The History Of Medicare, US Healthcare Scheme, From Hope To Funding Crisis
Oct 28th, 2010 Posted in health | no comment »The Medicare system, which exists in the United States today, is a social insurance program intended to provide health insurance coverage for people aged 65 and over, plus some other special groups such as disabled people. US Medicare is a single-payer health care system, and as such it is similar to Medicare in Canada and Australia, and to the NHS in the UK, except that American Medicare only covers a certain proportion of the population. This article covers the history of Medicare from its founding in the 1960s, to the funding challenges it faces today.
In a single-payer health care system there is one large insurance fund which covers the health care costs of the entire population, or a large group of the population. The single payer, which is usually the national government, collects the insurance premiums, usually in the form of a health tax. This money is then paid into the insurance fund, where it covers the health costs of the nation’s population.
Robert M. Ball, who was a former commissioner of Social Security in the Kennedy administration, examined the financing problems for health care for the elderly in 1961. Ball concluded that the major problem was that the elderly always required more frequent and more costly health care, because of their age, but at the same time they were less able to afford to buy private health insurance.
Ball then concluded that the only possible way to finance health care for the elderly was to employ the same mechanisms which are used to finance pension provision. This means that payments are collected from those of working age, and the benefits are provided after those people have retired.
Medicare supporters then can argue that Medicare is not like an unearned entitlement, but rather a form of social insurance. The people who are benefiting from the scheme today, are those who paid into the scheme when they were working. It is true that some people end up paying more in than they get out, but that is also true of any other insurance scheme.
However many conservative politicians, including Barry Goldwater, Ronald Reagan and George Bush Senior, opposed Medicare. They argued that such a scheme would lead to the end of individual responsibility, and perhaps even to the advent of socialism in the US.
Medicare became law in 1965. At the time Lyndon B. Johnston was president, and he enrolled the first two Medicare members: Harry S. Truman, and Mrs. Truman, the former president and first lady.
Now in the 21st century Medicare is facing a severe funding crisis. There are two reasons for this. Firstly people nowadays tend to live much longer: an increasing proportion of the population are over 65, and receiving benefits from the scheme; a reducing proportion of the population are under 65, and paying taxes into the scheme.
Secondly the costs of medical treatment have increased very rapidly, particularly for many new treatments which were not available when the scheme was set up in the 1960s.
It has been predicted that the scheme will run out of money in 2019 unless something is done. Fixing this crisis must therefore be a major domestic policy priority for US governments over the next decade.
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