50 years of Medicare

Abstract

In July, 1965, Medicare, America's landmark national health insurance programme, became law. Today, it covers 55 million people. Susan Jaffe, The Lancet's Washington correspondent, reports.Richard Troeh joined a very busy solo family medicine practice in 1966 but even with two doctors, their office in Independence, Missouri, seemed just as hectic. The year before, President Lyndon Baines Johnson came to town to sign the Medicare legislation into law at the Truman library. Former President Harry Truman—an advocate of national health insurance since the 1940s—and his wife attended the event and were among the first Americans to receive Medicare cards.“No longer will older Americans be denied the healing miracle of modern medicine”, Johnson said at the signing ceremony on July 30, 1965. “No longer will illness crush and destroy the savings that they have so carefully put away over a lifetime so that they might enjoy dignity in their later years.”50 years later, the Social Security Amendments of 1965 provide health care for 55 million people older than 65 years or disabled receiving Medicare and nearly 73 million low-income adults, children, pregnant women, and people with disabilities receiving Medicaid, an optional programme also created under the same law.And in the process, the government programmes have transformed health care in the USA. Medicare is the nation's largest single purchaser of health care, consuming 14% of last year's federal budget, or US$505 billion. And it also has a fiercely loyal following that opposes efforts to cut benefits. Speaking earlier this month at the White House Conference on Aging, President Barack Obama drew laughs when he said, “And now we've got [protest] signs saying, “Get your government hands off of my Medicare”.“Almost initially, Medicare achieved its primary goal of providing nearly universal coverage among the elderly population”, Tricia Neuman, director of the Kaiser Family Foundation's Medicare policy programme told The Lancet.“It was a great comfort to my parents”, Belle Likover, 95 years of age and a long-time advocate for older adults in Ohio, told The Lancet. “They knew that no matter what serious illness they might face in the future, they were never going to be bankrupt by it because of Medicare.”“It was remarkable”, said Troeh. “There were patients who could now afford to go to the doctor.” Many had not seen a doctor for some time, including some patients whose conditions had become quite serious.Donald Potts, another internal medicine physician in Independence, attended the signing ceremony “out of curiosity”. He treated several patients only after they had Medicare, who came in “with this terrifically high blood pressure”, he told The Lancet. “It was really quite gratifying to be able to get that under control because it causes a tremendous amount of damage before you have any symptoms.”In addition to expanding health care for older adults, Medicare also removed barriers to medical treatment for African-American and other minority populations, said Neuman. Health-care providers who receive federal money to treat Medicare recipients are also subject to the requirements of the Civil Rights Act of 1964, another landmark law championed by President Johnson.Challenges aheadWith the addition of new benefits during the past five decades (panel) and 10 000 Americans reaching their 65th birthday—and Medicare eligibility—every day, controlling Medicare's rising costs is becoming an urgent concern.PanelThe evolution of Medicare•Medicare retains some of its original provisions but much has changed after 50 years. Part A covers hospital stays and, after a 3 day hospital admission, nursing home care. The nursing home benefit is restricted to 100 days, including the first 20 days at no cost to the beneficiary. Part A is free to most people older than 65 years regardless of income or pre-existing health conditions and is funded by a payroll tax of 2·9% of earnings, with half paid by employees and half by employers. Coverage for hospice care was added to Part A in 1983. The first quality care requirements for nursing homes to participate in Medicare were established in 1987.•Part B covers most of the cost of doctors visits and other outpatient services. It is funded primarily by the federal government with 25% of the cost paid by beneficiaries in the form of monthly premiums. In addition to premiums, patients are also responsible for paying 20% of the cost of outpatient service received. In 1980, Congress approved the sale of private insurance policies known as Medigap plans, which beneficiaries purchase to help pay for those out-of-pocket expenses.•In 1972, Medicare coverage was expanded to include people younger than 65 years with long-term disabilities who also receive Social Security disability benefits. Today, about 9 million disabled people have Medicare.