Despite critics, Medicare turns 50

By C.V. Allen, M.D.
Modesto (Calif.) Bee, July 16, 2015

Happy 50th birthday, Medicare!

You were a long time coming. With the Great Depression of the 1930s came demand for both health insurance and old-age pensions. Conservatives and the American Medical Association raised the cry of “socialized medicine” – threatening to sink both efforts.

Bowing to reality, reformers cut the health insurance portion adrift and the pension benefits of Social Security became law in 1935.

In the 1940s, President Harry S. Truman proposed a national health care program, but this time it was a casualty of the Cold War – a frightened public was told government medicine was communism, guaranteed to destroy all our freedoms. Again, that propaganda came from the AMA and a growing health care industry.

Among the opponents was Ronald Reagan, then still an actor and unofficial messenger boy for the conservatives and the AMA, who saw in a national health plan the eventual invasion of “every freedom we have known.” Again, reform failed.

The early ’60s brought convergence of three forces – increasing cost and effectiveness of medical care, increasing public demand for health solutions and the leftward shift of the electorate. It was a time when “liberal” was not a dirty word and reform found new life.

So Medicare became law on July 30, 1965. But its passage came with a concession. There would be no national health care system. Period.

Partial reform came in two layers – Medicaid, a state program for the poor, and Medicare for the aged. Thus did the commercial health insurers fix responsibility for the poor and aged on government, retaining for themselves the affluent, employed, under-65 population from which profits could be made. Moreover, the health insurance industry initially demanded – and got – compensation guaranteed to be “usual, customary and reasonable” – which eventually became none of these things.

Over the next 50 years, Medicare proved its critics wrong. It became, along with Social Security, the most effective social program in America’s history.

With low administrative expenses, all-inclusive philosophy and unrestricted choice of providers, Medicare is the most popular medical insurance system in the nation – and the most efficient. But problems abound, including the annual increase in per-capita expenses (higher than inflation, but lower than the private sector), congressional restrictions on reasonable cost containment policies, a high rate of consumer fraud and an uncanny ability of the private insurance sector to find ways to divert public money into private hands.

Even 50 years later, critics see in Medicare a financial tsunami waiting to happen. Others see it as a solution to our present dysfunctional, fragmented health care system – the most expensive in the industrial world despite failing to insure a sixth of its population.

An updated and improved “Medicare for all” could well be the template for radical reform required to lower costs and provide universal coverage – “everybody in, nobody out,” a single set of regulations, low administrative expenses, and a partnership between a private delivery system and a government assuming administrative and financial responsibilities. An impossible dream? So was Medicare five decades ago.

Either way, 50 million Americans go to bed each night knowing medical care will be there if needed. Well done, Medicare, and many happy returns.

C.V. Allen is a semi-retired Modesto doctor.

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