Medicare at 39

Thursday, July 29, 2004

By Charlie Jarvis

A 39th birthday, generally speaking, is a mournful milestone. The 40th birthday, marking the passage of youth and onset of middle age, is mere months away. It's not a particularly pleasant time.

In the case of Medicare, however, the 39th birthday is cause for celebration. Created by a stroke of the pen on July 30, 1965, Medicare has benefited millions of older and disabled Americans who would otherwise have gone without health insurance. In so doing, it has increased life expectancy, improved the quality of life and provided peace of mind to countless American families.

In the period before President Lyndon B. Johnson signed the Medicare and Medicaid Bill, a national survey found that barely more than half of the country's senior citizens -- those 65 and older -- had health insurance. Illness for the uninsured was often financially devastating to both the victim and the victim's family.

"No longer will illness crush and destroy the savings [older Americans] have so carefully put away over a lifetime so they might enjoy dignity in their later years," President Johnson said at the bill's signing ceremony. "No longer will young families see their own incomes, and their own hopes, eaten away simply because they are carrying out their deep moral obligations."

The ensuing decades have borne out Johnson's prediction. Taking up Medicare's promise to provide health coverage to nearly all Americans over 65, almost 19 million beneficiaries enrolled as soon as the program took effect in 1966. Today, more than 40 million Americans, including some disabled citizens and victims of kidney disease, benefit from Medicare. That number is expected to top 77 million, or nearly a quarter of the population, by 2030.

In addition to the intangible "dignity" noted by Johnson, Medicare has produced more tangible benefits in longer lives. A woman born in 1960 had a life expectancy of just over 73, while a man could expect to live to about 67. By 2000, women's life expectancy had shot up to nearly 80, while men's had jumped to 74. In 1960, a 65-year-old woman could expect to live another 16 years, while a man of the same age would probably see another 13 years. By 2000, those numbers had climbed to 19 and 16, respectively.

Declining poverty is another tangible legacy of Medicare. The poverty rate among those over 65 was an astounding 30 percent when Johnson signed the new legislation. By 1998, the poverty rate among senior citizens had plunged to 10 percent. Take away the devastating financial impact of illness, and the nation's most vulnerable citizens become considerably less so.

And as Medicare approaches middle age, it shows no signs of slowing down. Just last fall, President George W. Bush signed an important Medicare reform bill creating a prescription drug benefit. A significant factor behind increased life expectancy is the use of prescription and over-the-counter drugs both to treat illness and to head off costlier, more invasive treatments such as surgery. The Medicare reform bill, which encourages the use of drug therapy, will continue that trend.

When the benefit begins in January 2006, the price of prescription drugs will be cut in half. Just last month, eligible Medicare beneficiaries began using new drug discount cards, which cut the price of prescriptions by 10 to 25 percent. Both the benefit and the card offer additional savings to low-income Americans.

Before the advent of Medicare, the threat of devastating illness and ruinously expensive treatment terrified millions of older Americans and their families. Thanks to Medicare, however, older and disabled Americans enjoy a measure of emotional and financial security against that threat. When it turns 39 late this month, Medicare is entitled to a very happy birthday indeed.

Charlie Jarvis is chairman and chief executive of the United Seniors Association.

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