Health Care

No exploration of the nation’s health care system is complete without a discussion of Medicare and the principles of government-sponsored health care it represents. The concept of national health insurance for Americans was formulated almost a century ago. It was mentioned in a speech given by Louis D. Brandeis (who later became a Supreme Court justice) in 1911. It was part of former president Theodore Roosevelt’s Progressive Party platform in 1912, and it was the primary agenda of the First American Conference on Social Insurance held in Chicago in 1913. Further, formal debate began in the Senate on a “standard” (universal) health insurance bill in 1915. The legislative wrangling lasted nearly fifty years, but ultimately Medicare was born.

On July 30, 1965, then-president Lyndon Johnson signed Title XVIII and Title XIX of the Social Security Act into law, making Medicare and Medicaid social and fiscal realities. Medicare provided health insurance for every American sixty-five or older. Medicaid authorized matching federal funds so that states could give additional health coverage to many elderly, low-income, and disabled people. It had taken almost half a century and the tenacious political efforts of four presidents and countless members of Congress to bring America to the point where it could offer health care insurance to its elderly population. Former president Harry Truman, a tireless advocate of government-sponsored health insurance during his administration, was present at the signing of the Medicare and Medicaid bills. Disappointed that his term in office ended before he could enact the health care legislation he knew the country needed, Truman had once written, “I have had some bitter disappointments as president, but the one that has troubled me most, in a personal way, has been the failure to defeat the organized opposition to a national compulsory health insurance program. But this opposition has only delayed and cannot stop the adoption of an indispensable federal health insurance plan.”

Two issues had been key in the debate over Medicare: (1) did the aged, or a substantial number of them, need help with their medical costs? and (2) if they did, what was the best way to help them? Ultimately, Medicare critics and supporters agreed that help was needed, although they differed in their estimation of the seriousness of the problem. The primary issue, then, became the best way to provide elderly Americans with the help they needed to pay their medical bills. Three basic approaches, either separately or in combination, were considered during the original debate: (1) government subsidies for private insurance carriers, (2) direct government payments for medical services to low-income elderly through state welfare agencies, and (3) health insurance financed and administered completely through the Social Security program already in place. (The Social Security Act, minus health insurance, was signed into law on August 14, 1935.) Ultimately, legislators chose the third option, and Medicare became part of American life.

The importance of health care for the elderly has only increased as the U.S. population ages. In 1950 there were about 12 million Americans (about 8.1 percent of the population) over 65; by 1963 that number had swelled to 17.5 million (9.4 percent of the population). When Medicare became law in 1965, 19 million elderly Americans enrolled. By 2000, nearly 40 million people, almost 14 percent of the population, depended upon Medicare for health insurance coverage. As baby boomers age, the number of Medicare beneficiaries is expected to increase by at least 2 percent a year until 2015.

The steadily increasing elderly population and growing health care costs have made Medicare a more important and more complex piece of the American health care puzzle. Moreover, the time that the typical American receives Medicare benefits has increased: Nearly three years have been added to the life expectancy of the average American since Medicare began. Credit for the increase goes, in part, to expanded access to health care provided by Medicare and technological advances financed by Medicare payments. Because of Medicare’s growing fiscal impact on America’s economy, pressure for Medicare reform began to build in the 1990s. Some reform measures currently being debated include the option not to participate in Medicare coverage at all, barriers to fraud, formulas for reducing waste and abuse, and the addition of prescription drug benefits.

Some politicians and health care experts argue that the passage of Medicare in 1965 was as far as the United States will ever—and should ever—go in the direction of governmentsponsored health insurance. They argue that an individual’s medical care is too private to be overseen by the federal government. Others contend that while it has some shortcomings, the overall success of Medicare is proof that further expansion of the program into universal health care coverage is the most viable solution for the problem of uninsured Americans. More than 40 million people without health care coverage, most of them working at low-paying jobs where health care insurance is either not offered by their employers or is too expensive to purchase, have limited or no access to necessary health care.

There is no doubt that as the nation’s population ages, Medicare will play an increasingly important role in the health care system. Many see the expansion of Medicare as the future of U.S. health care, ultimately leading to universal coverage and an end to what has emerged as a major health care issue of the twenty-first century—the problem of uninsured Americans. Other experts argue that Medicare must remain strong and solvent as a safety net for seniors only—it must never evolve into a system of national health care in which the government rations medical services. Medicare, universal coverage, and uninsured Americans are just a few of the issues the authors in Health Care: Opposing Viewpoints debate in the following chapters: Is America’s Health Care System in Need of Reform? How Has Managed Care Affected the Health Care System? How Can the Problem of Uninsured Americans Be Solved? How Should the United States Reform Its Health Care System? The debate over Medicare that began almost a century ago is far from over. The issues have changed, but the purpose—to provide Americans with quality health care coverage—has not.