Is Medicare "reform" just a privatization ploy? | Behavioral Healthcare Executive Skip to content Skip to navigation

Is Medicare 'reform' just a ploy to privatize?

October 12, 2017
by Ron Manderscheid, PhD, Exec Dir, NACBHDD and NARMH
| Reprints

Recent discussions by members of the 115th Congress and the Trump administration again have raised the specter of Medicare “reform.” Although they lack necessary key details, these talks seem to have two consistent threads: a private locus for program operations and a variable insurance benefit structure. Both will be discussed below.

For more than five decades, Americans have come to rely upon the federal Medicare program, which has a well-defined benefit structure for hospital, ambulatory, and, more recently, drug treatment. We have strongly and consistently opposed privatization of Medicare and additional restrictions on Medicare benefits. 

Before discussing “reform” options further, however, it is important to summarize the major features of the current Medicare Program.

The program

Medicare is a federal health insurance program for persons who are older (65+) and those with disabilities who have either worked under Social Security themselves or are a child or an adult child of a person who has worked under Social Security. Persons with disabilities have a two-year waiting period before they can qualify for Medicare benefits. The program has four components: Part A-hospital benefit; Part B-medical benefit; Part C-Medicare Advantage-private insurance that replaces Parts A and B, and includes additional benefits; and Part D-prescription drug benefit. Generally speaking, Part A is mandatory, and Parts B, C and D are optional at additional cost.

Part A helps pay for inpatient hospital care (limited to 190 days over a lifetime for psychiatric care in a psychiatric hospital), some skilled nursing facilities, hospice care, and some home health care. Part A is premium-free for most people because of earlier payroll tax deductions.

Most beneficiaries do pay a monthly premium to be covered under Medicare Part B – the part that helps pay for doctors, outpatient hospital care, and some other care that Part A doesn't cover, such as physical and occupational therapy. In 2014, the Part B deductible for mental health care finally achieved parity with the deductible for medical care at 20%.

Part C allows various health maintenance organizations and similar healthcare programs to offer health insurance plans to Medicare beneficiaries. At a minimum, they must provide the same benefits that the original Medicare program provides under Parts A and B. Part C organizations also are permitted to offer additional benefits such as dental and vision care. But, to control costs, Part C plans are allowed to limit patient choice, a major disadvantage if a patient's doctor or hospital is not a member of their networks.

Medicare's Part D provides prescription drug benefits through various private insurance companies. Like Part B, most people pay extra premiums each month to be covered for prescription drugs under Part D.

In 2014, 54 million persons were covered by Medicare. Of this number 45 million were older Americans and 9 million were persons with disabilities.

Medicare is exceptionally important for persons who have mental, substance use, or ID/DD conditions. About 26% of all Medicare beneficiaries experience some mental disorder, including cognitive disorders like Alzheimer's disease. Further, between 8 and 14% of Medicare beneficiaries have a substance use condition, and almost 2% had an ID/DD condition.



Ron Manderscheid

Exec. Dir., NACBHDD and NARMH

Ron Manderscheid


Ron Manderscheid, Ph.D., serves as the Executive Director of the National Association of County...

The opinions expressed by Behavioral Healthcare Executive bloggers and those providing comments are theirs alone and are not meant to reflect the opinions of the publication.