Medicare became a law in 1965 when President Lyndon Johnson signed it as part of the Great Society enactment. The idea behind Medicare was that senior citizens and the disabled would have access to healthcare and receive a retirement benefit, which later was solely based on the person’s past work and the amount of taxes they paid during their working life. Those receiving Medicare are called “beneficiaries.”
Over the years since the passage of Medicare, many changed have been made including Medicare Reform. With the reform, it allowed private insurance companies to handle Medicare benefits, which works very similar to an HMO called Medicare Advantage. Beneficiaries have a choice to remain with the Original Medicare or enroll in Medicare Advantage at the end of each year.
Doctors have a choice of opting out of Medicare patient’s acceptance. If they agree to accept Medicare patients, they must agree to the terms under Medicare, which also means agreeing to the fees that Medicare pays to doctors. Physicians cannot charge the difference to their patients, so in essence, those doctors that do accept Medicare patients, receive less money than those that have private or group health insurance.
Under the new Obama Administration and the healthcare overhaul, a 21 percent cut in Medicare payments to doctors takes effect in June 2010, unless there is an intervention to prevent it, or a freeze to place it on hold. Many doctors fear these cuts will make it harder for them to participate in the Medicare program.
Many physicians that participate in Medicare have a tremendously large patient base, and they know how important their participation is, but at the same time, the participating doctors also have bills to pay and lives to live. Even if the pay cut is not realized as planned, the very talk of it makes many doctors extremely uneasy, and those that do not participate certainly do not see any benefit to join.
The new Administration’s passage of the new healthcare plan wants to mirror a healthcare system in America after Medicare. With cuts on the table such as the current issue, it does not give doctors a lot of faith in an America with a Medicare-type health plan for everyone.