And so they picked older Americans. And the substantive problem was that older Americans, by the 1960s, were still uninsured at very high rates. And they had great medical needs, and they really couldn’t afford medical care. And so Medicare was a way of solving that problem, of saying, “We’re going to provide a federal entitlement program for older Americans to make sure they have access to care.” And it was a big deal. And it was a big deal because it was the first time that the federal government had promised to provide health insurance for a whole population of Americans. And it was a really novel idea in the United States.
Rovner: And so what were the politics like back then?
Oberlander: The politics were divisive, and they were bitter. And they were in some ways similar to what we see today. The American Medical Association was very much opposed to Medicare. They called it socialized medicine, and they said it was going to be the end of American medicine. They ran a very aggressive campaign against Medicare. The American Hospital Association was opposed to Medicare. They said it was going to be the end of the voluntary hospital system in the United States. The Republicans were divided, and the Democrats were divided. And it was a big, bitter fight. And Medicare barely passed. It passed the House, I think, with only about 11 votes to spare. And it passed the Senate by a larger margin, but it still wasn’t a big, bipartisan vote. And it was a narrow, divisive vote that took a lot of political capital to get across the finish line.
Rovner: And so now here we are, 60 years later. Has the politics of Medicare changed?
Oberlander: Yes and no. One of the things that’s striking about Medicare is that, as you mentioned at the beginning, it’s a program that is very popular and has been very hard to change. So Medicare has become a symbol of the welfare state in the United States, a symbol of the federal government’s commitment to provide social insurance. And that’s a very powerful symbol, and it’s really hard for politicians to say, “I’m going to cut that program,” because people love it. And that’s why they call it the third rail of American politics. You touch it, you die. And that’s been true for a long time. And yet, even though it’s been hard to change, there’s been all kinds of efforts to change it.
And there’s been efforts to change it in the direction of expanding benefits, in the direction of adding prescription drugs, in the direction of adding long-term care benefits. But there’s also been efforts to change it in the direction of cutting benefits and privatizing it and turning it into a premium support program and a voucher program. And so the politics of Medicare have been dynamic, and they’ve been contentious. And they’re going to remain contentious. And I think what we’re seeing now is a new phase in the politics of Medicare, where there’s a lot of interest in expanding benefits through Medicare.
And I think one of the things that’s really interesting about Medicare is that it’s been a pathbreaker. And it’s been a model for other health insurance programs. So it’s been a model for the private sector in terms of structuring benefits and paying for care. It’s been a model for Medicaid, the program that provides health insurance to low-income Americans. It’s been a model for the Affordable Care Act. And I think the question now is: Can Medicare continue to be a model for how we structure and pay for health care in the United States?
Rovner: Jonathan Oberlander, thank you so much for joining us on “What the Health?”
Oberlander: It’s always a pleasure to talk to you, Julie. Thank you so much.
Rovner: And now we turn to Sara Rosenbaum, a professor emerita at George Washington University and one of the nation’s leading experts on Medicaid. Sara, welcome to “What the Health.”
Sara Rosenbaum: Thank you, Julie. It’s a pleasure to be here.
Rovner: So Medicaid started as a very different program from Medicare. Can you talk about where it came from and what it was meant to do?
Rosenbaum: Sure. Medicaid is a program that was created in 1965 along with Medicare. Medicare was designed to cover the health needs of older Americans, people who had spent their lives working and paying into the Social Security system. Medicaid, on the other hand, was designed to cover the health needs of low-income Americans, people who were poor, people with disabilities, pregnant women, and children. And one of the reasons why Medicaid was created was because at the time, in the 1960s, the United States had a very high rate of uninsured people. And many of those uninsured people were poor. And so Medicaid was created as a way to provide health coverage to those who couldn’t afford it on their own.
Rovner: And so how has Medicaid changed over the years?
Rosenbaum: Medicaid has changed a lot over the years. One of the biggest changes was in 2010 when the Affordable Care Act was passed. The Affordable Care Act expanded Medicaid to cover more people and to offer more benefits. Before the Affordable Care Act, Medicaid was really a patchwork program. Each state had its own rules and regulations, and that made it very confusing for people to understand who was eligible and what benefits they could receive. The Affordable Care Act standardized Medicaid across the country and made it easier for people to enroll and get the care they needed.
