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 pays the health costs of the entire population, or a large group of the population, such as people over 65 years of age. In these systems, an organization, the Federal government in the case of US Medicare, collects the insurance payments through taxes, and uses the fund to provide a universal health care service.
In 1961, in the US, Robert M. Ball (former commissioner of Social Security) recognized the obstacles to financing health insurance for older people. In simple terms, the old require more regular, and more costly medical treatment, on account of their age, while they have less disposable income to buy private health insurance because they are retired.
Ball therefore said that the only way in which health care could be funded for the elderly was to use the same mechanism which is used to fund retirement pensions. Payments should be collected from those who were in work, and able to pay, and the benefits should be provided after retirement.
Those who support Medicare would say that it is not an unearned entitlement. They would say it is social insurance, where people pay into the scheme when they are young, healthy, and in work, and they receive the benefits when they are old and sick.
Medicare has been opposed by many conservative US politicians including Ronald Reagan and George Bush Senior. These have often argued that Medicare was socialist medicine, would lead to a socialism and/or communism in America, and would lead to an end of individual responsibility.
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.
The most alarming projections from the actuaries responsible for monitoring the fund, are that the health insurance fund will be insolvent by 2019. Resolving this funding crisis in American health care will therefore be one of the main priorities of US Federal governments in the next decade.
In a single-payer health care system there is one large insurance fund which pays the health costs of the entire population, or a large group of the population, such as people over 65 years of age. In these systems, an organization, the Federal government in the case of US Medicare, collects the insurance payments through taxes, and uses the fund to provide a universal health care service.
In 1961, in the US, Robert M. Ball (former commissioner of Social Security) recognized the obstacles to financing health insurance for older people. In simple terms, the old require more regular, and more costly medical treatment, on account of their age, while they have less disposable income to buy private health insurance because they are retired.
Ball therefore said that the only way in which health care could be funded for the elderly was to use the same mechanism which is used to fund retirement pensions. Payments should be collected from those who were in work, and able to pay, and the benefits should be provided after retirement.
Those who support Medicare would say that it is not an unearned entitlement. They would say it is social insurance, where people pay into the scheme when they are young, healthy, and in work, and they receive the benefits when they are old and sick.
Medicare has been opposed by many conservative US politicians including Ronald Reagan and George Bush Senior. These have often argued that Medicare was socialist medicine, would lead to a socialism and/or communism in America, and would lead to an end of individual responsibility.
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.
The most alarming projections from the actuaries responsible for monitoring the fund, are that the health insurance fund will be insolvent by 2019. Resolving this funding crisis in American health care will therefore be one of the main priorities of US Federal governments in the next decade.
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