Medicare: Fifty Years of Service for Older Americans

MedicareBy Bob Schelen

This week is the 50th anniversary of Medicare. In July 1965, President Lyndon B. Johnson signed into law legislation that created the Medicare program. Since its inception, Medicare has nearly served over 100 million Americans. Over the years, coverage has been improved by the inclusion of services such as home health care, hospice care, outpatient care and many preventative services as well.

Today, Medicare is the nation’s largest health insurer, providing coverage to over 40 million Americans, proving that such government-run programs can be efficient, workable and affordable. The program has paid for health services to prevent or detect diseases in their early stages – when they are most amenable to treatment. And, it must be remembered that the Health Care Initiative of 2009 (Obamacare) did nothing to limit or abolish Medicare, but made changes that will make Medicare more efficient and allow the program to be offered to more people.

Because of the changes made by Obamacare, Medicare now covers these preventative health benefits:

  • Annual mammograms;
  • Pap smears;
  • Colorectal cancer exams;
  • Prostate cancer screenings;
  • Bone mass measurement;
  • Glucose monitoring and diabetes education programs; and
  • Flu, pneumonia and hepatitis B vaccinations

Ironically, many of those that opposed the 2009 federal Health Care initiative (Obamacare) supposedly because of changes it made to the Medicare program keep supporting efforts to change Medicare from its successful formula to a privatized voucher enterprise to completely phase it out.

In the past, Medicare has proven to be a remarkable success. Since its enactment, there has been a 50 percent reduction in elderly Americans living in poverty. Indeed, Americans over 65 now have the highest life expectancy of seniors anywhere in the world. One of the best ways to commemorate the success of Medicare is by making sure that eligible seniors and disabled residents make use of the preventative benefits Medicare now offers.

On July 1, 1966, Medicare began paying for health-care services for Americans over the age of 65. About 70,000 of those first beneficiaries are still receiving Medicare benefits as they reach their 100th birthday.

Medicare is one of the most popular federal programs in country and it gets universally high marks from beneficiaries and their families. Proposals to privatize and/or make Medicare a voucher program would change many of the components of the program that people praise and very likely, see prices rise and health care for seniors diminish. This cannot be allowed to happen.

Still, even with the favorable changes from the federal law, millions of Californians continue to be unable to buy affordable supplemental insurance and HMOs are dropping the beneficiaries most in need of their help. Despite the success of the Medicare program, today’s seniors continue to spend about 20 percent of their income on health care because of gaps in coverage and increased out-of-pocket expenses.

That is why, we need to find ways to create better health access for older and, indeed, all Americans.

About The Author

Disclaimer: the views expressed by guest writers are strictly those of the author and may not reflect the views of the Vanguard, its editor, or its editorial board.

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  1. Tia Will

    Thanks for the article Bob.

    I want to highlight one part.

    “Because of the changes made by Obamacare, Medicare now covers these preventative health benefits.”

    My job has allowed me to see first hand the health care benefits of prevention of cervical cancer by early treatment of pre-cancerous conditions of the cervix. This has been made possible by the provision of first Pap smears, and during my time in medicine the addition of HPV screening with its improvement in detection while reducing the number of times a woman has to be screened in her lifetime to effectively prevent rather than having to treat cervical cancer once it has advanced to that stage. For those who are not aware, this is the difference between a 1/2 hour office procedure requiring no additional time off work or from usual daily activities when detected early vs hysterectomy and possibly radiation when the condition has been allowed to advance. To say nothing of the lives saved since this is a highly lethal cancer when left to advanced stages without treatment.

    “That is why, we need to find ways to create better health access for older and, indeed, all Americans”

    To me, there is no justification for allowing any member of our community to not have access to full preventive services. We know what to do. Many other comparably advanced countries have already done it. All we need is the political will to accept universal health care as a right of our population.

  2. TrueBlueDevil

    Mr. Schelen – where is he from? – doesn’t even give us half the picture. Neither does Tia.

    Lessons From the 50th Anniversary of Medicare and Medicaid
    By Dan Gilmore

    “This is not what the progressive politicians who created Medicare and Medicaid 50 years ago this week told the country. The “Great Society” was supposed to banish poverty from the land, while bringing care for the elderly and disabled. Today, over a third of the U.S. population is on Medicare and Medicaid, and federal spending has a tendency to be sucked into the programs’ gaping maws. Today, more than quarter of every dollar the federal government spends goes to the two programs. They are also the biggest expense for state governments. But for all that spending, the programs’ trust fund is on track to run out of money in 15 years. Meanwhile, the Baby Boomer generation is signing up in droves and $60 billion is lost every year to waste and fraud. This is not what the programs’ architects wanted Americans to think would happen. Fifty years ago, they estimated the programs would cost $12 billion in 1990, but it actually cost the government $90 billion. Another government program, now five years old, also promised to trim health care costs through more government intrusion and regulation. Just wait until ObamaCare turns 10, much less 50.”