Another big change to Medicaid happened in the 1990s when Congress passed the Children’s Health Insurance Program, known as CHIP. CHIP was created to cover children who were not eligible for Medicaid but whose families couldn’t afford private insurance. CHIP has been very successful in reducing the number of uninsured children in the United States.
Rovner: And what are some of the challenges facing Medicaid today?
Rosenbaum: Medicaid is facing a lot of challenges right now. One of the biggest challenges is funding. Medicaid is funded jointly by the federal government and the states, and the costs of the program have been rising. The COVID-19 pandemic has also put a strain on Medicaid as more people have lost their jobs and their health insurance. And there are also ongoing efforts to roll back the Medicaid expansion that was part of the Affordable Care Act.
Another challenge facing Medicaid is the increasing cost of prescription drugs. Many Medicaid beneficiaries rely on prescription drugs to manage chronic conditions, and the rising cost of these drugs is putting a strain on the program. Medicaid is also facing workforce challenges as more people age and need long-term care services. There is a shortage of caregivers and home health aides, and this is putting a strain on the program.
Rovner: Sara Rosenbaum, thank you so much for joining us on “What the Health.”
Rosenbaum: Thank you for having me, Julie. It’s been a pleasure.
And that’s it for this special episode of “What the Health?” Thank you for joining us. Be sure to subscribe to the podcast on Apple Podcasts, Google Play, or wherever you get your podcasts. And for more health policy news, visit KFF.org. Until next time, I’m Julie Rovner. Thanks for listening.
They started experimenting with different ways of paying hospitals, moving away from paying for every service provided to paying global payments or capitation, paying a fixed amount per person, per month, to cover all their care. They also experimented with paying physicians in different ways. And so Medicare really pushed the envelope on payment reform. And that has spread throughout the U.S. health system.
Medicare is also a big player in quality measurement. They started measuring the quality of care that hospitals provided and put that out there for the public to see. And that helped jumpstart the quality movement in the United States. So Medicare has been a leader in many ways in U.S. health policy, but it’s no longer the only player. The Affordable Care Act, for example, is trying to push the envelope on alternative payment models, on quality measurement, on a variety of other fronts as well. So Medicare is still very important, but it’s no longer the only game in town.
Rovner: And just to wrap up, what do you see as some of the biggest challenges facing Medicare in the coming years?
Oberlander: So in the short term, Medicare has a lot of financial challenges. So the Medicare trust fund that pays for hospital insurance is projected to run out of funds in 2026, and then payroll taxes and other revenue sources will only be able to pay 90% of the hospital bills. So Congress is going to have to come up with a way to deal with that, whether it’s raising taxes, cutting benefits, or more likely some combination of the two.
Medicare also has to deal with a changing health care system. More care is moving out of the hospital and into the outpatient setting. It’s moving away from fee-for-service, paying for every service provided, to paying for value, paying for quality, paying for outcomes. So Medicare is going to have to adapt to that new reality.
And Medicare has to deal with a changing population. The baby boomers are entering Medicare, and that’s going to put a lot of financial pressure on the program. And Medicare has to deal with the fact that the U.S. health care system is not getting any cheaper. So Medicare is going to have to find ways to control costs while also maintaining access to care and quality of care. So Medicare has a lot of challenges ahead, but it’s shown a lot of resilience over its 50-plus years, and I suspect it will continue to do so in the future.
Overall, Medicare has been a critical program in the U.S. healthcare system, providing coverage for millions of Americans and setting the standard for payment reform and quality measurement. While challenges lie ahead, Medicare has proven to be adaptable and resilient in the face of changing healthcare landscapes. As the largest single payer in the nation’s healthcare system, Medicare will continue to play a vital role in shaping the future of healthcare in the United States. Medicare has been a pivotal player in the evolution of healthcare payment systems in the United States. In the early 1980s, Medicare implemented prospective payment for hospitals, setting the stage for significant changes in how healthcare services are reimbursed. This was followed by the adoption of a fee schedule for physicians towards the end of the decade. These changes marked a shift towards more standardized and transparent payment mechanisms within the healthcare system.
Medicare has continued to be at the forefront of healthcare innovation, serving as a testing ground for new payment models and delivery systems. The program has been instrumental in the development of accountable care organizations and other value-based purchasing initiatives. These efforts aim to improve the quality and efficiency of healthcare services while containing costs.
