Eyes on ACA as Medicare, Medicaid Celebrate 50-Year Anniversary

When he signed legislation creating Medicare and Medicaid 50 years ago, President Johnson wanted to ensure that U.S. seniors would not "be denied the healing miracle of modern medicine" and that goal largely has been reached, the Los Angeles Times reports.

According to the Times, the programs have helped to reduce the rate of uninsured U.S. seniors from 48% in 1962 to less than 2% now. Combined, the programs now cover one-third of U.S. residents and have a total annual budget of more than $1 trillion.

Programs' Changes Could Preview ACA

According to the Times, both programs have undergone a series of changes throughout the years, which could preview what is to come for the Affordable Care Act.

The ACA was the product of political and industry debate, similar to that which created Medicare and Medicaid. Julian Zelizer, who recently wrote a book on the programs, said such political "attacks" were "vicious." To rein in debate, in their beginnings Medicare and Medicaid were intentionally limited. For example, Medicare did not offer prescription drug coverage or set reimbursement rates. In addition, similar to the ACA's Medicaid expansions, states could choose whether to implement Medicaid, which initially only offered coverage to low-income mothers and children.

Both Medicare and Medicaid were expanded over the years to include coverage for broader populations and additional services. The expansions occurred throughout various political climates and, for Medicaid, in various states. For example, Medicaid was expanded to include:

• Pregnant women and a larger population of children in the 1980s;
• Children from working-class families in the 1990s; and
• Low-income adults without children in some states.

Meanwhile, President George W. Bush in 2003 led the effort to create Medicare Part D, through which beneficiaries obtained prescription drug benefits. That marked the largest expansion of Medicare since its creation. In addition, Medicare Advantage was created after Republicans pushed Democrats to allow for more participation of commercial insurers in Medicare.

Meanwhile, Medicare since the 1980s has used its clout as the country's largest payer to spur quality and efficiency improvements among health care providers.

While Medicare and Medicaid ultimately were enacted with bipartisan support, the ACA was not and it remains the subject of intense political debate. However, experts say political views of the ACA could be shifting. For example, Republican officials in some states seem to be more accepting of the law, with some enacting more conservative versions of Medicaid expansion. Jonathan Oberlander, a political scientist at the University of North Carolina, said, "Once you have government insurance programs, they tend to stay around. Lots of people have screamed about socialized medicine over the years, yet on marched Medicare and Medicaid" (Levey, Los Angeles Times, 7/29).

Use of Private Health Plans Under Medicare, Medicaid Soars

In related news, use of private health plans is growing rapidly under Medicare and Medicaid, countering predictions from individuals who helped to create the programs, the New York Times reports.

According to the Times, more than 30% of the 55 million U.S. residents enrolled in Medicare and more than 50% of Medicaid's 66 million beneficiaries are enrolled in private health plans through the programs. Increased use of private health plans under the programs has come as state and federal governments contract with private insurers to provide and coordinate care for a growing number of beneficiaries in an effort to curb costs and improve quality.

According to the Times, architects of Medicare and Medicaid had thought private health plans were unaffordable for many low-income U.S. seniors. Theodore Marmor, a professor at Yale University and a Medicare historian, said, "They believed that commercial health insurance had failed the elderly, and they wanted to replace it with social insurance, as a first step toward similar coverage for the rest of the population."

However, expanded enrollment in private Medicare Advantage plans has surged, with such plans available to almost 99% of Medicare beneficiaries. Surveys have shown that Medicare beneficiaries largely are satisfied with Medicare Advantage, which offer covers more than Medicare with a supplemental insurance plan.

Still, some observers question whether private health plans will curb government costs over the long term. In addition, skeptics have voiced concern over whether the plans provide less coverage. For example, Judith Stein, executive director of the Center for Medicare Advocacy, said, "Medicare Advantage plans are often more stingy with benefits." She added, "We have seen many cases in which people who are really sick cannot get coverage for nursing or therapy at home or in a skilled nursing facility -- coverage that they would be able to get if they were in traditional Medicare." Experts have noted that Medicare's private health plans might not be best suited for all enrollees (Pear, New York Times, 7/29).