Happy Birthday Dear Medicare!

Diana Stein

Professor Emeritus, Mount Holyoke College

Massachusetts League of Women Voters Amherst Health Care Committee

Medicare, our own government health care system for those 65 and older was enacted in 1965 and signed into law by then President Lyndon Johnson on July 30th. The very first person to sign up for Medicare was former President Harry Truman!

Truman had advocated strongly for a compulsory National health insurance program. He had hoped to have legislation passed during his time in office that would provide health insurance for all, and his failure to defeat the organized opposition was a bitter disappointment.

But in the first half of the 20th century, that opposition included many powerful groups, which fought against any government health insurance. These groups included the American Medical Association, the Insurance Economics Society of America, the Pharmaceutical Manufacturers Association and even the American Federation of Labor under Samuel Gompers (labor subsequently changed sides). The power of these groups was such that, although a majority of Americans wanted government health insurance in 1942, efforts during Roosevelt’s, Truman’s and Kennedy’s terms failed.

Social Security helped those who were over 65 but did not protect the elderly population against the high cost of medical care. Such costs reduced many to poverty. The elderly population had grown from 4% of the population in 1900 to 8% in 1950 and 9.4% in 1963 (currently they are about 12% of the population. The income of this group is generally lower than the rest of the population and is fixed or declining. As health care costs rose, the insurance companies began reducing their coverage while raising their fees. As a result, only about one out of four of the elderly had adequate hospital insurance coverage; yet this vulnerable group has 2 1/2 times the need for health care services as the general population.

By the 60s, the time was ripe for Medicare. Even the insurance companies were recognizing that it was not really as profitable to insure the elderly with their greater needs as it was to insure those who were younger. President Johnson had been re-elected by a wide margin in 1964, and he was very effective at working with Congress to get the needed legislation passed and signed into law.

And we can be very grateful for what Medicare has accomplished.

Before Medicare was passed only 44% of seniors were insured and now only 1% of this population lacks coverage.

During the decades since this legislation was enacted, we have seen life expectancy rise from 70 years (1965) to 77.4 years (2005). Many medical advances have occurred that are partially responsible for this increase, of course, but insured health care for the elderly has played a part too. Studies have shown that outcomes for diabetes are better for those on Medicare than those who are near elderly (62-64 years). Similar results were obtained for cardiovascular disease.

It is not just the health of seniors that has improved but their economic well-being and peace of mind have been greatly enhanced. Before Medicare was passed, 29% of those 65 and up lived in poverty. After Medicare, the number of seniors in poverty fell to 10% and the number has held at 10% despite the dramatic increases in out-of-pocket medical care costs.

Clearly Medicare has been a most successful social program for the United States.

Like any good story, this has a moral as well. We have a health care crisis in the US with 42% of the population uninsured or absurdly underinsured. To solve this, we must improve and expand Medicare, to include all of us. About half the personal bankruptcies in the US are due to medical costs and 3/4 of those who go bankrupt due to medical costs HAVE health insurance. But the business of the health industry is to make profits, which they can do best by not paying claims. This is called denial management. Our health care costs are so high in part because our premiums and other medical expenses pay for exorbitant salaries and for the profits for the health care industry. The medical-industrial complex needs to be removed from taking care of the sick and a new, improved and expanded Medicare put in its place. It is time to bring the benefits that came to the elderly when Medicare was implemented to all of us in the US.

Happy birthday, dear Medicare — 43 years old and going strong!