Medicare’s Past and Uncertain Future for People with Disabilities
If you are one of the 8.82 million people collecting Social Security disability benefits, you know how important Medicare is to you. But how much do you know about this federal health insurance program?
A Low-Cost Health Care Solution for the Elderly
When Medicare was first signed into law in 1965, it was not available to people with disabilities. The social health insurance program administered through Social Security was for the elderly.
It took decades to happen. Teddy Roosevelt, way back in 1912, was the first president to suggest a national health insurance system. Years later, President Harry S. Truman pushed for a national health insurance fund. In 1945 he advocated, “Health insurance for all. Regardless of residence, station, or race – everywhere in the United States.”
National debate dragged on until the 1960s, when it became painfully obvious to private insurance companies and the federal government that the elderly could not afford adequate health insurance on their own to cover rising costs for care. This was a group of Americans who had paid into the Social Security system through work but now had less than half the income they once had and three times the need for medical care.
It was President Lyndon Baines Johnson who signed Medicare into law on July 30, 1965. He said, “This is a landmark day in the historic evolution of our social security system.” He then presented 81-year-old Truman, hailed as “the real daddy of Medicare,” the first Medicare card.
Medicare Expands to Cover Younger People with Disabilities
In 1972, President Richard M. Nixon expanded Medicare to help with health care costs for another group of people on limited income – people younger than age 65, with severe, ongoing medical disabilities, receiving Social Security disability insurance.
However, there is one stipulation still in effect today – a 24-month waiting period from when their first monthly disability benefit is paid. This rule continues to be a bone of contention with disability advocates, saying that the wait for Medicare causes another hardship for people with disabilities. Whether this rule will ever change remains to be seen.
The Medicare Alphabet of Coverage
In 1965, Medicare only consisted of two parts: Part A, which is hospital insurance paid for by employee-employer payroll deductions and is free to those who have contributed through past work; and Part B medical insurance, which covers other medical services and is an optional program. A monthly premium is deducted from Social Security benefits for those who opt for Part B.
Today, Medicare consists of four parts: Part A; Part B; Medicare Advantage (Part C), which is an option for using private medical insurance plans for Part A and Part B; and Part D, which is an option for prescription drug coverage.
Statistics Shake Up the Future of Medicare
As Congress wrestles with how to control national debt, Medicare has become a hot topic in the federal budget debate. Here are some reasons why:
- On July 1, 1966, when Medicare went into full effect, the number of people age 65 and older enrolled in the program was about 19 million. Today, that number has swelled to nearly 50 million, and will continue to increase as more baby boomers become medically disabled or reach age 65.
- People are living longer, which means that many are on Medicare for a longer period of time. In 1970, the average life expectancy was 71. In 2010 it moved up to age 78.
- Hospital costs for Part A have gone up. Government analysts project that the Medicare Trust Fund used to pay for hospital costs will run out of money by 2024.
- Medical costs for services have gone up, too. The Part B premium percentage taken out of an average Social Security benefit in 1970 was just 6%. In 2010 it was 27%.
- Medicare spending represents 15% of the federal budget and is expected to grow as health care costs continue to rise and more baby boomers enroll in the program.
We will have to watch closely in the coming months as both sides of the political aisle discuss Medicare’s future.
For more on the history of Medicare, watch the video: The Story of Medicare: A Timeline, by the Kaiser Family Foundation.
For more information about Medicare, visit the official Medicare Web site: www.medicare.gov.