HEALTH INSURANCE FOR THE AGED ACT (MEDICARE) 79 Stat. 286 (1965)

The 1965 amendment of the social security act establishing a system of health insurance operated by the Social Security Administration culminated thirty years of controversy over the proper role of the federal government in relation to medical care. Medicare provided hospital insurance and a variety of medical benefits for citizens sixty-five years or older. The act was designed to meet the serious problem of providing care for those who faced old age fearful of the financial ravages of illness.

Medicare's two insurance programs operated differently. The Hospital Benefit program automatically covered anyone over sixty-five with no "needs" test. It paid for hospitalization, nursing home care, home visits, and diagnostic services. It was financed by compulsory contributions from the protected persons and their employers and provided benefits as a matter of entitlement. The Supplementary Medical Insurance section created a voluntary individual program subsidized and administered by the government, using private insurance companies to assist in its administration.

Medicare influenced the entire pattern of medical care in the United States. With government financing a growing share of total health care expenditures, its power and role within the American health care system expanded proportionately. Not only administrators but also doctors and nurses adjusted their conduct to comply with newly mandated rules and procedures.

Paul L. Murphy
(1986)

Bibliography

Feder, Judith 1977 Medicare: The Politics of Federal Hospital Insurance. Lexington, Mass.: Lexington Books.