•In 1997, Congress created Part C, an option for beneficiaries to leave traditional Medicare and buy a private health insurance policy, subsidised by the federal government. These insurance plans, now called Medicare Advantage, must provide the same minimum benefits as Medicare although patients are restricted to a network of providers under contract with the insurer. About 30% of Medicare beneficiaries have enrolled in Medicare Advantage plans.•In 2003, Congress added Part D, prescription drug coverage which took effect in 2006. The benefit is administered by private health insurance companies that sell policies to beneficiaries and charge a monthly premium that represents about 25% of the cost, with the federal government paying the remainder.•When Congress passed the Affordable Care Act in 2010—which also extended health insurance to millions of people younger than 65 years—it also made changes to Medicare. Cuts in Medicare Advantage subsidies will be phased-in so that insurers will eventually be paid an amount equivalent to the cost of care in traditional Medicare. Free preventive care benefits were added to Medicare, including cancer, HIV, and chronic disease screenings and an annual wellness exam. The law also eliminates the gap in the drug benefit, so that beneficiaries will have uninterrupted coverage.Last week, Medicare's board of trustees projected that the programme's dwindling hospital fund, which is supported by a payroll tax, will be able to pay for only 86% of benefits by 2030. The trustees also reported that beneficiaries' monthly premiums for Medicare's outpatient services remain artificially low because federal law allows increases only when seniors receive a cost-of-living raise in their Social Security benefits.Under the 2010 Affordable Care Act, which also expanded health insurance for Americans younger than 65 years, Congress created financial incentives to curb Medicare spending by improving the quality of care and patient outcomes. For example, hospitals now receive lower payments if they have above-average rates of readmissions within 30 days and a high number of patients with hospital-acquired infections or other conditions.The American Hospital Association (AHA), which represents about 5000 acute and post-acute care hospitals, supports new payment and delivery models, said Joanna Hiatt Kim, the AHA's vice president for payment policy. “But it is critical that they are implemented in a fair way”, she said. For example, she said the readmissions reduction programme should include adjustments to account for patients' social and demographic factors that hospitals cannot often control. A Medicare spokesman told The Lancet that evaluations already include them.In addition to penalties, the law also rewards Medicare providers. It funds experimental payment arrangements such as “accountable care organisations” of multiple providers and facilities that can earn bonus payments for high-quality outcomes. Several other cost-saving measures Congress has discussed include raising the eligibility age for Medicare and requiring wealthier seniors to pay more for coverage.Congressional Republicans have also proposed offering Medicare beneficiaries a premium subsidy or voucher they could use to help buy private health insurance policies as an alternative to Medicare. “Why don't you allow the same choices for a 65-year-old that you do for a 45-year-old?” Representative Phil Roe, a Tennessee Republican who is also co-chair of the Republican Congressional Doctors Caucus, told The Lancet. He said the voucher approach would be similar to how younger people buy subsidised policies through the Affordable Care Act's health insurance exchanges. Critics have argued that vouchers would not keep pace with medical costs, forcing patients to pay more. If beneficiaries left Medicare, the proposal could lead to the privatisation of Medicare. “That would absolutely be the end of Medicare as we know it”, said Representative Jan Schakowsky, an Illinois Democrat and co-chair of the House Democratic Caucus Seniors Task Force.Although Republicans and Democrats disagree on how to save money for Medicare, Neuman said recent polling shows “broad support for having the government do more to lower drug costs”. But there is no consensus on how to achieve the reduction. A group of 118 physicians at the nation's cancer centres recently called for changes in federal law to permit Medicare to negotiate drug prices, legalise importation of cancer medications, and accelerate access to generic drugs (see Editorial).Some seniors advocates want to improve Medicare benefits and argue that better coverage prevents serious—and expensive—health problems later. Dental care is essential for good nutrition and should be covered by Medicare, said Linda Fried, a geriatrician and dean of the Columbia University Mailman School of Public Health in New York. Schakowsky has proposed legislation requiring Medicare to pay for hearing aids, and strengthening nursing home requirements. “Medicare has survived 50 years now as a reliable social insurance programme and I am in favour of expanding it”, she said.For more on the history of Medicare see Lancet 2015; 386: 332–33For more on Medicare at 50 see http://www.asaging.org/blog/there-bright-future-medicare In