On Friday, July 1, it will be 50 years since Medicare first began paying health benefits for older adults. It is an anniversary worth celebrating—and easy to forget that prior to Medicare half of all seniors had no insurance. But much has changed in a half century—and Medicare has not kept up. It is time to rethink the program—both the benefits it offers and how it is financed.
Many advocates are opposed to redesigning the program. They fear, not without reason, that some politicians see modernizing Medicare is just another opportunity to cut the program. But they need to recognize a reality: A rapidly growing population of chronically ill older adults is not being well-served by the traditional Medicare program.
Medicare is, in some ways, like a 1960’s Ford Mustang. It was, once, the coolest car imaginable. But now, it is hopelessly outdated. You can add disc brakes, seat belts, and new tires. But it will still be a 1965 Mustang.
It is the same with Medicare. In the decades since 1966, we’ve added a benefit for younger people with disabilities, benefits for drugs and hospice, and taken some modest steps to change the way doctors and hospitals deliver care. But at its core, Medicare is still built for the seniors of the mid-1960s and their medical needs, not for the seniors of the 21st century.
How much have things changed? A few statistics: A half-century ago, there were about 18 million people over age 65 in the US. Today, there are more than 45 million and by 2030 there will be more than 70 million. In 2016, one out of every seven Americans is over 65.
Living Longer Than Ever
We all know that one reason is that so many Americans were born in the decades after World War II. But that’s only part of the story. Thanks to medical technology, the Baby Boomers are living longer than any generation in history. If you made it to 65 in 1966, the year Medicare began enrolling participants, you could expect to live to about 79. Someone who turns 65 today will, on average, live to nearly 87—an additional eight years. And they will be living with chronic illnesses such as heart disease or cancer that might have killed them relatively quickly a half-century ago. Because they live longer, they will also be more likely to suffer from diseases of very old age, such as dementia.
Yet, Medicare is still primarily designed for people who suffer heart attacks, not those living for decades with heart failure. It will pay to repair your hip fracture but not for most of the care you need if you have Alzheimer’s disease.
The Affordable Care Act opened the door to some important experiments in care delivery, such as Accountable Care Organizations. A law passed last year may create new incentives for physicians to focus on health outcomes, rather than just doing procedures and tests.
But those are tentative steps. And updating an obsolete Medicare chassis with incremental changes is a bit like trying to build a new car by changing out the tires and brakes on that half-century old Mustang.
To think about how Medicare can support an explosion of seniors whose primary health concerns are chronic disease, let’s start from scratch: Imagine there is no Medicare. If Congress were going to build a health insurance program for older adults and younger people with disabilities, what would it look like?
To start, it would focus on its primary job: To improve people’s quality of life, not merely pay for endless tests and treatments. Of course it would continue to insure against medical costs. But as much as possible it would focus on that care that maximizes a person’s well-being.
It would provide the fully coordinated medical and social care that is so important to the quality of life of older adults. Recognizing that a healthy 65-year-old has vastly different needs than a 90-year-old at the end of life, its benefits would be flexible. It would recognize that a safe place to live and transportation to an adult day program might do more to improve the well-being of many seniors than pills and tests. And this health system needs to acknowledge its costs, and recognize that younger taxpayers, not seniors, pay the vast bulk of Medicare expenses.
I think we can get there. In future posts, I’ll describe how. But for now, let’s celebrate what Medicare has accomplished over the past half century. And start to think about what it can do over the next 50 years.