When Medicare was enacted in 1965 it was heralded as a pivotal expansion of the social safety net. At the time, nearly half the elderly had no health insurance and many others had inadequate coverage. The path that policy makers followed included several frustrating dead ends before a successful avenue presented itself. Medicare's triumph, however, was not total. Indeed, the clever decision by Ways and Means Chairman Wilbur Mills to combine hospital coverage and physician services under Medicare, albeit with separate financing arrangements, may have been a political masterstroke, but one that fostered unintended problems. The creation of Medicare part A (hospital care) and part B (physician services), with different forms, insurance provisions, and fiscal intermediaries sowed the seeds for future dysfunction and, according to health policy scholar Ted Marmor, was a prime factor in the exponential increase in Medicare costs. coursework service is written by experienced coursework writers working online! Low prices! Aside from the obvious structural flaw, critics also noted that the lack of coverage for outpatient prescription drugs was an acute oversight. The decision to leave out prescription drug coverage was not taken lightly, but budgetary concerns as well as political expediency necessitated the omission. Moreover, no one in 1965 could foresee the astounding advances in pharmacological science that would lead to the dramatic increase in drug therapies.
Prior to 1999, policy makers made two major attempts to establish a prescription drug plan as part of Medicare. Both efforts ended in failure, one spectacularly so, and both efforts informed the actions of policy makers addressing the issue in 1999. In 1988 the Congress, with the grudging acquiescence of the Reagan administration, passed the Medicare Catastrophic Coverage Act (MCCA). The law was intended to protect seniors in the event of an expensive medical emergency that left them hospitalized for a long period. In addition, it expanded Medicare coverage for a host of needs, including hospice care, home health services, and mammography services, and provided extra financial help to impoverished elderly by guaranteeing premium payments for physician services. The bill also provided for the first time a prescription drug benefit for all outpatient drugs, subject to a $600 deductible. The entire package was to be financed through a new supplemental premium imposed on higher-income seniors. In essence, a tax was levied on wealthy seniors to pay for a benefit for all seniors. The new superpremium was controversial, but Democratic congressional leaders and the AARP believed that the benefits greatly outweighed the inconvenience to a small set of seniors.