Impact of Medicare

In the 1960s, as the nation’s population grew and aged, the United States was faced with a health crisis.  The elderly, who earned very little after retirement, were not able to afford proper health insurance and instead relied on costly emergency procedures.  In 1965 the United States Congress voted to create Medicare under the Social Security Act, initially offering health insurance to individuals sixty-five years of age and older, despite their class, gender, race, or medical history.

Since its establishment in the sixties, Medicare has undergone significant changes in the terms of its coverage options, eligible enrollees and costs to the government and taxpayer.  Most recently, lawmakers have revisited the benefits of Medicare in discussions on President Barack Obama’s proposed Obamacare program.  These discussions have necessitated a reconsideration of Medicare and its impact on health care in the US. 

Many opponents of Medicare claim that it is inefficient, that it is mismanaged and that it is a waste of government expenditure.  A 2006 National Bureau of Economic Research study by Amy Finkelstein and Robin McKnight revealed that, since its establishment, Medicare spending has represented a significant increase in both governmental and personal health care expenditure, while doing nothing to decrease elderly mortality.  This research has been cited to explain the inadequacy of Medicare as a service intended to benefit the elderly and disabled. 

However, what many analysts fail to mention are the potential benefits to the elderly and disabled beyond mere life extension.  In 2010 Medicare provided health insurance to 48 million Americans, the vast majority of whom are over retirement age, and typically earn less than half of US average income.  Even with an average household savings of around $67,000, these men and women fall pitifully short of covering their medical costs.  Without access to government-subsidized health care, many elderly people would not seek proper preventative care, often requiring more expensive emergency care instead.  Additionally, Medicare has had a significant human rights impact, allowing the elderly and disabled to lead dignified and comfortable lives.

While both sides root their arguments in data, the debates on the impact of Medicare reflect larger debates on the role of government in health care generally in the United States today.  Undoubtedly, Medicare has had a significant positive impact on the millions who benefit from its services, but this personal impact may not be valuable enough to justify its cost in an overburdened economy.