Medicare, Medicaid and Social Security: Then and Now

HAPPY 50TH BIRTHDAY MEDICARE AND MEDICAID:  THEN AND NOW
HAPPY 80TH BIRTHDAY SOCIAL SECURITY:  THEN AND NOW

We take care of our own.  As Americans, we, as a whole, have prided ourselves on serving our senior and disabled citizens with a national health insurance program, and a national retirement program, despite the struggles and crises it continues to experience.

Prior to July 30th, 1965, only about half of Americans aged 65 or older had health insurance.  Now, virtually all seniors have coverage.  Their rate of insured is at nearly 100%, a much higher rate than those younger than 65.

“No longer will older Americans be denied the healing miracle of modern medicine.  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.  No longer will young families see their own incomes, and their own hopes, eaten away simply because they are carrying out their deep moral obligations to their parents, and to their uncles, and to their aunts.”    —-President Lyndon B. Johnson, upon signing into law the Medicare and Medicaid bills.

Much like Obamacare today, Medicare and Medicaid were not universally accepted upon their introduction into our system.  Many people doubted their necessity or their long-term viability, as well as the structure and operation of the systems.   Now, 50 years later, it is hard to imagine our society without these blankets that cover so many deserving and needy members of our country.

Medicaid was slower to pick up momentum as a universal program, but it has caught up to Medicare in the importance of services it provides.  Medicare now pays for just under half of U.S. births, and a little over half of nursing home care in America.

Together, Medicare and Medicaid cover about one-third of all Americans.  We have all heard the grim predictions:  Neither one can go on like this forever.  Tax increases, benefit cuts and reductions in payments to medical providers will be necessary in order to keep the programs alive.

When these programs were conceived, the demographics were different.  The long-term plans and projections for both programs were based upon current life expectancies, as well as social norms and trends.

Here’s a snapshot look at the past and present of these programs:

  •  1965:  At age 65, men could be expected to live 13.5 more years.  Women could expect to live 18 more.
  • 2015:  Men can now be expected to live 19.3 years past age 65, and women average 21.6 more years past age 65.
  • 1965:  Especially in the South, racially segregated hospitals and nursing homes were common.
  • 2015:   Segregated facilities are unheard of.  In order to receive Medicare and Medicaid benefits, hospitals and nursing homes must assure the federal government that they don’t discriminate, or face losing payments.  School desegregation proved to be much more difficult that desegregating medical facilities.
  • 1965:  Medicare did not cover prescription drugs.
  • 2015:  Medicare D took effect in 2006, created especially to cover prescription drugs under President George W. Bush.
  • 1965:  Income wasn’t used to determine specific eligibility for Medicare.
  • 2015:  With income levels above $85,000 annually for singles, and $170,000 for couples, Part B premiums increase in cost for outpatient services such as physical, occupational and speech therapy.  Prescriptions under Part D also increase in cost at these income levels.Analysts predict that these increases in premiums will continue, if not become greater as Medicare’s long-term funding crisis continues to grow.
  • 1965:  Medicaid eligibility was dependent upon receiving government welfare checks.  Thus, many underprivileged children did not qualify with their family’s welfare status.
  • 2015:   Regardless of income, about one-third of all children in the United States today receive Medicaid benefits, thanks in large part to the welfare reform laws of the 1990s.   Among lower-income families, three out of four children now receive benefits.President Obama’s health care laws expanded Medicaid coverage.   Lower-class working adults with no children at home were once left in a coverage gap.  Now, with the passage of Obamacare, this major group largely receives coverage.
  • The evolution of Medicaid has created a blanket program for all low-income people in the United States.
  • 1965:  Medicare and Medicaid did not use private insurance agencies behind the scenes to deliver benefits, but did utilize their services to process claims.
  • 2015:  It is now the norm for private insurance plans to provide benefits to the consumer, especially through Medicaid.  In Kansas, the most common providers are United Health Care, Sunflower, and Amerigroup.  Together, these are administered through KanCare, which is the official state agency that administers Medicare benefits.  A key element of Medicare is a restriction of the beneficiary’s choice of doctors and hospitals.

 

In addition, the prescription drug benefit—Part D—is provided privately.

With one in three Americans being covered by one or both programs, they are a key element of our health care system.  Long-term solvency and continued success of both programs depends upon lawmakers careful planning and decision-making.   Considerations of all possible changes and improvements are foremost among our domestic issues on the political table.  Keeping them a priority will help to ensure their long-term survival, and help them to continue to celebrate many more milestone birthdays.

 

SOCIAL SECURITY TURNS 80

 President Franklin D. Roosevelt signed Social Security into law on August 14th, 1935. It allows older and disabled United States citizens to retire with at least some measure of income.   Coupled with Medicare, it provides a higher standard of living for U.S. citizens who qualify.

Like Medicare and Medicaid, it has seen some big changes:

  • 1935:  Services and payments were provided face-to-face.
  • 2015:  Increasingly, the services are provided online, while the toll-free telephone system is still in service, as well as minimal face-to-face.  Payments are made electronically into a bank account, or can be loaded onto a debit card.  Most retirees no longer receive paper checks.  Online statements are also used versus paper.
  •  1935:  The standard retirement age was 65, but reduced benefits could be drawn as early as 62.
  • 2015:   The full retirement age is 66 or 67, depending upon birth year.  Early reduced benefits can be drawn at 62, and is a popular choice.
  •  1935:  Cost of living increases were not instituted for 10 years after its inception.  Thereafter, increases occurred mostly in election years.
  • 2015:  In 1972, Congress passed a law mandating cost of living adjustments based on annual increases in consumer prices, which continue today.
  • 1935:  Benefits were given only to retirees, and no family members.
  • 2015:   Amendments in 1939 allowed minor children and spouses of retired person to receive benefits, as well as surviving children and spouses of deceased workers.  In effect, this provision acts as life insurance.   Disability payments were added in 1956 for older workers, and extending to all ages of disabled people in 1960.
  • 1935:  The very first Social Security check was issued to Ida May Fuller of Ludlow, Vermont in 1940 for $22.54.
  • 2015:  The average monthly payout in June 2015 was $1,335.00

As our nation continues to grow and evolve, Medicare, Medicaid and Social Security continue to be re-examined by lawmakers and policy makers in order to keep it current, effective, functional and up-to-date.   Sweeping economic and social changes are major factors that determine current and future policy-making efforts.  As with any governing body, there is not always a clear consensus and agreement between the politicians and administrative professionals involved is not always guaranteed.

As with any government agency, the bureaucratic element can hinder progress and function.

Given these seemingly unavoidable factors, our Medicare, Medicaid and Social Security systems provide a framework and safety net for people who would likely have no other means of care and support.  The system is not perfect, but it is working for millions of Americans.