One of the key strengths of Medicare is its relatively low administrative costs compared to private insurers. The program’s simplicity and stability, with beneficiaries typically enrolled for life once they qualify, contribute to its cost-effectiveness. While Medicare has delegated some of its administrative functions to private insurers, it still maintains a level of oversight that ensures efficient and effective operation.
Medicare’s structure, with its multiple parts (A, B, C, and D), can be complex and confusing for beneficiaries. Part A covers inpatient hospital services, Part B covers outpatient and physician services, Part C offers private plan options through Medicare Advantage, and Part D provides prescription drug coverage. The addition of these parts over time reflects the evolving nature of healthcare and the need to adapt to changing circumstances.
Despite concerns about its financial sustainability, Medicare has proven to be resilient over the years. While projections suggest that the Medicare trust fund may face challenges in the future, Congress has historically taken steps to address funding gaps and ensure the program’s continuity. The political implications of allowing Medicare to go insolvent make it unlikely that such a scenario would ever come to pass.
In conclusion, Medicare has been a driving force in shaping the healthcare landscape in the United States. Its history of innovation and adaptability demonstrate its importance as a cornerstone of the American healthcare system. While challenges remain, there is reason to be optimistic about the future of Medicare and its ability to provide quality healthcare services to millions of Americans.
Oberlander: Yes, long-term care is a massive gap in the Medicare program. And it’s a gap that has huge implications for individuals and families, as well as for the overall healthcare system. Long-term care includes a range of services that help people with chronic illnesses or disabilities perform everyday tasks, such as bathing, dressing, and eating. It can be provided in a variety of settings, including nursing homes, assisted living facilities, and in the home.
The need for long-term care is only going to increase as the population ages. The Baby Boom generation is entering retirement age, and as they age, the demand for long-term care services is expected to grow significantly. This presents a major challenge for Medicare, as the program does not cover long-term care services except in very limited circumstances.
Currently, many individuals who require long-term care have to rely on Medicaid, the federal-state program for low-income individuals, to cover the costs. This places a significant financial burden on both individuals and state governments. It also raises questions about the quality and availability of long-term care services for those who need them.
Addressing the gap in long-term care coverage is a complex and challenging issue. It requires a combination of policy changes, funding mechanisms, and collaboration between federal and state governments. There have been proposals to expand Medicare to cover long-term care services, but these have not gained traction due to concerns about cost and sustainability.
As we look to the future of Medicare, addressing the long-term care gap will be a critical issue to consider. It’s not just a matter of financial sustainability, but also a matter of ensuring that individuals have access to the care they need to age with dignity and independence. The politics of long-term care are complicated, but it’s a challenge that we must face head-on if we want to ensure the health and well-being of our aging population.
Rovner: The issue of long-term care is indeed a pressing one that requires urgent attention. As we continue to navigate the complexities of Medicare and its evolving role in our healthcare system, it’s essential that we address the gaps in coverage and ensure that all individuals have access to the care they need. The future of Medicare may be uncertain, but one thing is clear: we must prioritize the health and well-being of our aging population and work towards a more comprehensive and sustainable healthcare system for all.
Medicare’s lack of a long-term care benefit has been a persistent issue for decades, dating back to when I first wrote about it in 1986. Now, in my 60s, the problem still remains unsolved. Why has this issue been so difficult to address? It seems that the high costs associated with long-term care have made it a challenging topic to tackle on a national level. The staggering costs of nursing home care have continued to rise, making it a significant financial burden for many families.
One of the reasons why the long-term care dilemma is often swept under the rug is due to the budgetary implications involved. The costs associated with providing long-term care are so high that members of Congress and presidential administrations are hesitant to address the issue. As a result, we have created a disjointed system where individuals often have to spend down their assets to qualify for Medicaid, which has become a major payer for institutional long-term care.
While we have seen some expansions in home health and long-term care services through Medicare and Medicaid, private insurance options for long-term care have remained limited and expensive. As the baby boomer generation continues to age, the need for long-term care services will only continue to grow.
Despite the lack of coverage for long-term care under Medicare, many Americans are still unaware of this gap in coverage. The assumption that Medicare covers all aspects of care for older individuals persists, leading to confusion and financial strain for families in need of long-term care services.
Looking ahead, as we face a growing federal budget deficit, there may be pressure to make cuts to programs like Medicare in order to address fiscal challenges. This could have significant implications for the future of Medicare and the healthcare workforce it supports.
