Medicare (United States) - Legislation and Reform

Legislation and Reform

• 1960 — PL 86-778 Social Security Amendments of 1960 (Kerr-Mills aid)
• 1965 — PL 89-97 Social Security Act of 1965, Establishing Medicare Benefits
• 1980 — Medicare Secondary Payer Act of 1980, prescription drugs coverage added
• 1988 — PL 100-360 Medicare Catastrophic Coverage Act of 1988
• 1989 — Medicare Catastrophic Coverage Repeal Act of 1989
• 1997 — PL 105-33 Balanced Budget Act of 1997
• 2003 — PL 108-173 Medicare Prescription Drug, Improvement, and Modernization Act
• 2010 — Patient Protection and Affordable Care Act and Health Care and Education Reconciliation Act of 2010

In 1977, the Health Care Financing Administration (HCFA) was established as a federal agency responsible for the administration of Medicare and Medicaid. This would be renamed to Centers for Medicare and Medicaid Services (CMS) in 2001.

By 1983, the diagnosis-related group (DRG) replaced pay for service reimbursements to hospitals for Medicare patients.

President Bill Clinton attempted an overhaul of Medicare through his health care reform plan in 1993-1994 but was unable to get the legislation passed by Congress.

In 2003 Congress passed the Medicare Prescription Drug, Improvement, and Modernization Act, which President George W. Bush signed into law on December 8, 2003. Part of this legislation included filling gaps in prescription-drug coverage left by the Medicare Secondary Payer Act that was enacted in 1980. The 2003 bill strengthened the Workers' Compensation Medicare Set-Aside Program (WCMSA) that is monitored and administered by CMS.

On August 1, 2007, the U.S. House United States Congress voted to reduce payments to Medicare Advantage providers in order to pay for expanded coverage of children's health under the SCHIP program. As of 2008, Medicare Advantage plans cost, on average, 13 percent more per person insured than direct payment plans. Many health economists have concluded that payments to Medicare Advantage providers have been excessive. The Senate, after heavy lobbying from the insurance industry, declined to agree to the cuts in Medicare Advantage proposed by the House. President Bush subsequently vetoed the SCHIP extension.