Medicare turns 50
Federal health insurance program reaches milestone anniversary, push continues for ’Medicare for All’
Dr. Aldebra Schroll understands the workings of Medicare from the physician’s side of health care, but also as the daughter of policyholders. Her parents, ages 89 and 87, retired from New York to New Mexico 25 years ago and continue to live independently.
“When medical issues come up, it’s nice to know that they can access health care without a lot of worries or concerns,” Schroll said by phone while visiting her parents. “As a family member, it’s a relief to know they have something that’s necessary and I don’t have to worry about them losing their home because of medical complications; it provides a certain security, taking care of your loved ones.”
Financial peril—expenses from health care depriving seniors of all their resources—was in fact the impetus for Medicare, which celebrates its 50th anniversary next week.
Schroll has plenty of experience with federally funded health insurance. Before joining Chico State’s Student Health Service in 2011, she worked as a general practitioner in private practice with many North State seniors as her patients. She has spent parts of the past five years in Colorado providing hospice and palliative care—expertise for which she has received board certification and now also utilizes when called upon by Enloe Medical Center.
She’s also a member of Physicians for a National Health Program (PHNP), which advocates for a single-payer plan. Along with coordinating 50th birthday celebrations, PHNP has been lobbying on behalf of HR 676, aka the Expanded and Improved Medicare for All Act, which essentially would offer a Medicare-like plan to every U.S. resident.
For Schroll, insurance is more than a financial issue. When she was in private practice, patients would often withhold their medical information because they were afraid their private insurer would drop them, and that fear lingers even since the Affordable Care Act passed with protections for pre-existing conditions.
“That wasn’t the case with Medicare,” she said. “People didn’t feel uncomfortable revealing their health history because they didn’t have to worry about losing their plan.”
President Lyndon Johnson signed Medicare into law on July 30, 1965, beside former President Harry Truman in Independence, Mo. Truman, who first proposed a national health care program in 1945, became the first beneficiary.
David Sayen, Medicare’s regional administrator for California, explained that when the program started, only one in four Americans had private health insurance. The 75 percent who didn’t, he said, often would find themselves in poverty after hospitalization for a serious ailment. Even though medical care cost less then, “they were hobbled.”
Medicare was designed to protect people in retirement, but it is not just for the elderly; it now also covers people with disabilities and certain disabling illnesses, along with their dependents. The Medicare Modernization Act (MMA), signed by President George W. Bush in 2003, added a prescription drug component—Part D—among other changes, including “value-based pricing” in an effort to control costs.
Enrollment after the first year was 19.1 million; today it’s around 55 million.
Sayen says he doesn’t “do crystal balls” when asked what’s on the horizon for Medicare. He did say by phone from the Bay Area that laws “always have a long tail”—meaning that legislation takes time to implement. Elements from the 12-year-old MMA, and even the 19-year-old Heath Insurance Portability and Accountability Act (HIPAA), are process-pending.
Sayen understands the reasoning behind single-payer advocates’ admiration of Medicare, which is often considered a model of reform. After all, the program has demonstrated longevity, which gets equated with sustainability. Without passing judgment or taking a political stance, he highlighted some key considerations.
“Medicare has been a great success in that it has improved the health and well-being of seniors and people with disabilities,” Sayen said. “But the challenge ahead is to manage the cost of the program so that the benefits can be maintained.” His agency, CMS (Centers for Medicare & Medicaid Services), continues to develop new payment structures in an attempt to slow the rise of health care costs because, as the largest single payer, i.e. customer, “Medicare is the gorilla in the room,” he said. Its decisions are “driving what happens” industry-wide.
Consolidating all plans into a one entity would make that gorilla even larger. Sayen compared the impact on negotiations with providers, equipment manufacturers and pharmaceutical makers to the dealings the Defense Department has with defense contractors.
Single-payer supporters point to Medicare’s low administrative costs: roughly 3 percent, compared to around 30 percent for insurance companies.
“While our administrative costs appear low, we cannot use benefit costs for safeguards,” he said, referring to fraud protection. “Private insurers use dollars to protect dollars.”
This may be why Medicare imposes fewer hurdles—claim denials, prior authorizations—for doctors to clear. That ease of use earned praise from Schroll, who acknowledged Sayen’s concern for fraud but said there is a middle ground to be found for administrative costs.
As for fears of a monopoly, Schroll offered a reminder of the purpose of Medicare.
“Is it for the stockholders? Is it to provide health care to people? To negotiate for prices that benefit people would not benefit stockholders, probably,” she said. “We as a society have to decide where we are going to come down on that.”