While the future of Medicare may face challenges, it remains a vital program for providing health and retirement security for older Americans and individuals with disabilities. The program has been a cornerstone of healthcare in the United States for decades, and it is difficult to imagine a world without Medicare.
As we consider the future of Medicare, it is important to recognize the successes of the program and the essential access to care it provides. While changes may be necessary to ensure the program’s sustainability, Medicare will likely remain a critical component of our healthcare system for years to come.
In conclusion, the long-term care dilemma remains a complex and challenging issue that requires attention and action. As we navigate the future of Medicare and healthcare in the United States, addressing the gaps in coverage for long-term care will be crucial to ensuring the well-being of older Americans and individuals in need of ongoing care.
How did Medicaid come to be?
Medicaid, the federal and state program that provides health coverage for low-income individuals and families, has a long and complex history that dates back over 60 years. Originally established as an extension of the Kerr-Mills Act, Medicaid was not just an afterthought, as some believe. In fact, key figures like Wilbur Cohen, Wilbur Mills, and Lyndon Johnson had a clear vision for what Medicaid would become.
The Kerr-Mills Act, enacted five years prior to Medicaid, was a limited federal grant program that focused on providing medical assistance to the elderly. This program, while important, highlighted the need for a more comprehensive health insurance program for a broader population. This need ultimately led to the creation of Medicaid.
Medicaid was designed as a state grant program, where states would receive federal funding to provide medical assistance to certain categories of low-income individuals. Initially, the program targeted cash welfare recipients and the medically needy, individuals who couldn’t afford medical care but did not receive cash welfare. This early focus on the medically needy laid the foundation for what Medicaid has become today.
Unlike Medicare, which is funded through premium payments and is actuarially based, Medicaid is funded through general revenue. This structure allows for more flexibility and the ability to adapt to changing healthcare needs. As a result, Medicaid has grown significantly over the years, expanding to cover additional populations and services.
One key expansion of Medicaid occurred in 1972 with the creation of the Supplemental Security Income program, which provided assistance to individuals with disabilities and the elderly who were very poor. This expansion was accompanied by Medicaid coverage, further solidifying Medicaid’s role as a critical safety net for vulnerable populations.
Under the Carter administration, another significant expansion of Medicaid occurred with a focus on children. This expansion highlighted the ongoing evolution of Medicaid to meet the changing healthcare needs of the population it serves.
In conclusion, Medicaid’s journey from its origins in the Kerr-Mills Act to the comprehensive program it is today is a testament to the vision and dedication of key policymakers and advocates. Through strategic planning and thoughtful design, Medicaid has grown to become a vital lifeline for millions of Americans in need of quality healthcare coverage. Medicaid has a long and complex history that has evolved over the years to meet the changing needs of low-income individuals and families in the United States. Interestingly, the original statute of Medicaid contained provisions that hinted at where the program would eventually go. The Ribicoff Amendment, introduced by Senator Abraham Ribicoff of Connecticut, allowed states the flexibility to cover low-income children without requiring their families to receive cash welfare.
As time passed, the Department of Health and Human Services recognized the need to expand coverage to include poor pregnant women. This led to the addition of an unborn component to the Ribicoff child program, which paved the way for poor pregnant women to receive Medicaid coverage. However, the original program was tied to cash welfare assistance, which was declining over the years.
In the mid-1970s, there was a push to decouple Medicaid coverage from cash welfare funding levels and allow poor children and pregnant women to have their own eligibility criteria for the program. This effort was championed by Congressman Henry Waxman and his dedicated staff, who strategically worked to expand Medicaid to include more vulnerable populations.
By the turn of the 21st century, Medicaid had become a vital program for providing health coverage to low-income children, pregnant women, and individuals in need of long-term care and support. The program’s flexibility and ability to respond to various needs, such as natural disasters and economic downturns, have made it a crucial safety net for millions of Americans.
Medicaid’s financing structure has also played a significant role in supporting states during times of need. Federal funding has been used to help states maintain their Medicaid programs and expand coverage to more individuals, even during economic crises like the COVID-19 pandemic.
Overall, the evolution of Medicaid has been a testament to the dedication and strategic planning of lawmakers, advocates, and policymakers who have worked tirelessly to ensure that vulnerable populations have access to essential healthcare services. The program’s ability to adapt to changing circumstances and meet the diverse needs of its beneficiaries has solidified its place as a cornerstone of the U.S. healthcare system. Medicaid has long been a crucial component of the American healthcare system, providing support to the most vulnerable populations in our society. From its beginnings as a program to assist struggling clinics in the Great Society years, Medicaid has evolved into a powerhouse that serves millions of people across the country.
