Medicare, first signed into law in 1965, was created to provide health coverage to Americans ages 65 and over. When first introduced, Medicare included only parts A and B. Additional parts have since expanded coverage.
In 2024, Medicare is celebrating its 58th year of providing health insurance. The program was first signed into law in 1965 and began offering coverage in 1966.
That first year, 19 million Americans enrolled in Medicare for their healthcare coverage. As of 2023, more than 66 million Americans were enrolled in the program.
When Medicare first began, it included just Medicare Part A and Medicare Part B, and it covered only people ages 65 and over.
Over the years, additional parts — including Part C and Part D — have been added. Coverage has also been expanded to include people under age 65 who have certain disabilities and chronic conditions.
The idea of a national healthcare program originated more than 100 years ago — as far back as former President Teddy Roosevelt’s 1912 campaign.
A serious push for a program took hold in 1945 under former President Harry Truman. He called for a national healthcare plan during his term and presented the idea to Congress. However, his proposals didn’t make it through Congress at that time.
By the 1960s, the call for a national program was growing stronger. In 1961, former President John F. Kennedy created a task force on the issue. It recommended that a program be put in place for Americans ages 65 and older.
At the time, most Americans had no access to insurance after retiring. This left millions of people without coverage.
When did retirees start paying for Medicare?
In 1962, President Kennedy introduced a plan to create a healthcare program for older adults using their Social Security contributions, but it wasn’t approved by Congress.
In 1964, former President Lyndon Johnson called on Congress to create the program that is now Medicare. The program was signed into law in 1965.
In recognition of his dedication to a national healthcare plan during his own term, former President Truman and his wife, Bess, were the first people to receive Medicare cards after it was signed into law.
How much did Medicare cost in 1965?
When first introduced, Medicare had only two parts: Medicare Part A and Medicare Part B. That’s why you’ll often see those two parts referred to as Original Medicare today.
Parts A and B looked pretty similar to original Medicare as you may know it, although the costs have changed over time. Just like today, Medicare Part A was hospital insurance, and Medicare Part B was medical insurance.
Medicare has seen many changes over the past 5 decades. These changes have:
- expanded coverage options
- allowed more people to enroll in Medicare
- added protections for those Americans who use the program
Some of the major changes are discussed below.
The addition of coverage for people with disabilities in 1972
In 1972, former President Richard Nixon expanded Medicare coverage to include people with disabilities who receive Social Security Disability Insurance.
He also extended immediate coverage to people diagnosed with end-stage renal disease (ESRD). This expansion is still in effect today.
Medigap under federal regulation in 1980
Medigap, also known as Medicare supplement insurance, helps you pay the out-of-pocket costs of original Medicare, like copays and deductibles.
These plans are sold by private insurance companies. However. starting in 1980, the federal government began regulating them to ensure they meet certain standards.
The addition of hospice coverage in 1982
Hospice care for people with a terminal diagnosis wasn’t originally covered by Medicare. This coverage was added in 1982.
Hospice services are still offered today under Medicare Part A.
The introduction of reduced cost-sharing for lower-income Medicare enrollees in 1988
Before 1988, everyone paid the same amount for Medicare, regardless of income. Today, people with higher incomes might pay more, while people with lower incomes might pay less.
This change began in 1988 with the creation of programs to help lower-income enrollees pay for their Medicare premiums and other costs. Additional programs to help people pay for their Medicare coverage were added through the 1990s.
Some examples of these programs include the Extra Help program, which helps those with low-income pay for their medications, and four different Medicare savings programs to help pay for premiums and other Medicare expenses.
The introduction of Medigap plan standardization in 1990
There are currently 10 different Medigap plans available: A, B, C, D, F, G, K, L, M, and N. In 1980, coverage under each of these plans became standardized.
This means that no matter where you live or what company you purchase a plan from, you’ll be guaranteed the same basic coverage from each plan.
For example, Medigap Plan A in Boston offers the same basic coverage as Medigap Plan A in Seattle.
The introduction of Medicare Part C in 1997
Medicare Part C was introduced through the Balanced Budget Act of 1997, with coverage beginning in 1999. Medicare Part C plans, today sometimes called Medicare Advantage plans, are offered by private insurance companies that contract with Medicare.
Medicare Advantage plans work with a network of providers. Their coverage model is more similar to employer coverage than original Medicare.
These plans must offer at least the same coverage as original Medicare, and they often include additional coverage for services that Medicare doesn’t cover, such as dental, vision, and prescription drug costs.
The addition of Medicare Part D in 2003
The Medicare Modernization Act was signed into law in 2003 by former President George W. Bush. The law expanded Medicare and established a new part: Medicare Part D.
Part D is prescription drug coverage. Before Part D, Medicare didn’t include this coverage. Part D officially took effect in 2006.
The addition of free preventive services in 2010
In 2010, former President Barack Obama signed the Affordable Care Act into law. The law made numerous changes to healthcare in America, including some to Medicare.
The law added Medicare coverage for preventive care and health screenings and made these services free for Medicare enrollees. The law also reduced the out-of-pocket costs of using Medicare Part D.
Today, Medicare is a healthcare plan that millions of Americans rely on. It offers broader coverage than ever before. Enrollees can choose the parts of Medicare they wish to enroll in and create coverage that works for them and their budget.
Some costs have certainly risen since 1966, but this isn’t always true. For example, the Affordable Care Act reduced those costs by making preventive care free.
Even now, while the costs of original Medicare rose again for the 2021 plan year, the costs of Medicare Advantage plans are continuing to go down.
The cost for Medigap, Medicare Advantage, and Medicare Part D depends on the plan. Original Medicare costs for 2024 include:
- Medicare Part A premium: most people don’t pay a premium for Part A
- Medicare Part A deductible: $1,632 per benefit period
- Medicare Part B monthly premium: $174.70 per month
- Medicare Part B deductible: $240 per year
In addition to costs, there are a few examples of other big changes to Medicare in the last few years, including some upcoming changes:
- Part D coinsurance: As of 2024, the 5% coinsurance for catastrophic expenses in Medicare Part D will no longer apply. The coinsurance will only kick in once you reach your deductible of $8,000.
- Part D premium: To prevent insurers and manufacturers from burdening enrollees with more fees, the increase in annual Part D premiums will be limited to 6% between 2024 and 2029.
- Cost of insulin: Part D enrollees can get low cost insulin for $35 or less per month.
- Beginning in 2023, all vaccines recommended by the Advisory Committee on Immunization Practices (ACIP) were made available for free to Medicare enrollees.
- Telehealth: Additional coverage for telehealth as a result of the COVID-19 pandemic was added to reduce your cost for telehealth visits.
- ESRD coverage: People with ESRD gained access to more Medicare Advantage plan options. Previously, people with an ESRD diagnosis weren’t eligible for most Medicare Advantage plans.
Medicare has expanded several times since it was first signed into law in 1965.
Today, Medicare offers prescription drug plans and private Medicare Advantage plans to suit your needs and budget.
The costs of the various Medicare plans change every year. To find the most current costs and benefits, visit Medicare.gov.