The History of Medicare: When did Medicare start?

Health insurance for those who need it most: A brief history of Medicare.

Over 50 years ago, the U.S. Congress decided it was time to remake American healthcare. On July 30, 1965 at a public ceremony in Independence, Missouri, President Lyndon B. Johnson signed Medicare, a federal health insurance program, into law. Seated next to him was former President Harry S. Truman, who at 81 years old effectively became the first recipient of a Medicare card during that same ceremony.

At its creation, Medicare consisted of only two parts: Medicare Part A, which offers hospital insurance coverage and is financed by payroll deductions, and Medicare Part B, an optional medical insurance program for which employees pay a monthly premium.

Medicare’s earliest beneficiaries, including President Truman, paid a $40 annual deductible for Part A and $3 monthly premium for Medicare Part B. Throughout the history of Medicare, those prices have continued to change due to inflation and changes in federal income laws. As of 2021, those same programs feature a $1,484 deductible for Part A, and a $148.50 monthly premium for Part B.

The Origins of Medicare

Why did Medicare start?

Before the onset of Medicare, Americans over the age of 65 who did not have access to employer-sponsored health insurance coverage were left completely unsupported. In many cases, older Americans were forced to become a financial burden to their families when they required medical care. Efforts to resolve this extremely common issue were actually years in the making.

During the Great Depression, many American citizens (especially the elderly and disabled) were extremely affected by a lack of access to many resources needed to keep them alive and well, including healthcare. Over the years, many economic and healthcare reform ideas competed and developed into what we now know today as Medicare.

Who created Medicare?

The idea of healthcare reform first came about in 1935, when President Franklin D. Roosevelt first signed the Social Security Act into law. Unfortunately, opposition from Republicans and organized medicine forced Social Security to pass without a universal health care component at first.

Over ten years later in 1948, President Truman became the first president to actively advocate for national health insurance, but his proposal — targeted as “socialist” in nature by many conservative politicians — never quite made it out of capitol hill.

By the time John F. Kennedy rose to power, efforts to pursue more modest national health insurance plans were in effect, but they again failed to consistently get traction in Congress. As stated, it wasn’t until President Lyndon B. Johnson’s term in 1965 that Medicare (and Medicaid) was officially born.

When was Medicare expanded?

Over the course of Medicare history, many politicians, both conservative and liberal, made great efforts to expand the program even further. In 1972, President Richard Nixon extended Medicare eligibility to individuals under the age of 65 who had been diagnosed with certain qualifying diseases and disabilities.

In 1997 during President Bill Clinton’s time in office, Medicare Part C (today known as Medicare Advantage) plans began, giving Medicare beneficiaries the option to enroll in even more comprehensive health insurance coverage at an additional price.

During the tenure of President George W. Bush, efforts to offer a prescription drug benefit as a part of Medicare began, and in 2006, Medicare Part D: Prescription Drug Coverage officially went into effect.

Under President Barack Obama in 2010, Medicare received its most dramatic expansion in decades, as the Affordable Care Act mandated that Medicare beneficiaries were given access to preventative care services and health screenings free-of-charge. Out-of-pocket expenses related to Medicare Part D were also reduced dramatically as well.

What does Medicare look like today?

The history of Medicare has seen many changes to both the program itself and the amount of people who depend on it. Today, over 60 million Americans are covered under some form of Medicare. This equates to over 18 percent of the country’s population. As life expectancies continue to increase and massive generations of Americans, such as the Baby Boomers, begin to reach retirement age, this number is expected to double by 2030.

Efforts to expand Medicare coverage even further continue to be debated on Capitol Hill (especially in the shadow of a global pandemic), and it’s difficult to tell where Medicare coverage may go from here.

Right now though, one thing is for certain: if you are currently eligible for Medicare coverage, the licensed insurance experts at MedicareInsurance.com can help you gain an even better understanding of how Medicare works, and we can even help you research and compare new plans if you are looking for even more comprehensive coverage in your area. Give us a call at (800) 950-0608 today to get started!