Medical Infrastructure - Medicare

Enrollment in Medicare, 1966-2075

In the 1950s, the elderly were facing a health care crisis. The high cost of health care was "the greatest single cause of economic dependency in old age."²¹ From 1900 to 1950, the number of elderly Americans quadrupled, from 3 million to 12 million and only 12.5% had health care coverage. Many private insurers considered the elderly a "bad risk" and would not insure them. Unions had a difficult time finding insurers to cover their retirees.

From 1950 to 1963, the number of elderly rose to 17.5 million. The cost of hospital care was rising at about 6.7% a year, much more than the cost of living. The average income of older Americans was around $1,000 a year. Insurance companies raised premiums and reduced benefits, making private insurance unaffordable or inadequate for the elderly on fixed incomes.

In 1965, Medicare, a government-run insurance program "designed to provide all older adults with comprehensive health care coverage at an affordable cost," was established.¹In 1972, people with disabilities and people with end-stage renal disease were allowed to enroll in Medicare. Until this time, these two groups were also facing the problem of finding reliable health care coverage.

In 2000, 39.6 million people were Medicare beneficiaries. The table below shows some of the characteristics of Medicare beneficiaries. Most are white, non-Hispanic women with incomes below $25,000. Of those that live alone, 72% are women, 15% are over the age of 85, and 56% have an income of less than $15,000.

Demographics of Medicare Beneficiaries, 2000

People are living longer. Soon, the Baby-Boom generation will be eligible for Medicare. Prescription drug costs are rising and increasingly becoming unaffordable to the elderly on fixed incomes. Congress is debating whether to add a prescription drug benefit to Medicare. As a result, the solvency of the Medicare system has been of concern in recent years. The next panel will discuss this issue in more depth.

Sources: Centers for Medicare and Medicaid Services. "Medicare Enrollment: National Trends 1966-1999" and 2002 Annual Report of the Boards of Trustees of the Federal Hospital Insurance Trust and Federal Supplementary Medical Insurance Trust Funds. Retrieved September 12, 2002 from http://cms.hhs.gov. Office of Research, Development, and Information. Centers for Medicare & Medicaid Services. "Program Information on Medicare, Medicaid, SCHIP, and other programs of the Centers for Medicare & Medicaid Services," June 2002. Retrieved September 12, 2002 from http://cms.hhs.gov/charts/default.asp. Medicare Rights Center. "The History of Medicare and The Current Debate." Retrieved September 13, 2002 from http://www.medicarerights.org/maincontenthistory.html.