Medicare turns 49 this week. Medicare was passed into law in 1965 under President Lyndon B. Johnson and it was designed to provide the elderly and disabled health care benefits that might not be available otherwise.
Medicare often gets a bad wrap but for the most part it has served its purpose admirably. Medicare is more efficient than private health insurance and is administered at a cost of 3 percent to 4 percent, as opposed to private health insurance, which has administrative costs above 15 percent. The cost discrepancy is partially explained by the need for private insurance to create margin and in the Federal Governments ability to control Medicare pricing. Medicare provides better access to care than any private insurance, better financial protection and higher patient satisfaction.
Medicare is often referred to as an entitlement program but even that’s an unfair description. Most working adults who approach Medicare eligibility age have paid into Medicare over the course of their career so it’s really more like pre-paid health insurance. For many hospitals, ours included, Medicare pays the bills but more importantly Medicare describes the people they serve. Medicare is by far our largest payer which means more people walk through our door with Medicare than any other pay source so Medicare is who we serve.
Medicare is the brunt of jokes and a political hotbed but Medicare is an important piece of the United State’s health care model – I’d argue the most important piece. Medicare is far from perfect but it has sustained for 49 years and there are no signs its going to slow anytime soon.