Academic journal article Health Care Financing Review

Overview: 40th Anniversary of Medicare and Medicaid

Academic journal article Health Care Financing Review

Overview: 40th Anniversary of Medicare and Medicaid

Article excerpt

INTRODUCTION

The Health Care Financing Review is celebrating the 40th anniversary of Medicare and Medicaid with articles on the following three themes: (1) the development of Medicare and Medicaid; (2) the significance of Medicare and Medicaid for the health and well-being of beneficiaries and their impact on the practice of medicine; and (3) future challenges facing the programs.

The goal of this issue is to take stock of the programs as several important milestones have been reached:

* Medicare is finally able to celebrate the addition of an outpatient prescription drug benefit, some 40 years after President Johnson first asked a task force to consider adding the benefit (U.S. Department of Health, Education, and Welfare, 1969). A Medicare drug benefit was frequently discussed and debated in the Halls of Congress resulting at one time in enactment of a drug benefit in 1988 only to see it repealed in 1989. Oral history interviews with many of the participants in the congressional debate surrounding the Medicare Catastrophic Coverage Act, are available on the CMS history page: http://www. cms.hhs.gov/about/history/. Many of the articles in this issue discuss the new drug benefit: its history, why it was so long in coming, and the challenges it poses for the future.

* Medicaid is now the larger of the two programs both in terms of persons enrolled and dollars spent; something not remotely envisioned at enactment or in most of the decades since.

* In fiscal year 2003, Medicaid had 41.4 million persons enrolled, compared to Medicare's 41.3 million and in fiscal year 2002, Medicaid spending by both Federal and State governments was $259 billion, which was greater than Medicare's spending of $256 billion. (1)

Medicare and Medicaid together serve about 1 in 4 Americans and spend about 1 in 3 of the Nation's health dollars. Both programs have grown substantially both in terms of the percentage of the population served and the dollars spent. For example, Medicare alone accounts for about i in 5 of the Nation's health dollars, about twice the share of the Nation's health spending as the 1 in 10 in 1970.

Articles in this Issue

To appreciate the role of these programs in the American political landscape, we begin the issue by taking a step back in time, viewing the enactment of Medicare and Medicaid in the broader historical context of reform movements in the twentieth century. The article by Berkowitz brings an historian's eye to what would have been called "sickness insurance" had it passed at the turn of the century, or a State-based program had it passed during the New Deal, or federally administered national health insurance for all ages had it passed in the 1940s. It was during the New Deal that concern over wages lost from illness was overtaken by the cost of treating the illness itself. During the World War II years, States were viewed by Federal officials as unreliable and inefficient partners who were pushed by a need to keep taxes low to a race to the bottom when it came to social programs. Such officials began to view health insurance as a Federal responsibility in order to create a comprehensive system without gaps. Hence, legislation in the 1940s featured Federal administration. In the 1950s, the idea of tying health insurance to Social Security served to keep it Federal and restricted coverage to the elderly. By the time Medicare and Medicaid were enacted in 1965, after decades of incubation, they represented a blend of a number of these approaches. Medicare was federally administered for the elderly on Social Security. Medicaid was State based and targeted to the poor on welfare.

Santangelo's article gives an historical perspective of why it took nearly 40 years to add drugs to Medicare. It is a story of much passion and deliberation in the halls of Congress and how hard it can be to come to a solution even when there is bipartisan agreement that there is a problem. …

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