One of the key aspects of Medicaid’s impact is its role in supporting the health care safety net. Through programs like the disproportionate-share hospital payment program, Medicaid helps hospitals that serve a large number of low-income patients. This funding is essential for these hospitals to continue providing care to those in need. Additionally, Medicaid allows states to fund their public health systems and county-operated public health systems, ensuring that essential services are available to all residents.
In recent years, Medicaid has also become a leader in providing services like drug treatment, rehabilitation, and mental health care. These services are often overlooked by private insurance and Medicare, leaving a gap that Medicaid fills. By providing funding for these essential services, Medicaid plays a critical role in supporting the overall health and well-being of millions of Americans.
The fight over the repeal of the Affordable Care Act in 2017 marked a turning point for Medicaid. It became clear to many that the program had grown beyond its initial scope and was now a vital part of the healthcare system. Despite this realization, Congress made deep cuts to the program, putting many essential services at risk.
One of the most concerning changes to Medicaid is the implementation of work requirements. While some states had experimented with these requirements in the past, the new federal regulations are much more stringent. Individuals will now have to prove their eligibility for Medicaid at the point of enrollment, potentially leading to millions of people losing their coverage.
The future of Medicaid is uncertain, as the program faces continued threats and challenges. However, its importance in providing essential health services to millions of Americans cannot be overstated. As we move forward, it is crucial to protect and support Medicaid to ensure that all individuals have access to the care they need to lead healthy and fulfilling lives.
Medicaid expansion in certain states has revealed a stark reality – the focus is on saving money rather than providing healthcare to those in need. The enrollment process has been stripped of its humanity, reducing individuals to mere low-income statistics rather than people in need of care. The emphasis on cost-cutting measures has overshadowed the core purpose of Medicaid – to ensure access to healthcare for those who cannot afford it.
One of the major consequences of this approach is the impact on healthcare providers who rely on Medicaid for revenue. Community health centers, for example, stand to lose billions of dollars over a span of several years. The loss of funding may result in staff layoffs and reduced services, ultimately affecting the most vulnerable populations who rely on these facilities for care.
As the implementation of these changes looms closer, states are facing insurmountable challenges in aligning Medicaid with new work requirements. The complexity of the eligibility criteria and exemption categories poses a significant barrier to enrollment, further complicating the process for both individuals and healthcare providers.
The looming two-year timeframe for these changes to take effect may shed a light on the impracticality of the new system. States are ill-equipped to handle the administrative burden of linking Medicaid to work records, while healthcare providers are left scrambling to navigate the new requirements.
Despite the potential for a complete overhaul of the healthcare system, the immediate concern lies with the millions of individuals who may be left without access to care. The prospect of rebuilding a better system is overshadowed by the harsh reality of those who will suffer as a result of these changes.
As the debate continues, it remains to be seen whether Congress will reconsider its approach to Medicaid expansion and prioritize the needs of those who rely on these services for their healthcare.
The Affordable Care Act, also known as Obamacare, was implemented with the intention of strengthening the healthcare system in the United States. It aimed to address the gaps in the system and provide better access to healthcare for all Americans. Unfortunately, instead of building on this foundation, the decision was made to dismantle key provisions of the Affordable Care Act, such as rolling back assistance and Medicaid reforms.
On a positive note, we recently celebrated the birthday of Medicaid, a crucial program that provides healthcare coverage to millions of Americans. It is a vital safety net for those who may not have access to private insurance. However, with ongoing challenges and changes to healthcare policy, the future of programs like Medicaid remains uncertain.
In a recent podcast episode, healthcare experts discussed the implications of these changes and the importance of preserving and improving our healthcare system. It is essential to consider the impact of policy decisions on the health and well-being of all Americans.
As we navigate these uncertain times, it is crucial to stay informed and engaged in discussions about healthcare policy. By advocating for accessible, affordable, and efficient healthcare for all, we can work towards a system that truly serves the needs of the American people.
To stay updated on healthcare news and policy discussions, you can subscribe to podcasts like “What the Health?” and follow experts in the field. Remember, your voice matters in shaping the future of healthcare in our country. Let’s work together towards a healthier and more equitable healthcare system for all.
