Fifty years ago, on July 30, 1965, Medicare was signed into law by President Lyndon Johnson. The program has been keeping our oldest citizens – and those with disabilities – out of poverty ever since. Before Medicare, less than 50 percent of people ages 65 and over had health insurance, 35 percent lived in poverty, and life expectancy was much lower than now. But despite its tremendous success, Medicare faces significant threats. We need to redouble our efforts not only to protect the program, but to strengthen it.
Throughout its history, Medicare has been effective at reducing poverty for older people and people with disabilities, and at increasing access to health care. In the program’s very first year, more than 19 million people over age 65 enrolled; access to care increased by one-third; poverty among older and disabled Americans decreased by nearly two-thirds; and personal economic security increased for older people and their families.
As Congresswoman Rosa DeLauro said, “Medicare is a bedrock part of the American social insurance system.” It has provided peace of mind for millions of Americans, who know they will have reliable health care coverage in retirement. The program covers people most in need of care—people who often wouldn’t be covered by private insurers or couldn’t afford such insurance. It also strengthens families by limiting the financial burden of health care costs for their older and disabled relatives.
Many people are unaware that Medicare has also helped change our society. For example, its creation was a huge boost for civil rights. Any hospital wishing to collect Medicare funds had to desegregate to qualify for payments. As a result, thousands of hospitals fully desegregated in only four months.
Medicare has seen many positive changes. It added hospice coverage in 1982 and now almost half of beneficiaries who die use this important benefit. In 2008, Medicare coverage of mental health services changed, so that these services were reimbursed at the same rates as other Medicare-covered services delivered in the same care settings. As a result, hospital care for mental health services no longer costs more than hospital care for a physical health problem.
In 2010, the Affordable Care Act added a decade of economic security to the Medicare Trust Fund, increased free preventive services, and increased parity between traditional Medicare and private Medicare plans.
A recent “improvement” came about as a result of work by the Center for Medicare Advocacy – where I serve as the Executive Director – and by our partners at Vermont Legal Aid. When Medicare beneficiaries have a chronic condition, such as Alzheimer’s or Multiple Sclerosis, they often need skilled care in order to maintain their condition or slow deterioration. Medicare regularly denied such coverage because the beneficiaries weren’t “improving.” This harmful practice impeded access to necessary care and placed an unfair burden on families who were forced to pay for these services. As a result of a 2012 settlement with the Centers for Medicare & Medicaid Services, coverage for skilled care can no longer be denied simply because an individual isn’t improving. Coverage is available for skilled care to maintain an individual’s condition.
Despite Medicare’s success, it faces threats like never before. From privatization to coverage denials, to political pressure that would limit coverage and increase costs for beneficiaries in the future. However the Center for Medicare Advocacy is advocating for a number of common sense solutions that would better protect beneficiaries and help improve Medicare’s financial security, without cutting benefits or coverage. These include:
- Paying Medicare Advantage at the same rates as traditional Medicare. Private plans should not be paid more than traditional Medicare. This would save more than $132 billion dollars over 10 years;
- Adding a prescription drug benefit to traditional Medicare;
- Requiring Medicare to obtain the best prices for prescription drugs — — which would save more than $141 billion over 10 years;
- Fixing the broken Medicare appeals system by eliminating one of the first levels of review. The vast majority of reviews at the initial and second levels are “rubber stamp” denials which simply add bureaucracy and waste money. This would save around $100 million per year in operating costs.
Medicare works well for the American people and it has for 50 years. Let’s ensure that it stays strong and continues to open doors to health insurance and health care for our nation’s most vulnerable people and their families.