July, 1965, Medicare, America's landmark national health insurance programme, became law. Today, it covers 55 million people. Susan Jaffe, The Lancet's Washington correspondent, reports. Richard Troeh joined a very busy solo family medicine practice in 1966 but even with two doctors, their office in Independence, Missouri, seemed just as hectic. The year before, President Lyndon Baines Johnson came to town to sign the Medicare legislation into law at the Truman library. Former President Harry Truman—an advocate of national health insurance since the 1940s—and his wife attended the event and were among the first Americans to receive Medicare cards. “No longer will older Americans be denied the healing miracle of modern medicine”, Johnson said at the signing ceremony on July 30, 1965. “No longer will illness crush and destroy the savings that they have so carefully put away over a lifetime so that they might enjoy dignity in their later years.” 50 years later, the Social Security Amendments of 1965 provide health care for 55 million people older than 65 years or disabled receiving Medicare and nearly 73 million low-income adults, children, pregnant women, and people with disabilities receiving Medicaid, an optional programme also created under the same law. And in the process, the government programmes have transformed health care in the USA. Medicare is the nation's largest single purchaser of health care, consuming 14% of last year's federal budget, or US$505 billion. And it also has a fiercely loyal following that opposes efforts to cut benefits. Speaking earlier this month at the White House Conference on Aging, President Barack Obama drew laughs when he said, “And now we've got [protest] signs saying, “Get your government hands off of my Medicare”. “Almost initially, Medicare achieved its primary goal of providing nearly universal coverage among the elderly population”, Tricia Neuman, director of the Kaiser Family Foundation's Medicare policy programme told The Lancet. “It was a great comfort to my parents”, Belle Likover, 95 years of age and a long-time advocate for older adults in Ohio, told The Lancet. “They knew that no matter what serious illness they might face in the future, they were never going to be bankrupt by it because of Medicare.” “It was remarkable”, said Troeh. “There were patients who could now afford to go to the doctor.” Many had not seen a doctor for some time, including some patients whose conditions had become quite serious. Donald Potts, another internal medicine physician in Independence, attended the signing ceremony “out of curiosity”. He treated several patients only after they had Medicare, who came in “with this terrifically high blood pressure”, he told The Lancet. “It was really quite gratifying to be able to get that under control because it causes a tremendous amount of damage before you have any symptoms.” In addition to expanding health care for older adults, Medicare also removed barriers to medical treatment for African-American and other minority populations, said Neuman. Health-care providers who receive federal money to treat Medicare recipients are also subject to the requirements of the Civil Rights Act of 1964, another landmark law championed by President Johnson. Challenges aheadWith the addition of new benefits during the past five decades (panel) and 10 000 Americans reaching their 65th birthday—and Medicare eligibility—every day, controlling Medicare's rising costs is becoming an urgent concern.PanelThe evolution of Medicare•Medicare retains some of its original provisions but much has changed after 50 years. Part A covers hospital stays and, after a 3 day hospital admission, nursing home care. The nursing home benefit is restricted to 100 days, including the first 20 days at no cost to the beneficiary. Part A is free to most people older than 65 years regardless of income or pre-existing health conditions and is funded by a payroll tax of 2·9% of earnings, with half paid by employees and half by employers. Coverage for hospice care was added to Part A in 1983. The first quality care requirements for nursing homes to participate in Medicare were established in 1987.•Part B covers most of the cost of doctors visits and other outpatient services. It is funded primarily by the federal government with 25% of the cost paid by beneficiaries in the form of monthly premiums. In addition to premiums, patients are also responsible for paying 20% of the cost of outpatient service received. In 1980, Congress approved the sale of private insurance policies known as Medigap plans, which beneficiaries purchase to help pay for those out-of-pocket expenses.•In 1972, Medicare coverage was expanded to include people younger than 65 years with long-term disabilities who also receive Social Security disability benefits. Today, about 9 million disabled people have Medicare.•In 1997, Congress created Part C, an option for beneficiaries to leave traditional Medicare and buy a private health insurance policy, subsidised by the federal government. These insurance plans, now called Medicare Advantage, must provide the same minimum benefits as Medicare although patients are restricted to a network of providers under contract with the insurer. About 30% of Medicare beneficiaries have enrolled in Medicare Advantage plans.