It’s easy to forget that before 1966, roughly half of all seniors were uninsured, living in fear that the high cost of health care could propel not only them, but their families, into poverty. Few of us remember that not that long ago, far too many disabled people, families with children, pregnant women and low-income working Americans were unable to afford the medical care they needed to stay healthy and productive.
Fifty years ago, on July 30, 1965, the landscape of health care in America changed forever when President Lyndon B. Johnson signed the landmark amendment to the Social Security Act, giving life to the Medicare and Medicaid programs.
A study published by the Pew Research Center, citing U.S. Census data, underscores the significance of the programs. It said 28.5% of Americans age 65 or over were impoverished in 1966, a year after the passage of the Older Americans Act and additions of Medicare and Medicaid, compared with 9.1% in 2012, the most recent year with a complete set of data available.
Today, Medicare and Medicaid cover nearly 1 out of every 3 Americans—that’s well over 100 million people. Medicare and Medicaid save lives, helps people live longer, and provide the peace of mind that comes with affordable health care that’s there when you need it.
However, as Medicare approaches its 50th birthday, health policy analysts have been giving the program a detailed exam, concluding that although Medicare remains widely popular, it has some long-term health concerns.
Looking into the near future, 2030 will be a watershed year as the youngest of the baby boom generation becomes eligible to receive Medicare. It is also projected to be the year when the trust fund supporting the federal program will become insolvent.
Potentially raising the eligibility age for Medicare recipients has been a sensitive policy topic that continues to come up. Overall, controlling costs will require some sacrifices in coverage that beneficiaries are often not willing to accept. One potential option would be to reduce the nearly unlimited coverage and give beneficiaries $75,000 in a lump sum.
The total value of Medicare benefits for an individual’s lifetime was $131,000 in 2010. By 2030, that figure will rise to $223,000. Medicare beneficiaries now spend 15% of their income on out-of-pocket expenses.
When individuals purchase car insurance, they are often willing to forgo some damage protection to save on premiums. However, their expectations are much different when buying health insurance, according to Gregory Daniel, Ph.D., M.P.H., a research fellow at Brookings. Brookings Center for Health Policy.