Medicare: Protecting Seniors for 50 Years
by Jessica Schieder, 7/31/2015
Fifty years ago, the United States created the Medicare insurance program – which has significantly increased the affordability of health care for America’s seniors, as well as those with certain disabilities and medical conditions. Today, close to 55 million people are covered by Medicare, and 60 percent of Americans say the program is working well for most seniors.
Before the program was created, only about half of adults older than 65 had health insurance to help them pay for care. For many working Americans, this meant that although care was available at local hospitals and doctors’ offices, they couldn’t afford to pay for it. Without insurance, a medical emergency later in life could easily eat up their retirement savings. These financial difficulties could easily spill over and burden their children and loved ones.
Between 1900 and 1950, the number of seniors quadrupled from 3 million to 12 million, increasing pressure on lawmakers to act.
During the early 20th century, an aging population put pressure on lawmakers to develop solutions to minimize the impact of healthcare costs on the quality of life of the elderly. Seniors, who had made up four percent of the population in 1900, constituted eight percent of the total population by 1950. In fact, in 1935, when the Social Security Act was passed, the issue of senior healthcare was already generating a sense of urgency, but President Franklin D. Roosevelt left it out of the New Deal. He found the issue too controversial and cajoled but did not require doctors to do more to help vulnerable people.
President Harry Truman unsuccessfully advocated for national health insurance during his presidency – first in 1945 and later in 1949. But the media reacted harshly to his national health insurance proposal, and the American Medical Association strongly opposed it, launching a well-financed public relations campaign that villainized “socialized medicine.” Truman's proposal was ultimately defeated.
Nonetheless, during Truman’s administration, federal aid for the construction of health care facilities increased access to health services among the poor. The Hill-Burton program made federal aid to hospitals dependent on their willingness to provide services to those unable to pay.
Support for a national health insurance plan grew in the late 1950s. Newly elected Democrats in Congress felt the government should address a broader range of social problems, especially given the strong economic growth the country was experiencing. In 1960, presidential candidate John F. Kennedy visited Hyde Park in New York to celebrate the 25th anniversary of the Social Security Act with former First Lady Eleanor Roosevelt. Kennedy used the opportunity to call for national health insurance for seniors. However, despite an aggressive public relations effort, Medicare as we know it today would have to wait for his successor.
After President Lyndon Johnson’s election victory in 1964, he prioritized the creation of national health insurance as a part of a second New Deal. In 1965, Johnson created a legislative coalition of pro-Medicare Democrats that beat the conservative opposition in both chambers. On July 30, 1965, Johnson signed Medicare (as well as Medicaid) into law with former President Truman standing beside him, who he acknowledged as the “the real daddy of Medicare.”
The plan's passage was met with skepticism and outrage from conservatives.
Even among the plan’s supporters, there were concerns that seniors who were most in need of coverage would be unable to enroll. But an outreach campaign was mounted to contact and enroll seniors – both in person and through mail – and almost all of the 19.1 million eligible elderly had been enrolled in Medicare by the time the health insurance plan went into effect.
The creation of Medicare guaranteed all Americans over the age of 65, as well as those with certain disabilities and medical conditions, access to health insurance so they could afford to see a doctor. As health care costs have continued to increase, the guarantee of affordable health insurance has protected seniors from financial devastation.
One of the most overlooked benefits of Medicare: the racial integration of hospitals.
Beyond cost controls, Medicare revolutionized health care for minorities and the poor. At the time of Medicare’s passage, Jim Crow laws in the South excluded blacks from many hospitals, and in the North, discrimination often made it impossible for black physicians to work in predominantly white hospitals. In order to receive new federal Medicare funding, a hospital had to fully comply with the Civil Rights Act. Unwilling to forfeit the new federal funds, hospitals, especially in the South, accepted integration quickly and surprisingly quietly.
Today, Medicare accounts for 22 percent of total health care spending in the United States.
Medicare is the primary source of health insurance for Americans over the age of 65. The insurance is divided into four parts. Qualified individuals can enroll in original Medicare (Part A hospital insurance coupled with Part B medical insurance) or Medicare Advantage (Part C), which is private-sector insurance provided by Medicare. Prescription drug coverage (Part D) is a popular supplemental option that allows seniors to better protect their pocketbooks while paying for prescriptions.
Of the program’s 55 million enrollees, 46.3 million are seniors and 9 million are people with permanent disabilities. Medicare remains an earned benefit. Americans support Medicare by paying payroll taxes over the course of their working lives before becoming eligible for the program at age 65. The program remains open to seniors at all income levels regardless of health status.
Today, 77 percent of a representative national sample of American adults say the insurance provided by Medicare is “very important;” this is a higher percentage than the support for federal aid to schools, defense spending, and loans for college students.
To protect Medicare, the Affordable Care Act has made small but important improvements to the program. Included in the changes is a provision that increases the payroll taxes the wealthiest workers pay to help support Medicare. Since enactment, the Affordable Care Act has extended the lifespan of the trust fund supporting Medicare’s Part A hospital insurance program by 13 years.
While inflation and an increasing number of seniors will continue to put pressure on Medicare, there’s plenty of reason to believe this highly popular program will continue to provide affordable health insurance to seniors and others for another 50 years.
Happy Birthday, Medicare!
Celebrate Medicare’s 50th Anniversary with these fun tools.
- Medicare #NextFifty Crossword Puzzle: Test your Medicare know-how with this crossword puzzle from our friends at the National Committee to Protect Social Security and Medicare.
- The Story of Medicare: A Timeline: Watch this short video on the history of Medicare, written and produced by the Kaiser Family Foundation.
- Share Your Medicare Story: The Centers for Medicare and Medicaid are collecting stories of how Medicare has improved the lives of beneficiaries, their families, and their communities. Sharing how Medicare has protected you or your family is a great way to say “Thank you!” to the public servants running the program.