12 Surprising Facts About Medicare

  • Introduction If you're in the leading edge of the Baby Boom, you're turning 65 in 2011 and you were 19-years-old – maybe a Hippie and a Flower Child – back in 1965 when Medicare was born. In fact, the program came into being largely because of the activism of that era. President John F. Kennedy made it part of his campaign promises in 1960 but not until after his untimely death in 1963 did Medicare finally become a reality. Now, along with all the hard data you're boning up on about Medicare, here to lighten the journey are some fun and fascinating factoids about the government's health insurance plan:
  • #1 Medicare was established in 1965 as the first step in a proposed national health insurance system. However, 46 years later in 2011, universal health insurance is still only available for people 65 and older and certain younger people with chronic conditions or disabilities.
  • #2 People 65 and over were targeted to receive Medicare because in July of 1966 when the program officially began, they had higher rates of poverty and lower rates of insurance than other population cohorts.
  • #3 At the beginning, everyone over the age of 65 was eligible to enroll but that policy was eventually modified so that only people over 65 who qualify for Social Security benefits as a worker or dependent are eligible. This includes about 98 percent of all people 65 and older.
  • #4 When Medicare began in the 1960s, people paid about 19% of their income for their care. That share was reduced at one point but it has risen steadily since then because health care costs have skyrocketed and the income levels of older Americans haven't kept pace.
  • #5 When Medicare began -- inpatient hospital care --accounted for about two-thirds of all spending. By now, Part B -- medical services and supplies --has garnered a larger share of the program.
  • #6 The program was expanded in 1972 to include people age 55 and older who receive Social Security Disability Insurance. There is a two-year waiting period. People with end-stage renal disease were also added to the program.
  • #7 At first, Medicare approved payments of basically all charges submitted by providers. Restrictions were gradually added, however. By now, Medicare pays a flat rate to hospitals based on each patient's diagnosis. Proponents say this has encouraged hospitals to be more efficient but detractors say it results in some premature discharges.
  • #8 Because Medicare requires hospitals to treat all eligible beneficiaries, a side effect was that this rule led to the desegregation in the 1960s of many hospitals that had formerly turned away African-Americans.
  • #9 Today, Medicare constitutes 14% of the federal budget
  • #10 Because of the aging of the Baby Boom generation, the number of people on Medicare is projected to rise from 47 million to 78 million between 2010 and 2030.
  • #11 Medicare spending is expected to rise from $511 billion in 2009 to $926 billion in 2018.
  • #12 Beginning in 2019, the Medicare Part A Hospital Insurance Fund will not have enough funds to pay for full benefits.

    If you would like more information on Medicare, be sure to visit ThirdAge's guide here.