Medicare History

2014 Medicare and Medigap Updates

Medicare history goes back to November 19, 1945. On that day President Harry S. Truman sent a message to Congress asking for legislation to establish an all-inclusive, prepaid medical insurance plan for the people of the United States.

The president’s proposed plan, to be known as National Health Insurance, included doctors and hospitals; nurses; laboratories; as well as dental services. In addition, federal funds would also finance insurance benefits for the poor.

Debate over the proposal continued for two decades with its opponents fearing that passage of the legislation would eventually lead the nation to socialized medicine.

President Truman backed off from his plan of universal healthcare by the end of his administration. However, administrators in the Social Security system, as well as other legislators, began to focus on the idea of a program seeking to provide insurance to Social Security beneficiaries.

Years later a national survey revealed that only 56% of people 65 years of age or older had medical insurance. At this point, President John F. Kennedy encouraged lawmakers to pass health care legislation to provide medical coverage for elderly Americans.

President Kennedy didn’t live to see passage of the proposal he so passionately sought. It was in 1965 that President Lyndon B. Johnson signed H.R. 6675—The Social Security Act of 1965—to provide health insurance for the elderly and poor.

On July 30, 1965, President Johnson signed into law the Medicare and Medicaid Bill (Title XVIII and Title XIX). This milestone in Medicare history took place in Independence, Missouri at the Truman Library. Special guest, seated beside President Johnson, at this historical event was former President Harry S. Truman whose vision 20 years earlier became reality that day.

Former President Truman became the first person to enroll in the new Medicare program and receive his Medicare card. On that day in 1965, at the signing of the new legislation, the monthly premium for Medicare Part B was a mere $3.00.

In its first year, the program enrolled 19 million Americans, extending coverage to most Americans who were age 65 or older.

In 1972, Social Security amendments extended Medicare coverage to include disabled persons under the age of 65, as well as to those with end stage renal disease. In addition, services expanded to include some chiropractic procedures, speech therapy, and physical therapy.

Medicare history in the 1980s included:

1982 – Hospice benefits were temporarily added.

1983 – Most federal civilian employees became covered.

1984 – Remaining federal employees received coverage, including the president, members of Congress, and federal judges.

1986 – Permanent hospice benefits took effect.

1988 – Coverage benefits were enacted for catastrophic illness and prescription drugs; routine mammography was added.

1989 – Catastrophic coverage and prescription drug coverage was repealed; pap smear coverage was added.

In the 1990s the following events took place:

1992 – Medicare service provider payments became based on a fee schedule.

1997 – Medicare+Choice was enacted under the Balanced Budget Act.

1999 – Congress refined Medicare+Choice and relaxed some funding restrictions.

To date, the most important legislative change in Medicare history – the Medicare Modernization Act (MMA) – was signed into law by President George W. Bush on December 8, 2003. This historic legislation added an outpatient prescription drug benefit to Medicare, as well as including many other significant changes.

If you are eligible for medicare you may want to read our article on medicare fraud to stay informed on this important subject.