History of Medicare

It wasn’t until the late 1940’s and the failure of Truman to provide a national health insurance program that the emphasis on the need for elderly care specifically came into view. By this time, private insurance was used by most of the working population but the elderly were left unattended. Most insurers wouldn’t even allow retirees to keep their insurance especially if they were over the age of sixty-five. They also would not sell insurance to seniors because they felt it put their business at greater risks. Washington was in dire need of addressing this issue and in the 60’s momentum appeared to swing toward change. It was at this time that Kennedy promised to develop health care coverage for the elderly. Medicare, as he called it, became his focus. Unfortunately the assassination of Kennedy left this promise in the hands of Lyndon Johnson and Medicare, along with a Part B to cover doctor expense, was signed into law in 1965.

This almost immediately increased the use of medical services and caused a substantial decrease in poverty among elderly Americans. It also provided increased funding for the health care system allowing for hospital construction and medical research. However, as the era of Truman and Johnson subsided, the cost and enormous freedom of doctors and hospitals to increase their fees took its toll and Medicare fell into controversy.

Reagan took on the task of reformation in the 80’s introducing a new hospital payment system that was based on diagnosis and not on services rendered. This effort was to attempt to force hospitals to adopt more cost effective treatments. Set fees for physicians followed soon after. These changes were successful in containing the cost of Medicare but the gradually aging population and the widespread expense of medical technology which kept seniors living longer lives, greatly increased spending. However, by the 1990’s Medicare had proved that it could successfully hold down medical costs as well as private insurers could but still Congress waged controversy on Medicare policies and pressure continued to grow. At one point the government had even attempted a “catastrophic benefit” package which included an extension beyond the normal sixty day hospital coverage and subsidizing a portion of prescription drug costs. The program failed severely as they forced seniors to pay for this program on their own based on income. The elderly greatly protested and the law was removed from the books the following year.

Though we have survived past the 1900’s Medicare still seems to be at the edge of scrutiny. Clearly Medicare has made some ground but recently the American Medical Association and the AARP have joined forces to combat Congress. According to these sources, without congressional action the rates allowed for physician payment will be reduced by ten percent next year. If these cuts aren’t replaced immediately the out-of-pocket costs to seniors could be devastating. As the Medicare formula stands now, it has kept the average physician payment rates at about the same as those in 2001. This prevents physicians from being able to invest in the health information technology and needed staff to provide better treatment. Because of this, less physicians are likely to refrain from participation in Medicare programs causing limited senior care options.

Recent surveys have proven that at least 45 percent of physicians will be forced to stop seeing new Medicare patients and place limitations on current ones unless Congress makes an effort to reform. With the first wave of baby boomers to begin needing care within the next five years, neglect to change the current Medicare system will be devastating. If it’s expected that physicians continue to provide quality care and stay current with new forms of treatment, Congress needs to ensure that payments will maintain a balance with practice costs. The current Medicare policies are flawed and continue to put the elderly at risk each year.