Medicare at 50: Successes, shortcomings

By Louis Balizet, M.D.
Pueblo (Colo.) Chieftain, July 30, 2015   

Fifty years ago – on July 30, 1965 – President Lyndon Johnson signed Medicare into law.

Medicare’s 50th birthday seems a good time to reflect on the program’s successes, shortcomings and future.

First, Medicare’s successes:

  1. Medicare insures access to health care for more than 50 million Americans.
  2. Medicare has covered hundreds of millions since 1965.
  3. Medicare is popular – ranking with Social Security as the most valued government service.
  4. Medicare has shielded countless millions from financial ruin due to medical expenses – protection that, outside the Medicare population, 35 million Americans still lack.
  5. Medicare has sparked spectacular growth in hospitals, medical practices, pharmaceutical companies and medical device manufacturers.
  6. Medicare is efficient – it operates with an overhead of 2 percent, compared to 20 percent in private health insurance.
  7. Incidentally, Medicare ended segregation in over a thousand hospitals in the South, since its substantial benefits were withheld from institutions that maintained separate wards based on race.

But Medicare has its shortcomings:

  1. Medicare has become intertwined with the private health insurance industry, making health care overall much more complicated and expensive for its beneficiaries.
  2. Medicare has failed to address adequately the cost of medical care.
  3. Medicare’s benefits are too thin in many instances; people over 65 spend an average of 20 percent of their income on health care expenses.

What is Medicare’s future?

Despite its shortcomings, Medicare is still the best template for delivering health care to all Americans in the future, much more so than the Affordable Care Act:

  1. Medicare’s shortcomings are fixable (as opposed to the ACA’s baked-in problems). Medicare’s benefits can be broadened, eliminating the need for most, if not all, supplemental private insurance. The statutory prohibition against bargaining for drug prices with pharmaceutical companies can be repealed.
  2. Thus modified, Medicare could simply be expanded to cover all Americans, eliminating in the process the ACA, Medicaid, CHIP and private medical insurance. The age for eligibility for Medicare could be lowered from your 65th birthday to the day you are born.
  3. The idea of National Health Insurance is not a crazy or unattainable one. It is the norm in every developed country in the world but ours.

I practiced medical oncology in Pueblo between 1976 and 2013. Over that time, an ever-increasing number of my patients suffered as much from the financial burden of their cancer care as the cancer itself. In fact, 2 percent of all cancer patients file for bankruptcy. 

Thanks to Medicare, people over 65 are largely shielded from the tragedy of financial ruin from illness. Should this protection not be afforded to all Americans, regardless of age? 

Medicare should be improved, streamlined, then expanded to all Americans. By showing us the way out of our present complicated, unfair and exorbitantly expensive medical system, Medicare may yet enjoy its finest hour. 

Dr. Louis Balizet practiced medical oncology in Pueblo between 1976 and his retirement in 2013, first at the Southern Colorado Clinic, then at Rocky Mountain Cancer Centers. He is active in Physicians for a National Health Program, a physician group that advocates for universal single-payer health care.