August 18, 2015

Jack Reed and Sheldon Whitehouse: Medicare, Medicaid Mark 50 Years of Success

Fifty years ago today, President Lyndon Johnson signed into law the Social Security Act Amendments of 1965, creating a new nationwide health-care program for American seniors: Medicare. Today, Medicare continues to cover doctor’s visits and hospital care for older Americans in their time of need, and has been adjusted over the years to increase access to many types of preventive care and prescription drugs.

The amendments also established the Medicaid program, a joint federal-state program to provide basic insurance coverage for low-income and disabled citizens.

With this historic anniversary upon us, we want to reflect on the positive difference these programs have made for millions of Americans, and also look ahead to the challenges and opportunities of ensuring that both programs remain strong for future generations.

Before Medicare and Medicaid, almost half of all American seniors were uninsured.

Upon signing these programs into law, President Johnson said, “No longer will older Americans be denied the healing miracle of modern medicine. No longer will illness crush and destroy the savings that they have so carefully put away over a lifetime so that they might enjoy dignity in their later years… And no longer will this nation refuse the hand of justice to those who have given a lifetime of service and wisdom and labor to the progress of this progressive country.”

He also recognized former U.S. Rep. Aime Forand, D-R.I., one of the first authors of the legislation that became known as Medicare.

Former President Harry S. Truman, who attended the ceremony and became the first American to enroll in Medicare, added words of praise for “a responsive forward-looking Congress,” which included former U.S. Senators John O. Pastore and Claiborne Pell of Rhode Island, who both voted for the law.

Today, Senators Pastore and Pell would be proud of how successful Medicare and Medicaid have become. In 2012 alone, 180,000 Rhode Islanders were enrolled in Medicare. And following the expansion of Medicaid made possible by the Affordable Care Act, some 270,000 Rhode Islanders are now enrolled in either Medicaid or the Children’s Health Insurance Program.

Despite the progress we have made over the last 50 years, some Republicans in Congress have long sought to undermine these programs — most recently with a proposal to weaken the medical safety net by turning Medicare into a private voucher program.

The GOP’s faulty logic is that Medicare is too costly, and that it isn’t funded well enough to serve future generations. That’s just wrong.

Medicare has proven to be among the most cost-efficient forms of health insurance. Rising health-care costs are not a Medicare problem — they are a systemwide problem that is even worse for private insurers. In fact, the cumulative increase in health care spending per person for private insurance was 15 percent higher than for Medicare enrollees between 2007 and 2013.

Instead of attacking Medicare, we need to reduce costs throughout the health care system by improving the delivery of care, paying doctors for results rather than the number of tests performed, reducing costly medical errors, and more.

The Affordable Care Act provided our health-care sector with tools to meet those goals. Forty-five provisions in the law pursue health-care delivery system reforms to lower costs and improve patient outcomes. We’ve already seen Medicare and Medicaid cost estimates reduced by over a trillion dollars. As we continue to implement those reforms and reap the benefits, both Medicare and Medicaid will be placed on firmer financial footing for generations to come.

We’d also like to see Medicare negotiate with drug companies for lower prescription costs — something the Veterans Administration is allowed to do but which Medicare is barred from doing. Simply eliminating that ban on price negotiation could save anywhere from $230 billion to $541 billion over 10 years, according to one estimate. And we continue to support efforts to go after unscrupulous and fraudulent health-care actors.

Medicare and Medicaid have relieved the worries and improved the lives of millions of Americans over the last 50 years. Today, as we mark this anniversary, we are committed to improving and strengthening both programs so future generations will continue to benefit.

By: Jack Reed and Sheldon Whitehouse