    1. TrueBlueDevil

      The Federalist: 50 Years Later, Medicaid And Medicare Still Spend Us Into Oblivion

      “Same thing for Medicaid. In states that opted into the Affordable Care Act’s Medicaid expansion, enrollment and taxpayer costs are already far outpacing projections. The federal agency that oversees Medicaid recently said the cost of covering people newly eligible for Medicaid was about $1,000 more per person than expected. (Of the 5.7 million new Medicaid enrollees last year, 4.7 million were newly eligible under the ACA.)”

      “Of course, it wasn’t supposed to be this way. Wasn’t the ACA was supposed to fix healthcare? Remember when President Obama said the ACA would lower the average premiums by $2,500 for a family of four? It never happened. Instead, premiums have gone up since the passage of the ACA—by some estimates, the increase in national health spending under Obamacare will amount to an average premium increase for a family of four of $7,450.”

      “What does it all mean? It means that after 50 years, we have the same healthcare spending problems we did right after we created Medicare and Medicaid, and if we want to solve them we’re going to have to try something else besides price controls, mandates, subsidies, and ever-more regulations—all the things we’ve been doing since the late 1960s, most of which Obamacare ratcheted up.”


      1. Matt Williams

        TBD: “What does it all mean? It means that after 50 years, we have the same healthcare spending problems we did right after we created Medicare and Medicaid”

        This is a very good point TBD, and it illuminates one of the very basic truths of healthcare in the United States. For virtually every medical procedure, medical test, and medical service the amount of money paid to the medical provider by the insurer is lowest for Medicaid, in the middle for Medicare, and highest for the private sector insurance companies. The bottom-line reality of that is that on a per unit basis the spending problem is much less for Medicare and much, much less for Medicaid than it is for private sector insurance companies.

        Wonder why some doctors grumble when a Medicare patient walks in the door? It’s likely because the government program typically pays only 80% of what private insurers do. Medicare has the bad rap of being a big, bloated government program, but it’s not because it’s overpaying doctors. CNNMoney analyzed the “allowed charges” for five common procedures, using data provided the Centers for Medicare and Medicaid Services and Truven Health Analytics, a research firm. The differences can be stark. Private insurers allow an average of $1,226 for low-back disc surgery, while Medicare will only permit $654, for instance.

        Further, Medicaid pays about 61% of what Medicare pays, nationally, for outpatient physician services. The payment rate varies from state to state, of course. But if 61% is average, you can imagine how terrible the situation is in some locations.

        1. Tia Will


          So, what do you propose as a “solution”?”

          Some version of single party payer. There are many models to choose or mix and match from. Many affluent, modernized countries have solved this dilemma, provide full care for their entire populations at much less that we spend per person per year, and have better health statistics in many areas that we do.

          One problem is that instead of really looking at the strengths and weakness of each model and determining which might be feasible for us, there are segments of our society that want to claim “socialism” as a great evil that they would  never consider instead of seeing what aspects of these approaches that we might successfully adopt.


        2. Matt Williams

          I’ve been out of town, so haven’t had a chance to address pierce’s question until now.

          Before even considering any solutions, it is important to be sure we have a good understanding of the problem. The first step toward understanding the problem is to set aside Medicaid unit prices because they are set artificially low. That leaves us with a comparison of (A) Medicare with (B) private sector insurance companies. Why are Medicare prices for the same services so much lower than private sector insurance companies? The answer to that question is the size of the risk pool that is used to spread the fiscal risk that comes from the health risk of the patients in each respective pool. In 2012 the total number of Medicare beneficiaries was 49,435,610. The largest private insurer Wellpoint/Anthem (which includes Blue Cross of California) covers 28,000,000 beneficiaries in a total of 13 states. The problem is that Wellpoint/Anthem has to operate independently in each of those 13 states and as a result the risk pool in each of those subsidiaries is only a small portion of the 28 million total. As a result, the amount for general health risk mitigation built into each unit charge by Blue Cross of California is considerably more than the amount for general health risk mitigation built into each unit charge by Medicare.

          Said another way, the larger the number of beneficiaries in a risk pool the lower the dollars are that are added to each unit charge for general health risk mitigation. Because Medicare does not have to break its risk pool into individual small state-by-state subdivisions, it is much more efficient at handling the fiscal impact of health care risk. There are 88 million beneficiaries covered by Blue Cross plans nation wide. If those 88 million beneficiaries were put into a single nationwide risk pool, then that “unified Blue” plan would be even more fiscally efficient than Medicare is. If you combined the 88 million with Medicare’s 49 million into a single risk pool, that 137 million beneficiary pool would be even more efficient and effective at spreading the fiscal impact of health care risk.

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