Medicare and Medicaid have not been around as long as Social Security, but the two healthcare programs that provide coverage to the disabled, retired and less fortunate are no less important in the lives of millions of Americans. Medicare and Medicaid were established in 1965 and for more than 50 years there have been important milestones for each program. Below we take a closer look at some of the more important milestones.
- 1965
Medicare and Medicaid were enacted as Title XVIII and Title XIX of the Social Security Act, providing hospital, post-hospital extended care, and home health coverage to almost all Americans aged 65 or older (e.g., those receiving retirement benefits from Social Security or the Railroad Retirement Board), and providing states with the option of receiving federal funding for providing health care services to low-income children, their caretaker relatives, the blind, and individuals with disabilities. At the time, seniors were the population group most likely to be living in poverty; about half had health insurance coverage. To implement the Health Insurance for the Aged (Medicare) Act, the Social Security Administration (SSA) was reorganized and the Bureau of Health Insurance was established on July 30, 1965. This bureau was responsible for the development of health insurance policy. Medicaid was part of the Social Rehabilitation Service (SRS) at this time.
- 1972
Medicare eligibility was extended to individuals under age 65 with long-term disabilities and to individuals with end-stage renal disease (ESRD). Medicare was given additional authority to conduct demonstration programs. Medicaid eligibility for elderly, blind and disabled residents of a state was linked to eligibility for the newly enacted Federal Supplemental Security Income (SSI) program.
- 1988
The Medicare Catastrophic Coverage Act of 1988 was enacted, which included the most significant changes since enactment of the Medicare program, improved hospital and skilled nursing facility benefits, covered mammography, and included an outpatient prescription drug benefit and a cap on patient liability. The Medicare Catastrophic Coverage Act also provided for Medicaid coverage for pregnant women and infants up to 100% of the FPL was mandated; special eligibility rules were established for institutionalized persons whose spouses remained in the community to prevent “spousal impoverishment.” The Qualified Medicare Beneficiary (QMB) program was established to pay Medicare premiums and cost-sharing charges for beneficiaries with incomes and resources below established thresholds. The Clinical Laboratory Improvement Amendments (CLIA) of 1988 strengthened quality performance requirements for clinical laboratories to ensure accurate and reliable laboratory tests and procedures.
- 1997
The Balanced Budget Act of 1997 (BBA): The Children’s Health Insurance Program (CHIP) was created; limits on Medicaid payments to disproportionate share hospitals were revised; new Medicaid managed care options and requirements for states were established.
- 2003
The Medicare Prescription Drug, Improvement, and Modernization Act (MMA) made the most significant changes to Medicare since the program began. MMA created a new optional outpatient prescription drug benefit, effective in 2006, provided through private health plans allowing for competition among health plans to foster innovation and flexibility in coverage, covered new preventive benefits, and made numerous other changes. For the period prior to 2006, MMA created a temporary prescription discount card program. Beneficiaries with incomes less than 150% of the FPL became eligible for subsidies under the new Part D prescription drug program. MMA also required beneficiaries with higher incomes to pay a greater share of the Part B premium beginning in 2007.
- 2010-2012
The Patient Protection and Affordable Care Act (ACA), commonly known as the “Affordable Care Act,” was signed into law by President Barack Obama on March 23, 2010, for the first time prohibiting health insurance companies from denying or charging more for coverage based on an individual’s health status, providing for expansion of the Medicaid program, and subsidies for insurance purchased through State-based Marketplaces to ensure that private insurance is affordable. The ACA also provided a variety of other insurance reforms, like new preventive benefit requirements and prohibitions on dollar limits, and expanded Medicare drug and preventive services benefits.
More than 3.6 million people with Medicare saved $2.1 billion on their prescription drugs thanks to the Affordable Care Act. More than 25.7 million beneficiaries in Original Medicare received at least one preventive service following a cost-sharing waiver in the Affordable Care Act.
More than 6.8 million consumers saved an estimated $1.2 billion on health insurance premiums in 2012, due to the “rate review” provision of the Affordable Care Act. 3.5 million beneficiaries saved $2.5 billion on prescription drugs, for an average of $706 per beneficiary.
- 2013
The Health Insurance Marketplace opened on October 1, 2013. For the first time ever, all Americans were able to shop for affordable quality health coverage, and couldn’t be denied or charged more because they had a pre-existing condition. An estimated 37.2 million Medicare beneficiaries received at least one free preventive service including an estimated 26.5 million people with Original Medicare. 4.3 million seniors and people with disabilities saved $3.9 billion on prescription drugs, or an average of $911 per beneficiary.
