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Healthcare: Policy Implementation and Modification Research Paper

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Updated: Mar 4th, 2022


Since the enactment of the Medicare Policy Act in 1965, the act has undergone several amendments in a bid to improve the level of accessibility and quality of health insurance coverage to all Americans. Such amendments have drawn a lot of debate on how accurate or feasible they are in a fast changing population where its demography, wealth distribution and cultural dynamism points to the necessity of constantly evaluating some clauses of the act.

In November 2003, the Bush administration introduced an amendment to the act called the Medicare Prescription Drug, Improvement, and Modernization Act, though controversially. As expected this bill had some positive and negative aspects according to various stakeholders. In this paper therefore, we analyze the bill in deep tracking its necessity and its alleged positive and negative impacts on the stakeholders.


This bill sought to correct the errors and failures of the Balanced Budget Act of 1997 according to its sponsors. This early bill was simply meant to allocate more money to the Medicare program to avert its eminent collapse and therefore somehow hastily drafted with no clearly defined long term objectives and thought out implications (Ferrara, 1998). They (sponsors) viewed it would enhance quality and accessibility in health insurance and healthcare in general by prolonging the life of the Medicare program by ensuring Medicare Program’s financial security. As such, it can be said that the bill was meant to fill some gaps.

But were there any gaps to be filled? “The problem is not just that Medicare’s funding will be insufficient to pay promised benefits in a few years. Over the long run, the program’s financial gaps become truly enormous.” (Ferrara, 1998). Such criticism was fronted immediately after the 1997 bill setting a good stage for an amendment act in the Medicare program.

According to the initial drafters and sponsors of the bill, it was aimed was to make prescription drugs more accessible to the terminally ill and generally make health insurance more affordable and of high quality by assisting in payments and lengthening life of some programs. In addition, it increases beneficiary cost sharing responsibilities. (Summary of Medicare Act, 2004). In passing of the bill the senate approved $400 billion plan to overhaul Medicare.

This new act introduced a new Part D in Medicare for persons already enrolled in Part A or B. Members would be eligible to obtain qualified prescription drug coverage either through a stand alone prescription drug plan (PDP) or through a Medicare Advantage plan (MA-PD). On the other hand it imposed substantial penalties to persons who had failed to enroll in this plan early. These penalties were estimated to be greater than the cost of an uncovered month as compared to the national average monthly beneficiary base premium.

In a bid to fight rampant corruption in the Medicare Program, the Act prohibits the Secretary of Health and Human Services (HHS) from entering into drug price negotiations with drug companies on behalf of the 41 million Medicare beneficiaries (Medicare Modernization Act, 2004).

This bill does not meet what it was intended for. In the first place, it is apparent that new penalties imposed on late enrollers in fact increases the cost. Again, the act did no preserve neither strengthen the original Medicare Act but entirely replaced it. It also indicated that, the proposed premium of $35 per month is not uniform and may actually be higher than that hence no assurance of lowered health costs in reality (Myths and Realities About the New Law, 2008).

The bill was as reported by CNN “a centerpiece of President Bush’s domestic agenda.” His idea was simply to increase quality in healthcare and healthcare insurance through facilitating competition between private health insurance providers and Medicare though this was done the wrong way.

Though this might have not been given much weight in the debate of the bill, employers were also set to benefit and thus played a role in influencing the policy change. This is because with the act, “the law allows companies to receive the 28 percent subsidy regardless of size of the premium they charge retirees for coverage. So some employers may expand their drug coverage, charge a correspondingly higher premium, and still collect the 28 percent government subsidy” as there were very few regulatory frame works put in place to go along with the bill (Medicare Modernization Act, 2004).

Earlier indications had showed that the bill would not go through the House and the Senate but a sudden turn of events where it passed through raised eyebrows. It was reported that President Bush made personal phone calls on the eve of the voting to woo members of the House into approving the bill. As a result the bill made it through the house after an initial flop of 216 against 218 but another vote produced a 220 against 215 victory (CNN, 2003). Again there were reports that drug companies had bribed and offered gifts to senators in order for them to approve the bill. Though most of these arguments cannot be verified, the sudden change in voting patterns indicates that something fishy transpired in the final moments of debate over the bill.

This bill was passed by Senate and signed by the president into law despite calls from various directions for some clauses to be readdressed and corrected. Unfortunately the bill passed through senate voted 54 against 44. “Supporters say it will give prescription drug coverage to 40 million older Americans, while critics warn that it could destroy the system.” (CNN, 2003). One of the notable supporters of the bill Sen.

Dianne Feinstein of California hailed the bill as one of the greatest in American history. Senate Minority Leader Tom Daschle speaking against the bill said that once the ordinary senior citizens were exposed to the harsh realities of the bill, they would call for the reintroduction of the original Medicare bill of 1965. Politicians thus secretly courted private players in the industry such as AARP to endorse the bill which they did (Welch, 2003)

Again the total cost of implementing the program was not accurate. According to the Congressional Budget Office (CBO), implementation within 10 years would cost approximately $400 billion but the Bush administration put the estimates $535 billion within the same period. Again these could even turn more costly within the next 10-year period estimated to increase to $1-2 trillion (Medicare Modernization Act, 2004)

Detractors of the bill are of the view that it a waste of taxpayers’ money and that it will force senior citizens who are increasing by the day to paying for inadequate and expensive health plans. On the other hand supporters of the bill who interestingly constituted many private health providers and drug companies supported the bill saying it would provide the best health cover worldwide for seniors in the belief that competition between by the government funded Medicare Program and the private sector will drive down the cost of drugs.

Opposers of the bill however pointed out that the fact that the government provided funding to both eliminated the idea of competition and as such competition was just a façade to help drug and private insurance companies playing their cards behind the scene. Flanigan (2003) calls this bill a shot in the arm for drug middlemen, drug companies and stakeholders in the pharmaceutical industry.

The formulation of this bill seems to have been well formulated. It seems that access of patient health information contributed in shaping the bill in that it was very easy to estimate the amount and worth of drugs that seniors consume and hence forcing them into a single consuming block would form a solid market segment ripe for exploitation.


As much as the Act remains as a law, Americans will continue being served by the massively unpopular reform. While there have been arguments that the reform allowed for long term savings for healthcare, the immediate costs are not worth it. What is apparent now is that persons and especially seniors on private health coverage continue to pay more and it compromises on personalization of care due to the prescription drug plan.

Unfortunately, the real benefits of the plan, if any will not be realized unless the public fully trusts and beliefs in the plan and gives it full support of which it does not currently have. On a brighter note, the current administration may be expected to reform the act further as Obama as a senator opposed the bill and promises another overhaul. In short, the MMA has flopped and there is need for an overhaul (Levy, 2008).


CNN (2003). . Web.

Flanigan, J., (2003). “New law a boost for middle men”, LA Times. Web.

Ferrora, L., (1998). Balanced Budget Act of 1997. Web.

Levy, N., (2008). “They want healthcare reform stat”, LA Times. Web.

Medicare Modernization Act of 2003, (2004). Web.

Myths and Realities About the New Law, (2008). Web.

Summary of Medicare act of 2003, (2004). Web.

Welch, W., (2003). “”, US Today. Web.

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