Medicare, part of the U.S. Social Security Administration (SSA), helps provide people over the age of 65 years old with affordable health insurance and medical care. According to the SSA, nearly one-tenth of the American population is enrolled in a Medicare program. Medicare has both the direct benefit of providing care to those who enrolled in the program and the indirect benefit of sparing younger family members the expensive burden of paying for their elderly family members' health expenses.
First Medicare Proposal
The first Medicare program was proposed by President Harry S. Truman in 1945. On Nov. 19, 1945, President Truman asked Congress for legislation that would establish a national health insurance plan and provide Americans with health coverage through the SSA. He also proposed that the medical expenses of the needy be funded with federal money. The proposition become the focus of much debate, and by the end of his term as president, Truman had eased up on his pressure for health care reform.
Medicare Passes
In the 20 years leading to the adoption of Medicare, the idea of a universal health care program was met with much opposition. As people began to realize that national health reform was not going to get voted in, the SSA switched its focus to affordable health care for Social Security beneficiaries. In 1965, President Lyndon B. Johnson signed into law Medicare for Social Security recipients and Medicaid for the poor. Former President Truman then signed up to be the first recipient of Medicare. At the time it was signed into law, Medicare Part B cost just $3 a month.
1970s
In 1972, Medicare coverage was extended to include those receiving Social Security disability benefits for 24 months and anyone in the end stages of fatal renal disease. Medicare plans were also expanded from only covering doctor, hospital, nursing, laboratory and dental visits to include some chiropractic work and speech and physical therapies. Payments to HMOs were also authorized, and Supplemental Security Income for the poor was established. Recipients of Supplemental Security Income were automatically eligible for Medicaid.
1980s
In 1982, hospice benefits for Medicare recipients were added on a temporary basis. In 1983, Medicare costs were revised from a "reasonable cost" plan to a prospective payment system based on a diagnosis-related basis. In that same year, most civilian federal employees were also covered by Medicare, with all federal employees covered by 1984. The late 1980s brought the permanence of hospice care, routine mammograms and pap smears. Coverage for catastrophic illness and prescription drugs was then included but revoked.
1990s
In the 1990s, physician services payments were put on a fee schedule. In 1997, Medicare Plus Choice (also known as Medicare Part C) was enacted under the Balanced Budget Act to give beneficiaries the option of enrolling in a variety of private plans in conjunction with their Medicare. Because some of the provisions in the Medicare Plus Choice plan were financially restrictive, Congress was forced to refine the plan in 1999 and relax some of the funding restrictions, and in 2000, payment systems for outpatient and home care took effect.
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