Happy Birthday to Medicare


This week, Medicare celebrates its birthday.  47 years ago on Monday, July 30th, President Lyndon Johnson signed into law the bill that created the Medicare Program.  Johnson signed the bill at the Truman Memorial Library in Independence, MO, with former President Henry Truman at his side. This was in recognition of Truman’s previous efforts to pass a national health insurance program.

President Johnson entered the room, to the traditional presidential anthem, “Hail to the Chief.”  He then opened his speech by giving tribute to former President Truman by saying,

The people of the United States love and voted for Harry Truman, not because he gave them hell–but because he gave them hope.  I believe today that all America shares my joy that he is present now when the hope that he offered becomes a reality for millions of our fellow citizens.

After signing the bill, Johnson presented Harry Truman with the very first Medicare card and Bess Truman, his wife, with the second, making them Medicare recipients number 1 and 2.







Prior to 1965, nearly half of the elderly had no health insurance and many others had inadequate coverage. Medicare was enacted to help assure that virtually all citizens age 65 or older would have health care coverage.

Medicare is a US federal health insurance program for people 65 or older and certain people younger than 65, who are disabled, have permanent kidney failure or Lou Gehrig’s disease.   The program helps pay the cost of health care but does not cover all medical expenses or the cost of most long-term care.  It is funded by payroll taxes and monthly premiums deducted from Social Security checks.  The Centers for Medicare and Medicaid Services (CMS) is the agency in charge of the Medicare program.

Medicare has four parts:  Part A (Hospital Insurance), Part B (Medical Insurance), Part C (Medicare Advantage) and Part D (Prescription Drug Coverage).

Medicare enrollment has steadily increased from about 18 million when the program began in 1966 to about 48 million today.  Total expenditures in 1966 were $3 billion vs. $549 billion in 2011.   The initial 1966 payroll tax of 0.35%, on the first $6,600 of wages, paid by both the employee and employer, is now at $1.45% with no wage limit.    According to the 2012 Medicare Trustees Report, the exhaustion date for Medicare Part A is the year 2024.  The acting CMS Administrator Marilyn Tavenner said,

The Trustees Report tells us that while Medicare is stable for now, we have a lot of work ahead of us to guarantee its future.

Medivest is a leading US company that offers assistance to those required to comply with the complex requirements of the Medicare Secondary Payer (MSP) Statue.  The MSP statute, enacted in 1980, essentially attempts to help preserve the Medicare Trust fund by insuring that if a Medicare beneficiary has other insurance coverage, that insurance should pay first before Medicare pays.


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