individuals are likely to be denied needed care.
Cost Savings Under Managed Care
An article in the American Economic Review explains that Medicare is the second-largest government entitlement program in the United States. The cost of running this program is astronomical. The article reports that in 1999 the government spent $230 billion — approximately 13% of its budget — on Medicare and its beneficiaries (Antos and Bilheimer).
The major issue with Medicare is that it is expected to grow exponentially in the coming years due to an aging population. It is estimated that 47 million people will ultimately be enrolled in the program (Antos and Bilheimer). Furthermore, "Medicare spending will grow from 2.6% of GDP in 1995 to 6.3% of GDP in 2030" (Antos and Bilheimer). As enrollment increases, the ratio of contributing workers will decrease, creating a shortage of funds and potentially leading to an even larger health crisis than the one that currently exists.
Some experts believe that moving Medicare beneficiaries to managed care organizations would alleviate the problem. While Medicare has been growing substantially, managed care organizations have also been expanding (Fischer). However, an article entitled "The Unraveling of Managed Care: Recent Trends and Implications" asserts that there is almost no cost savings associated with moving Medicare beneficiaries to MCOs (Gorin). The article explains that there are significant administrative and procedural costs associated with transferring Medicare beneficiaries to a managed care system (Gorin).
Works Cited
Angell, Marcia, and Arnold S. Relman. "Patents, Profits & American Medicine: Conflicts of Interest in the Testing & Marketing of New Drugs." Daedalus 131.2 (2002): 102+.
Antos, Joseph R., and Linda Bilheimer. "Medicare Reform: Obstacles and Options." American Economic Review 89.2 (1999): 217–221.
Fischer, Pamela P. "Parkinson's Disease and the U.S. Health Care System." Journal of Community Health Nursing 16.3 (1999): 191–204.
Gorin, Stephen H. "The Unraveling of Managed Care: Recent Trends and Implications." Health and Social Work 28.3 (2003): 241+.
Rosenbaum, Sara, and Brian Kamoie. "Managed Care and Public Health: Conflict and Collaboration." Journal of Law, Medicine & Ethics 30.2 (2002): 191+.
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