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50 Years Later, Medicare And Medicaid Are A Smashing Success

President Lyndon B. Johnson signed Medicaid and Medicare into law 50 years ago today. Simply, Medicaid provides health insurance for poor Americans, and Medicare provides insurance for Americans over 65 years old. In 1966 a large portion of seniors were uninsured. Today, nearly all seniors have health insurance. These programs have kept millions of Americans out of poverty and saved huge amounts in health spending.

CREDIT: Andrew Breiner
CREDIT: Andrew Breiner
CREDIT: Dylan Petrohilos
CREDIT: Dylan Petrohilos

Obamacare was intended to expand the eligibility requirements for Medicaid in every state, in order to enroll additional low-income Americans in the program — but that coverage expansion was derailed by the 2012 Supreme Court ruling that Medicaid expansion should be optional, allowing GOP-led states to opt out. States that have expanded Medicaid have seen a wide range of positive results. States that haven’t expanded Medicaid, meanwhile, have hurt their low-income residents, kept their uninsured rates high, and lost out on big savings.

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Several years ago, Oregon added 10,000 people to its Medicaid program by lottery, which set up a natural experiment. Researchers compared those who got to use Medicaid to those who didn’t, which controlled for the fact that Medicaid recipients are generally poorer and sicker than the general population. They found that Medicaid made recipients much less likely to have to have ‘catastrophic’ expenditures on health care, and made them less depressed, among other positive effects. This points to further benefits that could be gained from expanding Medicaid or Medicare to more Americans.

Not only did the law that created Medicare and Medicaid transform health care in the U.S., but it also threatened to withhold federal funding from any hospital that discriminated, effectively ending segregation in the hospital system. And still, 50 years after their creation, Medicaid and Medicare are very popular programs, ranked by Americans as the most important in the country.