Memorandum
To: Congressman Howard Hughes
From: , Chief of Staff
Date: January 18, 2015
Subject: Medicare Crisis
Congressman Hughes,
You have been asked to participate in a panel discussion concerning the Medicare crisis and how expenditures can be reduced. One proposal that is being considered is enrolling participants in HMOs. This memorandum contains information about the Medicare crisis and it will assist you in answering questions that the panel may have, and also aid you in making decisions concerning enrollment in HMOs.
PROBLEM IDENTIFICATION
The Medicare and Medicaid programs were signed into law on July 30, 1965, by President LBJ. When it was first implemented, Medicare covered most people aged 65 or older. "In 1973, the following groups also became eligible for Medicare benefits: persons entitled to Social Security or Railroad Retirement disability cash benefits for at least 24 months, most persons with end-stage renal disease (ESRD), and certain otherwise non-covered aged persons who elect to pay a premium for Medicare coverage." (Annual Statistical Supplement, 2011 - Medicare Program Description and Legislative History, 2011 para 2)
Medicare consists of four parts: Hospital Insurance (HI), also Medicare Part A. Medicare part B is helps pay for physician, outpatient hospital, home health agency and other services. Medicare is Medicare Advantage Program which is a program that expands beneficiaries' options for participation in private-sector health care plans. Medicare D helps pay for prescription drugs that would not otherwise be covered by part A or B.
There were 19 million people that enrolled when Medicare started in 1966. "In 2011, almost 49 million are enrolled in one or both of Parts A and B of the Medicare program, and over 12 million of them have chosen to participate in a Medicare Advantage plan." (Annual Statistical