While many people of their generation might take for granted their access to Medicare, it hasn’t been around forever. In fact, it’s younger than those currently on it! Implemented in the latter part of the 20th century, Medicare has a rather brief history.
Still, it’s important to know how Medicare has evolved over time since there is some kind of changes to it each year that goes by.
History of Medicare
Before launching into Medicare’s history, let’s look at some facts about the program:
- Medicare is a federally-funded national insurance program founded in 1965.
- Parts A, B, C, and D all offer coverage for a wide variety of medical benefits.
- Medicare supplement plans, such as Medigap or Medicare Advantage, can additionally cover medical expenses.
- As of 2018, Medicare has provided health insurance coverage to nearly 55 million people.
1965: Medicare Gets Enacted
Medicare is the United States federal government’s national social insurance program. The program was officially enacted by Congress in July of 1965 under Title XVIII of the U.S. Social Security Act.
Medicare has four parts. Part A covers hospital insurance. Part B covers medical insurance; it is typically used in outpatient or office visit settings. Most Medicare beneficiaries do not pay monthly premiums for Part A coverage. Part B coverage, on the other hand, requires a monthly premium in addition to co-pays and co-insurance fees in some cases.
Medicare is primarily funded by a payroll tax as well as monthly premiums and charges to beneficiaries. It exists to provide health insurance for Americans 65 and older who have paid into the system via the payroll tax over the course of their working lives. Medicare also provides coverage to some beneficiaries who are under the age of 65 and disabled.
The program covers an average of half of the healthcare charges incurred by its beneficiaries, who are then responsible for paying the difference either through supplemental insurance or out-of-pocket.
Medicare was instrumental in the desegregation movements of the mid-1960s. The program made payments to healthcare providers including physicians, hospitals, and waiting rooms conditional upon desegregation of facilities.
Medicare Changes Over The Years
The program has undergone several changes and expansions during its 50-year history:
1972: Medicare Expands for the First Time
In this period of the history of Medicare, the federal government expanded program benefits to include speech, physical, and chiropractic therapy. During the 1980s, the program added optional payments to Health Maintenance Organizations (HMOs) as well as coverage for people under the age of 65 with permanent disabilities.
1980: Medicare Sees Passage of Omnibus Reconciliation Act
In 1980, Congress passed the Omnibus Reconciliation Act of 1980. This act expanded home health services and brought Medicare Supplemental Insurance (also called Medigap) under federal oversight.
1984: More Benefits Added To Medicare
In 1984, the government added hospice benefits to Medicare. This came about because beneficiaries were living longer thanks to advances in medical science and technology.
1990s: Private Companies Make Bigger Push Into Medicare Market
During the 1990s, eligible beneficiaries received more coverage options on the private market thanks to Part C. Part C plans are now sold and serviced by third-party companies under federal oversight and offer additional benefits beyond Original Medicare Part A and Part B. These include dental and prescription drug coverage.
1997: Here Comes Medicare Advantage To Give Consumers More Choice
Part C, also called Medicare Advantage, was formalized in 1997. It offers everything offered by Parts A and B, along with the option to add additional benefits if the enrollee wishes to purchase them. The difference is Medicare pays private companies to offer coverage to beneficiaries.
2003, 2006: Prescription Drugs Enter The Scene For Medicare Coverage
In 2003, the Medicare Prescription Drug Improvement and Modernization Act of 2003 was signed into law, adding an optional prescription drug benefit known as Part D to its list of services. Part D took effect three years later in 2006.
The program currently faces many financial challenges because of rising healthcare costs and a decreasing number of workers per enrollee.
2019: Medicare Advantage Open Enrollment Period Appears
This was a big deal for those on Part C plans. Prior to this OEP, Medicare Advantage recipients were effectively forced plan-members to stay enrolled regardless if they later decided it wasn’t a good fit for them. Now, just like Original Medicare, there is an open period to make changes or leave one plan to begin another that makes more sense for them.
2021: Medicare Advantage Plans Now Accept ESRD Patients
Those suffering from End-Stage Renal Disease are now able to enroll in Medicare Advantage plans. These Part C plans must offer the same coverage as Original Medicare; however, there can still be additional costs and restrictions.
Into the Future: Number of Medicare Recipients Expected to Swell
Medicare enrollment is predicted to rise from its current total to nearly 80 million people in 2030, while the number of employees is expected to decline.
Receive Assistance With A Medicare Supplement Plan Now
After looking at a brief history of Medicare, it’s time to look at the present and future for its recipients. There’s no better time than now to determine if you think a Medigap plan would give your health coverage a boost by taking care of aspects that Medicare itself doesn’t.
Speaking with one of our licensed insurance agents — with their expert-level knowledge and friendly demeanor — can provide the assistance you desire. The agents can pair you with the best plan for you.
So when you are ready to get more information about a Medigap or Medicare Advantage plan, give us a call. Or you can fill out our online rate form to get connected with the best plans in your area.