In part Medicare's complexity is dictated by its mandate. Medical and health services require extensive cooperation from both patients and providers. While Medicare is associated with improvements in health among the elderly, both patients and providers routinely follow counterproductive practices. Some patients persist in unhealthy habits (smoking, excessive drinking, and poor nutrition). Others cannot escape from environmental dangers at home or at work. Meanwhile, providers practice the episodic acute care for which they have been trained in expensive well-equipped institutions. Most show little interest in either preventive care or in less intensive forms of treatment for the nonacute chronic illnesses that tend to afflict the elderly.
If we use provision of medical care rather than health as the appropriate objective of Medicare, the inherent requirements for cooperation are still high, but they do appear to fall within the capacities of many providers and patients. Medicare and other federal medical-care initiatives have improved the availability, accessibility, and affordability of medical care.
Beyond requiring complex cooperation from providers and patients, Medicare requires a fairly complex bureaucracy to handle patients' claims and other aspects of program administration. The complicated rules for coverage, copayments, deductibles, and allowable fees place heavy demands on the Social Security Administration (SSA). Medicare recipients are reimbursed for only a portion of their costs, while covered amounts are paid directly to providers. HI claims are processed either by a recognized intermediary—frequently by Blue Cross—or directly by SSA, while SMI claims are handled by intermediaries. (In contrast, public programs that provide direct services, such as the British National Health Service, are generally less complex to administer but have other characteristics—direct employment of the majority of physicians—unlikely to ever be adopted in the United States.) Despite these complexities, SSA administers Medicare in a fashion that
compares reasonably well with the efficiency of many private insurance operations. Medicare does enjoy some advantages—large-scale and easy marketing—that help in this regard.
As was the case with AFDC, some of the most troubling questions about Medicare involve limits and harmonization issues. The first limits issue concerns eligibility. The HI component of Medicare is essentially a program for elderly social security recipients. In 1972 elderly non-social security recipients were allowed to enroll, but they must pay the full actuarial cost for coverage. Only fifteen thousand of the roughly one million elderly in this group have chosen to enroll, with cost the prohibitive factor. A portion of the elderly not covered by Medicare are eligible for Medicaid, and Medicaid has "spend-down" provisions for people who are medically needy but not otherwise recipients of public assistance. But Medicaid, a form of public assistance, is available only to people who have almost no assets.
SMI has from the start been available at the same subsidized rate to all persons sixty-five years of age or older. Over 300,000 non-social security recipients are currently enrolled as well as over 95 percent of the HI beneficiaries.
Medicare's categorical focus on the elderly, of course, excludes the participation of working-aged adults and their dependents, of whom as many as one-third have either no medical insurance coverage or inadequate coverage. Since the late 1970s the issue of cost control has so dominated discussions of public medical-care policy that questions of access have largely been ignored.
Concerns about the costs of Medicare are exacerbated by several harmonization issues. First, Medicare has contributed to the demand for medical services. While rising demand has generally sustained employment in this sector of the economy, it has no doubt contributed to extremely high levels of inflation in this sector as well. Second, policymakers have developed growing misgivings about the activities of recipients and providers. Access to medical care is only one aspect of health care. Healthy personal habits—diet, exercise, defensive driving—and preventive health care are far more cost-effective ways to promote health.
Finally, public respect, even reverence, for the medical profession has declined somewhat in the last decade. The industrial character of medical care in America has disillusioned the public and
policymakers alike. By the late 1970s expansion of Medicare was precluded as much by a reluctance among members of Congress to funnel more money into this segment of the economy as by the resistance of physicians and other medical-care providers.
Medicare's public image—cost issues aside—has been generally good. Even concerns about costs have increasingly been directed at providers rather than at the appropriateness of helping vulnerable elderly citizens defray medical expenses. One explanation for the near absence of controversy is that Medicare's public profile is relatively low. Functioning in a manner similar to a private insurance carrier, Medicare has required no dramatic changes in practice for most recipients or providers. While Medicare does not respect Americans' preference for limited and local government, it is not an intrusive manifestation of government. Additionally, most people think about Medicare in tandem with social security and their good will toward the latter rubs off on the former.