President Lyndon B. Johnson signed Medicare and Medicaid into law 61 years ago today! These legacy Great Society programs could not be MORE IMPORTANT, but the political right has been targeting them for years. Now… Trump and congressional Republicans have chipped away at health coverage for seniors, people with disabilities, and lower income workers. We asked our legislative and policy director Dan Adcock to reflect on the history of both programs — and the threats they face today.
Q: Why was Medicare created in the first place?
A: Before Medicare was enacted, many seniors did not have health coverage. Insurance companies weren’t exactly eager to enroll older people. So the Congress and President Johsnon saw the need to create a federal health care program for the elderly. And that’s how we got Medicare in 1965.
Q: So was it a huge legislative accomplishment back then?
A: Yes, it was huge. Earlier, during President Truman’s time in office, he tried to create a national health care system. And that failed politically. But President Johnson picked up where Truman left off, because of the overwhelming need to provide health care to older people since the private sector wasn’t willing to do that.
Q: And that’s why he invited Truman to the White House for the signing of the Medicare law?
A: Yes. He invited Truman to the bill signing because LBJ was able to fulfill at least some of Truman’s vision.
Q: Why do we celebrate the enactment of Medicare today?
A: Because it provides every older American with essential health care coverage. And it’s been a great success story. Medicare is America’s most efficient health insurance system, covering some 72 million people while maintaining incredibly low overhead costs (except for the for-profit Medicare Advantage program, which we’ll get to later). All the polling about Medicare indicates that huge majorities of the public approve of it. Medicare is overwhelmingly popular regardless of party affiliation and age. And likewise, proposals to cut the program are equally unpopular.
Q: Why did they create Medicaid simultaneously as a sister program to Medicare?
A: Just as older people had trouble procuring health insurance before 1965, lower income Americans couldn’t afford to buy medical coverage at any age. So that was the reason that Medicaid was created. And then also the fact that, before Medicaid was enacted, the federal government did not help to finance long-term care, which has become enormously important as people tend to be living longer. And now, eligible beneficiaries can receive long-term care in skilled nursing facilities covered by Medicaid — and sometimes in the comfort of their own homes through Medicaid Home and Community-Based Services (HCBS).
Q: Some people get confused and think Medicare covers long-term care.
A: No, only Medicaid covers long-term care. But… if you’re admitted to a hospital for three days and need rehab or convalescence care, Medicare will cover it for up to 100 days. And if you still need that level of care after 100 days, you have to pay out of pocket or enroll in Medicaid.
Q: The Medicare Part A hospital trust fund is projected to become depleted in the early 2030s. What can we do to restore it to fiscal health?
A: Yes, we know from the most recent Medicare trustees report that the Part A trust fund reserves will run out in 2033, unless Congress takes action. At that point, there still will be money coming into Medicare in the form of payroll taxes – and 89% of benefits still could be paid. We don’t know for sure what that would look like, because it’s never happened before. But it would mean that payments to providers (doctors and hospitals) would be cut by 11%. So that’s why Congress needs to intervene and bring more revenue into the program.
Q: How big a threat to traditional Medicare is the privatized Medicare Advantage program right now?
A: Medicare Advantage was created based on the argument that private insurers could cover beneficiaries at a reduced cost to the federal government. But, unfortunately, it costs more to insure seniors through Medicare Advantage than it does through the traditional Medicare program. Not only are taxpayers picking up the tab, but traditional Medicare beneficiaries are basically subsidizing Medicare Advantage through higher monthly premiums.
Medicare Advantage is now capturing a growing share of the market, largely thanks to billions of dollars in (often deceptive or misleading) advertising by the insurance industry. If enough people join Medicare Advantage over traditional Medicare, that could result in a death spiral where it just becomes too expensive to run traditional Medicare anymore. And then Medicare Advantage – with all of its built-in disadvantages – would become your only option.
Q: What are our political concerns about Medicare with Trump in the White House and the Republicans still in the majority on Capitol Hill?
A: President Trump himself said the federal government can’t afford Medicare (and Medicaid) because of the need for ‘military protection.’ It’s absurd to tell seniors and lower income Americans that their federal health coverage must be cut because of Trump’s war in Iran. We won’t get into the politics of the war here. But we must honor our commitment to provide basic health care to the most vulnerable among us – like every other industrialized nation does.
Let’s not forget about Trump’s Big, Ugly Bill, which cut nearly $1 trillion from Medicaid. That not only hurts lower income Americans who need that coverage, but it affects seniors who are dually eligible for Medicare and Medicaid — not to mention the millions of elderly who receive long-term care through the Medicaid program. The full impact of those cuts hasn’t even been felt yet, because the most harmful provisions of the Big, Ugly Bill don’t take effect until 2027.
Q: To wrap things up here, what would you tell people who are concerned about the future of Medicare (and Medicaid)?
A: Let your members of Congress know that you don’t want to see Medicare and Medicaid further cut or undermined. And equally importantly, vote for candidates this fall who understand that, 61 years ago, this country made a commitment to seniors and lower-income people that they would no longer have to live without basic health coverage. We encourage voters to support candidates who will protect seniors and working people in the next Congress. Depending on the result of the next two elections, maybe we can turn this around and undo the damage that Trump and his party have inflicted on these crucial programs.
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Read our CEO’s op-ed in Common Dreams, entitled “Celebrate Medicare & Medicaid – and Protect them from Trump.”
Listen to our podcast episode, “Keep AI Bots Out of Medicare!”