Beyond Beneficiaries: Using the Medicare Program to Accomplish Broader Public Goals

I. IntroductionWhen Congress created the Medicare program in 1965, its purpose was to provide hospital and medical insurance for persons over the age of sixty-five, not to accomplish broader societal goals. The original Medicare statute1 and its legislative history2 indicate a congressional intent to provide health insurance coverage for a specific group of people. At that time, Congress viewed the availability of health insurance for the elderly more as a means to avoid dissipating their assets than as a means to eliminate financial barriers to care.3 Some advocates and some members of Congress envisioned the 1965 legislation as merely the first step in providing more comprehensive benefits and expanding eligibility to persons under the age of sixty-five.4 However, no persuasive evidence exists that in 1965 Congress intended to use the Medicare program as a mechanism to support the healthcare infrastructure, assist non-beneficiaries, or improve the health status of the broader community.5 In fact, Congress explicitly provided that the Medicare program should only pay providers for the costs of treating Medicare beneficiaries and not for the costs of treating any other patients.6Despite that limited original purpose, the Medicare program has become a vehicle to accomplish public goals that go beyond covered services and beyond eligible beneficiaries. These broader goals are pursued by: (1) threatening to take funding away from providers who fail to do certain things, such as provide indigent emergency care; (2) giving additional money to providers who actually do certain things, such as provide graduate medical education; (3) regulating certain aspects of the private insurance market, such as prohibiting the sale of supplemental insurance policies that fail to meet federal requirements; and (4) educating enrollees about matters of health and insurance, by distributing written materials and utilizing the internet, for example.In amendments to the original Medicare statute, Congress directed the Secretary of the United States Department of Health and Human Services (the Secretary) to assist Medicare beneficiaries in purchasing goods and services not covered by the Medicare program. The federal government now regulates-or assists states in regulating-the commercial market for Medicare supplemental insurance,7 and the secretary operates a beneficiary assistance program8 to help Medicare beneficiaries with the receipt of services under health insurance programs other than Medicare.9 Recently, the Centers for Medicare and Medicaid Services (CMS) of the Department of Health and Human Services (HHS) relied on this statutory authority in its effort to assist Medicare beneficiaries in purchasing noncovered outpatient prescription drugs by means of a Medicare-endorsed prescription drug card assistance initiative.10 In addition to helping Medicare beneficiaries obtain non-covered goods and services, Congress has used the Medicare program to assist non-beneficiaries, by using Medicare participation as a jurisdictional hook for provider mandates that apply to non-Medicare patients as well as Medicare patients. These mandates include requirements for participating hospitals to provide emergency care without regard to a patient's ability to pay, to advise patients about their rights to refuse treatment and make advance directives, and to participate in other government payment programs.11 Finally, Congress uses Medicare funds for the benefit of the broader community by paying for public goals such as medical education and indigent care.The National Academy of Social Insurance (NASI) recognized the importance and complexity of these issues by forming a Study Panel on Medicare's Larger Social Role, which issued its final report in February 1999.n According to the NASI study panel, Medicare's broader social roles are important both politically and socially, but the financing of public goals should be considered as policy issues apart from the ongoing debate about preserving and reforming the Medicare program. …