Key Milestones in Medicare and Medicaid History, Selected Years: 1965-2003

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1965--Medicare and Medicaid were enacted as Title XVIII and Title XIX of the Social Security Act, extending health coverage to almost all Americans age 65 or over (e.g., those receiving retirement benefits from Social Security or the Railroad Retirement Board), and providing health care services to low-income children deprived of parental support, their caretaker relatives, the elderly, the blind, and individuals with disabilities. Seniors were the population group most likely to be living in poverty; about one-half had health insurance coverage.

1966--Medicare was implemented on July 1, serving more than 19 million individuals. Medicaid funding was available to States starting January 1, 1966; the program was phased-in by States over a several year period.

1967--An Early and Periodic Screening, Diagnosis, and Treatment (EPSDT) comprehensive health services benefit for all Medicaid children under age 21 was established.

1972--Medicare eligibility was extended to 2 million individuals under age 65 with long-term disabilities and to individuals with end-stage renal disease (ESRD). Medicare was given the authority to conduct demonstration programs.

Medicaid eligibility for elderly, blind, and disabled residents of a State could be linked to eligibility for the newly enacted Federal Supplemental Security Income Program (SSI). Eighteen million individuals were covered by Medicaid.

1977--The Health Care Financing Administration was established by Secretary Califano to administer the Medicare and Medicaid Programs.

1980--Coverage of Medicare home health services was broadened. Medicare supplemental insurance, also called Medigap, was brought under Federal oversight.

1981--Freedom of choice waivers (1915b) and home and community-based care waivers (1915c) were established in Medicaid; States were required to provide additional payments to hospitals treating a disproportionate share of low-income patients (i.e., disproportionate share hospitals [DSH]).

1982--The Tax Equity and Fiscal Responsibility Act made it easier and more attractive for health maintenance organizations to contract with the Medicare Program. In addition, the act expanded the agency's quality oversight efforts through peer review organizations.

1983--An inpatient acute hospital prospective payment system (PPS) for the Medicare Program, based on patients' diagnoses, was adopted to replace cost-based payments.

1985--The Emergency Medical Treatment and Labor Act required hospitals participating in Medicare that operated active emergency rooms to provide appropriate medical screenings and stabilizing treatments.

1986--Medicaid coverage for pregnant women and infants (up to 1 year of age) to 100 percent of the Federal poverty level (FPL) was established as a State option.

1987--The Omnibus Budget Reconciliation Act of 1987 strengthened the protections for residents of nursing homes.

1988--The Medicare Catastrophic Coverage Act (MCCA), which included the most significant changes since enactment of the Medicare Program, improved hospital and skilled nursing facility (SNF) benefits, covered mammography, and included an outpatient prescription drug benefit and a cap on patient liability.

Medicaid coverage for pregnant women and infants to 100 percent FPL was mandated; special eligibility rules were established for institutionalized persons whose spouses remained in the community to prevent "spousal impoverishment," qualified Medicare beneficiary program was established to pay Medicare premiums and cost-sharing charges for beneficiaries with incomes and resources below established thresholds.

1989--The 1988 MCCA was repealed after higher-income elderly protested new premiums. A new Medicare fee schedule for physician and other professional services, a resource-based relative value scale, replaced charge-based payments. Limits were placed on physician balance billing above the new fee schedule. …