•In 2003, Congress added Part D, prescription drug coverage which took effect in 2006. The benefit is administered by private health insurance companies that sell policies to beneficiaries and charge a monthly premium that represents about 25% of the cost, with the federal government paying the remainder.•When Congress passed the Affordable Care Act in 2010—which also extended health insurance to millions of people younger than 65 years—it also made changes to Medicare. Cuts in Medicare Advantage subsidies will be phased-in so that insurers will eventually be paid an amount equivalent to the cost of care in traditional Medicare. Free preventive care benefits were added to Medicare, including cancer, HIV, and chronic disease screenings and an annual wellness exam. The law also eliminates the gap in the drug benefit, so that beneficiaries will have uninterrupted coverage.Last week, Medicare's board of trustees projected that the programme's dwindling hospital fund, which is supported by a payroll tax, will be able to pay for only 86% of benefits by 2030. The trustees also reported that beneficiaries' monthly premiums for Medicare's outpatient services remain artificially low because federal law allows increases only when seniors receive a cost-of-living raise in their Social Security benefits.Under the 2010 Affordable Care Act, which also expanded health insurance for Americans younger than 65 years, Congress created financial incentives to curb Medicare spending by improving the quality of care and patient outcomes. For example, hospitals now receive lower payments if they have above-average rates of readmissions within 30 days and a high number of patients with hospital-acquired infections or other conditions.The American Hospital Association (AHA), which represents about 5000 acute and post-acute care hospitals, supports new payment and delivery models, said Joanna Hiatt Kim, the AHA's vice president for payment policy. “But it is critical that they are implemented in a fair way”, she said. For example, she said the readmissions reduction programme should include adjustments to account for patients' social and demographic factors that hospitals cannot often control. A Medicare spokesman told The Lancet that evaluations already include them.In addition to penalties, the law also rewards Medicare providers. It funds experimental payment arrangements such as “accountable care organisations” of multiple providers and facilities that can earn bonus payments for high-quality outcomes. Several other cost-saving measures Congress has discussed include raising the eligibility age for Medicare and requiring wealthier seniors to pay more for coverage.Congressional Republicans have also proposed offering Medicare beneficiaries a premium subsidy or voucher they could use to help buy private health insurance policies as an alternative to Medicare. “Why don't you allow the same choices for a 65-year-old that you do for a 45-year-old?” Representative Phil Roe, a Tennessee Republican who is also co-chair of the Republican Congressional Doctors Caucus, told The Lancet. He said the voucher approach would be similar to how younger people buy subsidised policies through the Affordable Care Act's health insurance exchanges. Critics have argued that vouchers would not keep pace with medical costs, forcing patients to pay more. If beneficiaries left Medicare, the proposal could lead to the privatisation of Medicare. “That would absolutely be the end of Medicare as we know it”, said Representative Jan Schakowsky, an Illinois Democrat and co-chair of the House Democratic Caucus Seniors Task Force.Although Republicans and Democrats disagree on how to save money for Medicare, Neuman said recent polling shows “broad support for having the government do more to lower drug costs”. But there is no consensus on how to achieve the reduction. A group of 118 physicians at the nation's cancer centres recently called for changes in federal law to permit Medicare to negotiate drug prices, legalise importation of cancer medications, and accelerate access to generic drugs (see Editorial).Some seniors advocates want to improve Medicare benefits and argue that better coverage prevents serious—and expensive—health problems later. Dental care is essential for good nutrition and should be covered by Medicare, said Linda Fried, a geriatrician and dean of the Columbia University Mailman School of Public Health in New York. Schakowsky has proposed legislation requiring Medicare to pay for hearing aids, and strengthening nursing home requirements. “Medicare has survived 50 years now as a reliable social insurance programme and I am in favour of expanding it”, she said.For more on the history of Medicare see Lancet 2015; 386: 332–33For more on Medicare at 50 see http://www.asaging.org/blog/there-bright-future-medicare With the addition of new benefits