Social Security Act Amendments of 1965 (Medicare/Medicaid)
What happened then?
On July 30, 1965, President Lyndon Johnson signed the Social Security Act Amendments of 1965 into law, creating Medicare and Medicaid. Medicare provides health insurance for people age 65 and older along with individuals with certain disabilities, while Medicaid is a joint federal-state program that provides health coverage for low-income individuals.
Together, Medicare and Medicaid provide health care benefits to millions of the most vulnerable individuals in the nation: seniors, the poor, and the severely disabled. The two programs have helped to successfully reduce the poverty rate among older Americans from 28.5% in 1966 to 9% today and relieve the economic burdens of millions of low-income families.
What’s happening now?
As the baby boom generation ages, the U.S. population will go through an acute demographic shift. In only 15 years, older Americans will account for about 20% of the population—up from 13% today. By 2050, the population of Americans age 65 and older will double to over 80 million people. About 71% of adults age 85 and older will have a disability and will need assistance with daily living. Although Medicare and Medicaid have helped countless Americans and their families to be independent and financially secure, it is clear that an aging population poses significant challenges to the federal government’s commitment to ensure that all Americans live with economic security and dignity.
Despite the programs’ undeniable success, the House Republican budget plan ends Medicare as we know it and increases costs for seniors and people with disabilities by establishing a Medicare voucher program. The nonpartisan Congressional Budget Office found that if a voucher plan similar to the Republican proposal was implemented, the average Part B premium charged in 2020 across the country for the traditional Medicare option would be 50% higher than under current law. Similarly, the House Republican budget would cut Medicaid by $900 billion over 10 years by allowing states to cut benefits.
What needs to happen moving forward?
We cannot solve our nation’s long-term fiscal challenges and the growing costs of health care by simply unloading those costs and financial risks onto the elderly, the poor, and disabled individuals. We need to keep Medicare and Medicaid strong by reducing cost growth within the health system, while protecting and expanding essential benefits and protections. The Affordable Care Act includes numerous cost-containment tools and has contributed to record-low rates of health care spending growth. Congress should build on that progress and implement reforms to reward quality rather than quantity and explore solutions in long-term care.
For more information, please visit: https://democrats-energycommerce.house.gov/about-ec/issues/health