The Health of Medicare at 50
Across the country, celebrations large and small were recently held in honor of Medicare’s 50th birthday. These celebrations were well deserved since Medicare is one of the most successful programs of the past century. And while the excitement of the birthday still lingers, no one should rest on their laurels. Policymakers must apply lessons learned to present challenges and make the changes necessary to secure Medicare for the future. The work to ensure another successful 50 years has just begun.
Since it was signed into law in 1965, Medicare has grown into the nation’s largest healthcare program, covering over 54 million Americans age 65 and over as well as individuals with certain disabilities. Over the years, the program’s increased focus on preventive care has helped increase the nation’s life expectancy from about 70 years in 1965 to nearly 80 years today. Every month, about 250,000 Americans turn 65 and become eligible for the program. As the baby boomer generation continues to age, Medicare’s biggest challenges include supporting a larger “family” of beneficiaries, staying fiscally “healthy,” and reducing costs.
By 2030, 76 million additional baby boomers will be eligible for Medicare, but there will not be enough Americans paying into the program to sustain the current level of care and benefits. That same year, Medicare is expected to be bankrupt; its own 65th birthday.
Until recently, Medicare has been on an unsustainable financial path. The program’s method of paying for care, called fee-for-service, which pays physicians for each and every test and procedure regardless of benefit, contributed greatly to higher spending without improving health outcomes. When this reality is coupled with the aging baby boomer generation, the prognosis for Medicare’s long-term health looks grim.
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