during the past five decades (panel) and 10 000 Americans reaching their 65th birthday—and Medicare eligibility—every day, controlling Medicare's rising costs is becoming an urgent concern. •Medicare retains some of its original provisions but much has changed after 50 years. Part A covers hospital stays and, after a 3 day hospital admission, nursing home care. The nursing home benefit is restricted to 100 days, including the first 20 days at no cost to the beneficiary. Part A is free to most people older than 65 years regardless of income or pre-existing health conditions and is funded by a payroll tax of 2·9% of earnings, with half paid by employees and half by employers. Coverage for hospice care was added to Part A in 1983. The first quality care requirements for nursing homes to participate in Medicare were established in 1987.•Part B covers most of the cost of doctors visits and other outpatient services. It is funded primarily by the federal government with 25% of the cost paid by beneficiaries in the form of monthly premiums. In addition to premiums, patients are also responsible for paying 20% of the cost of outpatient service received. In 1980, Congress approved the sale of private insurance policies known as Medigap plans, which beneficiaries purchase to help pay for those out-of-pocket expenses.•In 1972, Medicare coverage was expanded to include people younger than 65 years with long-term disabilities who also receive Social Security disability benefits. Today, about 9 million disabled people have Medicare.•In 1997, Congress created Part C, an option for beneficiaries to leave traditional Medicare and buy a private health insurance policy, subsidised by the federal government. These insurance plans, now called Medicare Advantage, must provide the same minimum benefits as Medicare although patients are restricted to a network of providers under contract with the insurer. About 30% of Medicare beneficiaries have enrolled in Medicare Advantage plans.•In 2003, Congress added Part D, prescription drug coverage which took effect in 2006. The benefit is administered by private health insurance companies that sell policies to beneficiaries and charge a monthly premium that represents about 25% of the cost, with the federal government paying the remainder.•When Congress passed the Affordable Care Act in 2010—which also extended health insurance to millions of people younger than 65 years—it also made changes to Medicare. Cuts in Medicare Advantage subsidies will be phased-in so that insurers will eventually be paid an amount equivalent to the cost of care in traditional Medicare. Free preventive care benefits were added to Medicare, including cancer, HIV, and chronic disease screenings and an annual wellness exam. The law also eliminates the gap in the drug benefit, so that beneficiaries will have uninterrupted coverage. •Medicare retains some of its original provisions but much has changed after 50 years. Part A covers hospital stays and, after a 3 day hospital admission, nursing home care. The nursing home benefit is restricted to 100 days, including the first 20 days at no cost to the beneficiary. Part A is free to most people older than 65 years regardless of income or pre-existing health conditions and is funded by a payroll tax of 2·9% of earnings, with half paid by employees and half by employers. Coverage for hospice care was added to Part A in 1983. The first quality care requirements for nursing homes to participate in Medicare were established in 1987.•Part B covers most of the cost of doctors visits and other outpatient services. It is funded primarily by the federal government with 25% of the cost paid by beneficiaries in the form of monthly premiums. In addition to premiums, patients are also responsible for paying 20% of the cost of outpatient service received. In 1980, Congress approved the sale of private insurance policies known as Medigap plans, which beneficiaries purchase to help pay for those out-of-pocket expenses.•In 1972, Medicare coverage was expanded to include people younger than 65 years with long-term disabilities who also receive Social Security disability benefits. Today, about 9 million disabled people have Medicare.•In 1997, Congress created Part C, an option for beneficiaries to leave traditional Medicare and buy a private health insurance policy, subsidised by the federal government. These insurance plans, now called Medicare Advantage, must provide the same minimum benefits as Medicare although patients are restricted to a network of providers under contract with the insurer. About 30% of Medicare beneficiaries have enrolled in Medicare Advantage plans.•In 2003, Congress added Part D, prescription drug coverage which took effect in 2006. The benefit is administered by private health insurance companies that sell policies to beneficiaries and charge a monthly premium that represents about 25% of the cost, with the federal government paying the remainder.