It’s hard to believe that there are people alive today who were born before either Social Security or Medicare existed. It’s true. You can’t talk about Medicare without mentioning Social Security, since Medicare and Medicaid programs are an amendment to the Social Security Program.
Knowing more about its history helps us understand why Original Medicare isn’t full coverage and why choosing a Medicare Advantage Plan is important.
Social Security was a program born out of the Great Depression (1929-1941). As a fairly young nation, the United States made errors that the Federal Reserve now admits – leaving those most vulnerable to pay the price – the poor and elderly.
“Regarding the Great Depression, … we did it. We’re very sorry. … We won’t do it again.”
—Ben Bernanke, November 8, 2002, in a speech given at “A Conference to Honor Milton Friedman … On the Occasion of His 90th Birthday.” Federal Reserve
Social Security was signed into law in 1935 by President Franklin D. Roosevelt. Administering the act was a bit more complicated. For example, paying out monthly benefits didn’t happen until 1942. There were lump sums paid, but first SSA needed to establish Social Security Numbers, the trust funds, and the Federal Insurance Contribution Act (FICA) payroll tax. That employer/employee contribution was put into the trust fund from which benefits were paid.
The Medicare and Medicaid Act was signed into law in 1965 by President Lyndon B. Johnson. Medicare has evolved and grown over the years with cost of living increases as well as the inclusion of spouses and survivor benefits. You can read the full text of the 1965 act on the National Archives website.
“Meeting this need of the aged was given top priority by President Lyndon B. Johnson's Administration, and a year and a half after he took office this objective was achieved when a new program, ‘Medicare,’ was established by the 1965 amendments to the social security program.” SSA.gov
President Harry S. Truman pushed for universal health care in 1950, and that wasn’t received well by those who saw it as socialization. Still, the aged population continued to grow, hospitalization costs continued to increase, but retirement incomes did not keep up. The need for a program to help with hospitalization costs became clear. This is why Original Medicare (Parts A & B) covers the costs of hospitalization and not primary care visits or prescriptions.
“To provide a hospital insurance program for the aged under the Social Security Act with a supplementary medical benefits program and an extended program of medical assistance, to increase benefits under the Old-Age, Survivors, and Disability Insurance System, to improve the Federal-State public assistance programs, and for other purposes.
Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled, That this Act, with the following table of contents, may be cited as the ‘Social Security Amendments of 1965’.” National Archives
Government programs aren’t always as clear cut as constituents would like them to be, to be frank. And at this point in time, the Federal Government – by today’s standards – was still small. It was easier for President Lyndon B. Johnson to amend Social Security – adding Medicare – than for it to be a separate institution.
Medicare was operated by the Social Security Administration until 1977. It’s currently managed by the Center for Medicare and Medicaid Services (CMS).
A brief history may have you wondering if you have the right coverage or enough coverage. Healthy Access takes pride in consumer education and healthcare services to help ensure every person researching and enrolling in Medicare receives expert education, decision support, and trusted activation options. Are you ready for a free, no-obligation quote?