Thomas P. Miller Of AEI On The History Of Medicare

See Medicare at 50: Did it solve the right problems without creating new ones?. Excerpts:

"The standard history for Medicare’s origins usually begins with highlighting the inadequacies of existing insurance coverage for the elderly in the early 1960s. The most extreme pro-Medicare claims assert that only one-quarter of Americans over age 65 had “meaningful” private health insurance coverage. However, that calculation stacks the deck by setting the coverage bar fairly high. It uses either Blue Cross hospital insurance coverage of the time, or any other insurance paying 75% or more of hospital bills as its minimum threshold for providing adequate “comprehensive” coverage.

A higher, and more frequently cited, measure of insurance coverage for the elderly in the early 1960s comes from the 1963 National Health Survey. It found that 54% of Americans age 65 and above had some type of hospital insurance, compared to 71% for the general population over age 17. Even this difference between access to care for older versus younger Americans in the years immediately before Medicare can be reduced further, to some degree. The federal government’s survey excluded seniors who were covered under various government health and wealth programs. However, a large portion of the potential health care assistance to most older Americans under the Kerr-Mills program (enacted in 1960) or hospitals still under Hill-Burton grant obligations, was needs-based, and it often remained more hypothetical than immediately accessible."

"health insurance coverage for retirees between age 65 and 74 roughly doubled in the 10 years from 1952 to 1962. According to 1965 congressional testimony by H. Lewis Rietz (representing several large insurance associations), by 1962, 60% of the non-institutionalized aged had some form of voluntary health insurance."

"... the 1963 National Health Survey...After adjusting hospital and surgical insurance coverage rates first by age, and then by income, the Survey’s researchers concluded that “income is a more important factor than age in determining health insurance coverage.”Subsequent decades of much more generous social security benefits, along with improved private retirement benefits and appreciation of home values, substantially changed the relative income distribution ranking of the elderly and freed many seniors from poverty"

"at least in its first 10 years of operation, Medicare and the near-universal coverage it provided to seniors somewhat surprisingly played essentially no role in the dramatic decline in mortality rates for the elderly that began in the late 1960s. One reason for this lack of any discernible impact on this most basic measure of health outcomes was that, prior to Medicare, individuals with life-threatening, and treatable, health conditions sought care even if they lacked insurance, as long as they had legal access to hospitals. Individuals without insurance paid out-of-pocket, or relied on charity care."

"Medicare was associated with a substantial reduction in the elderly’s exposure to the financial risks of out-of-pocket health spending. The greatest such effects were for the top 25% of the out-of-pocket health spending distribution among seniors. Medicare’s introduction was associated with a 40% decline in their personal out-of-pocket spending."

"It triggered substantial new entry into the hospital sector, leading to a 37% increase in hospital spending within its first five years. Medicare powered much more rapid and extensive adoption of new medical technologies, and it fundamentally altered the practice of modern medicine."

"the overall spread of all health insurance coverage in the US between 1950 and 1990 may explain half of the six-fold increase in real per capita spending over this period."

"By one accounting measure, built on unrealistically favorable policy assumptions, the present value of the additional non-dedicated resources that would be necessary to meet projected Medicare expenditures from a 75-year “budget” perspective amounts to at least $27.8 trillion."