Why Do We Have Medicare Part A and Part B?
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Important Medicare MilestonesBefore we dive into the history of Medicare, let’s take a look at the key milestones in Medicare coverage. These crucial events helped expand health care coverage and eligibility.2
- 1965: Medicare and Medicaid were signed into law under the Social Security Act.
- 1966: Medicare coverage began. For the inaugural Medicare rollout, more than 19 million Americans enrolled in Medicare.
- 1972: Medicare eligibility was extended to those under 65 who had long-term disabilities and to those with end-stage renal disease.
- 1980: Medicare supplemental insurance, also known as Medigap, became available through private insurance companies to help fill the gaps in Medicare’s coverage.
- 1983: The Medicare hospice benefit began offering the option for enrollees to receive all-inclusive hospice care to relieve pain and help manage symptoms in a home setting instead of in an institution.
- 1988: The Qualified Medicare Beneficiary (QMB) program, one of the four Medicare Savings Programs, was established to help pay Medicare premiums and cost-sharing charges for people with limited income and assets.
- 1990: New federal standards for Medigap were enacted to ensure all insurance companies offered identical plan coverage.
- 1997: Medicare Part C, also known as Medicare Advantage, was established as an alternative to Original Medicare. Part C was offered through private insurance companies contracting with Medicare.
- 2006: Medicare Part D was launched to provide much-needed prescription drug coverage.
Did You Know: Medicare’s two parts (Part A and Part B) each cover a particular set of services and come with unique cost-sharing expenses. Find out what each part covers in our Medicare annual enrollment guide.
The History of Original Medicare (Part A and Part B)President Lyndon B. Johnson signed into law legislation that established Medicare and Medicaid on July 30, 1965. At the time, seniors were the most likely population group to be living in poverty. Only around half of seniors had health insurance coverage at the time.2 The process of legislating Medicare was certainly challenging. It began with the contentious battle that raged over the enactment of the Medicare program in the 1960s. On one side were the Democrats and the American Hospital Association (AHA), who felt that a comprehensive, all-inclusive national health care program was needed for Social Security participants. On the opposing side were the Republicans, the insurance industry, and the American Medical Association (AMA), the association that represents many physicians. In a compromise effort to gain support for a federal Medicare plan, physician services were carved out of the original Medicare proposal so that the federal plan primarily covered hospital care. This became Medicare Part A, or Hospital Insurance, the premium-free part of the program that is available to all Social Security beneficiaries.
Pro Tip: Want to learn more about Social Security? Visit our guide to Social Security for seniors.
FYI: Medicare and Medicaid were both signed into law in 1965, but they have significant eligibility and benefit differences. Head over to our senior guide to Medicare and Medicaid for the essential information.