•When Congress passed the Affordable Care Act in 2010—which also extended health insurance to millions of people younger than 65 years—it also made changes to Medicare. Cuts in Medicare Advantage subsidies will be phased-in so that insurers will eventually be paid an amount equivalent to the cost of care in traditional Medicare. Free preventive care benefits were added to Medicare, including cancer, HIV, and chronic disease screenings and an annual wellness exam. The law also eliminates the gap in the drug benefit, so that beneficiaries will have uninterrupted coverage. Last week, Medicare's board of trustees projected that the programme's dwindling hospital fund, which is supported by a payroll tax, will be able to pay for only 86% of benefits by 2030. The trustees also reported that beneficiaries' monthly premiums for Medicare's outpatient services remain artificially low because federal law allows increases only when seniors receive a cost-of-living raise in their Social Security benefits. Under the 2010 Affordable Care Act, which also expanded health insurance for Americans younger than 65 years, Congress created financial incentives to curb Medicare spending by improving the quality of care and patient outcomes. For example, hospitals now receive lower payments if they have above-average rates of readmissions within 30 days and a high number of patients with hospital-acquired infections or other conditions. The American Hospital Association (AHA), which represents about 5000 acute and post-acute care hospitals, supports new payment and delivery models, said Joanna Hiatt Kim, the AHA's vice president for payment policy. “But it is critical that they are implemented in a fair way”, she said. For example, she said the readmissions reduction programme should include adjustments to account for patients' social and demographic factors that hospitals cannot often control. A Medicare spokesman told The Lancet that evaluations already include them. In addition to penalties, the law also rewards Medicare providers. It funds experimental payment arrangements such as “accountable care organisations” of multiple providers and facilities that can earn bonus payments for high-quality outcomes. Several other cost-saving measures Congress has discussed include raising the eligibility age for Medicare and requiring wealthier seniors to pay more for coverage. Congressional Republicans have also proposed offering Medicare beneficiaries a premium subsidy or voucher they could use to help buy private health insurance policies as an alternative to Medicare. “Why don't you allow the same choices for a 65-year-old that you do for a 45-year-old?” Representative Phil Roe, a Tennessee Republican who is also co-chair of the Republican Congressional Doctors Caucus, told The Lancet. He said the voucher approach would be similar to how younger people buy subsidised policies through the Affordable Care Act's health insurance exchanges. Critics have argued that vouchers would not keep pace with medical costs, forcing patients to pay more. If beneficiaries left Medicare, the proposal could lead to the privatisation of Medicare. “That would absolutely be the end of Medicare as we know it”, said Representative Jan Schakowsky, an Illinois Democrat and co-chair of the House Democratic Caucus Seniors Task Force. Although Republicans and Democrats disagree on how to save money for Medicare, Neuman said recent polling shows “broad support for having the government do more to lower drug costs”. But there is no consensus on how to achieve the reduction. A group of 118 physicians at the nation's cancer centres recently called for changes in federal law to permit Medicare to negotiate drug prices, legalise importation of cancer medications, and accelerate access to generic drugs (see Editorial). Some seniors advocates want to improve Medicare benefits and argue that better coverage prevents serious—and expensive—health problems later. Dental care is essential for good nutrition and should be covered by Medicare, said Linda Fried, a geriatrician and dean of the Columbia University Mailman School of Public Health in New York. Schakowsky has proposed legislation requiring Medicare to pay for hearing aids, and strengthening nursing home requirements. “Medicare has survived 50 years now as a reliable social insurance programme and I am in favour of expanding it”, she said. For more on the history of Medicare see Lancet 2015; 386: 332–33For more on Medicare at 50 see http://www.asaging.org/blog/there-bright-future-medicare For more on the history of Medicare see Lancet 2015; 386: 332–33For more on Medicare at 50 see http://www.asaging.org/blog/there-bright-future-medicare For more on the history of Medicare see Lancet 2015; 386: 332–33 For more on Medicare at 50 see http://www.asaging.org/blog/there-bright-future-medicare Time to introduce organ donation to the concept of precision?Last week, the UK Organ Donation and Transplantation Activity Report for 2014/15 showed that the number of people receiving organ transplants in the UK decreased for the first time in more than a decade, prompting NHS Blood and Transplant to issue a plea for a national conversation about organ donation. Full-Text PDF