Medicare, ACA Have Faced Similar Criticism. But Is That Where the Comparison Ends?

As Medicare turns 50, many observers are looking back at the program’s beginning and drawing comparisons with more recent health reform efforts, namely the Affordable Care Act.

A recent article in the New England Journal of Medicine on the beginning of Medicare notes that the program started “only after a long and deeply ideological struggle.” In fact, the American Medical Association warned that creating the Medicare program would result in “the most deadly challenge ever faced by the medical profession.” And many other observers described the law as an overreach of the federal government.

Criticism Déjà Vu

The criticism now surrounding the ACA mirrors what happened 50 years ago to Medicare. Nicole Huberfeld, a professor of law at the University of Kentucky College of Law and bioethics associate at the College of Medicine, told California Healthline that both laws prompted “cries of ‘socialized medicine,’ which have always been the rallying cry of the politicians and stakeholders who oppose health care reform.”

For instance, Sally Pipes, president and CEO of the San Francisco-based Pacific Research Institute, told California Healthline that both Medicare and the ACA “put government in increasing control of our health care system and will lead, in my mind, to government completely controlling the health care system.”

Such criticism stems from “a centuries-old debate in the U.S. about centralization versus decentralization” of the health care system, Commonwealth Fund President David Blumenthal told California Healthline.

Blumenthal said, “Both [laws] were extremely controversial. In both cases they instigated controversies about the proper role of government in health care and in American life more generally, in both cases they were accomplished using similar legislative strategies … [and] both extended coverage and, in that sense, were rare events in the history of U.S. health care.”

Laws Are More Different Than They May Seem

However, Blumenthal said similarities between Medicare and the ACA “are high level — the more closely you look at it the more the differences are apparent,” adding, “The differences have to do with the complexity of the legislation and the complexity of the goals of the legislation.”

For instance, Huberfeld noted that while “Medicare is a purely federal program,” the “ACA relies heavily on the private insurance markets across the country.”

Another major difference is that the ACA is financially sustainable, while Medicare is expected to become insolvent before 2030. The ACA includes measures to offset the cost of the law, while Medicare spending is growing as its enrollment increases with an influx of baby boomers.

In addition, Blumenthal said, “The Medicare program and the Medicaid program aimed to take care of segments of the U.S. population,” while the ACA “attempts to really much more comprehensively offer coverage to … everyone but the elderly. That’s a much more complicated thing to do.”

Further, “The politics have been very different” with the ACA than they were when Medicare was passed, Blumenthal said.

For one thing, “Medicare was more thoroughly vetted politically before it passed than was the ACA,” Blumenthal said. He noted that legislative models for Medicare were debated for a decade and there had been votes on the program in the Senate during President Kennedy’s administration that “had come close but had not passed.” There also had been two presidential elections — in 1960 and 1964 — in which Medicare was featured, Blumenthal said.

The ACA also “doesn’t have a constituency, and the Medicare program has among the most powerful constituencies that exists in the U.S., and that has enabled the program to overcome the partisan elements much faster than the ACA has been able to do,” he said.

Blumenthal added, “Now, unlike in 1965, almost every large segment of the American population has insurance, the people who don’t have insurance don’t tend to have a unique or separate political identity. … They’re not organizable.”

How the ACA Is Building on Medicare

Meanwhile, the ACA “contains key reforms intended to address some of Medicare’s ongoing challenges,” such as:

  • Closing the so-called “doughnut hole” in the program’s Part D prescription drug coverage;
  • Covering all preventive care services without beneficiary cost-sharing;
  • Creating the Center for Medicare and Medicaid Innovation; and
  • Expanding on payment reforms, including through the Medicare Shared Savings Program, by creating incentives for reduced hospital admissions and hospital-acquired infections, and by expanding pay-for-value programs.

Blumenthal said, “The ACA is part of the solution to the future of Medicare, but not the entire solution. The reforms … that it is trying to promote will be extremely helpful to containing cost in Medicare and increasing value to Medicare patients if those reforms are successful.

 

“A lot of things the ACA is trying to accomplish are core to the Medicare agenda as well,” he added. However, he said, “There are some things … unique to Medicare that would probably require different legislation to accomplish.”

Relatedly, Huberfeld said that while the Medicare-related portions of the ACA are important, “Medicare was a relatively minor part of the ACA.”

A recent New England Journal of Medicine report — which Blumenthal wrote — notes that although “the ACA has filled in some remaining gaps in Medicare benefits, the program still has substantial limitations in coverage.” As a result, about 90% of Medicare beneficiaries are covered by supplemental insurance.

However, Pipes said “the ACA is detrimental to the survival of the Medicare program,” noting that the law “cuts to Medicare over 10 years to help fund the Medicaid expansion.”

Ultimately, the two laws are tied together by a common goal — increasing the insured rate in the U.S.

Regardless of its tumultuous start, Medicare now has strong support by the large group of Americans it is meant to help and the ACA has only made it stronger.

Only time will tell whether the ACA will have the same strong support five decades from now.

Around the Nation

Reform efforts driving up some costs. Sheena Harrison in Business Insurance highlights a study that found health care reform efforts could shift medical costs for workplace injuries to workers’ compensation plans.

Medicaid expansion in Montana. Montana Republicans are pushing legislation that would expand Medicaid eligibility to about 10,000 veterans, low-income parents and some residents with disabilities.

Related Topics

Medicare Road to Reform The Health Law