An Overview of Medicare in the U.S.
Social insurance originated in the United States early in the twentieth century in the form of workers' compensation to protect employees injured on the job. After the stock market crash of 1929, the need for federally endorsed government protection from bankruptcy became obvious. The Social Security Act was signed into law by President Franklin D. Roosevelt on August 14, 1935. It began as a system based on government collections from workers' paychecks. Funds taken in the form of taxes from each paycheck were deposited into the federal Social Security Trust Fund, which workers were able to access after retirement as pensions. Americans felt supported by this financial protection, and as there were consistently more workers than retirees, no risk of debt in the Social Security Trust Fund existed. The system remains primarily unchanged.
In 1962, President John F. Kennedy envisioned reforms to Social Security, specifically provisions entitling the elderly to health insurance. Neither Congress nor the medical industry approved of a plan that would reform medical care and create large Social Security expenditures. After Kennedy's assassination in 1963, Lyndon B. Johnson, his successor, continued to push for Kennedy's health care bill, and in the wake of the popular president's death, along with the Civil Rights and Economic Opportunity Acts of 1964, it passed. In 1965, health insurance for the elderly and unemployed became a reality, and Medicare was born.
Basic Concepts and Definitions Related to Medicare
Baby Boomers: A term applied to the generation born between 1946 and 1964. The largest generation of the twentieth century, the oldest Baby Boomers are starting to retire.
Deductible: A specified amount of a total insurance claim that is paid by the insured rather than the insurer.
Medicaid: A government-funded program that provides the unemployed or individuals living below the poverty line with insurance to receive medications that they would otherwise be unable to afford. Medicaid became law at the same time as Medicare , but it is a separate program.
Medicare: A government-funded program that provides health care coverage for the elderly. Recipients of Medicare are people aged sixty-five and older who pay premiums to enroll in the program, and as a result, receive insurance for doctor's visits, hospital stays, and post-hospital care.
Premium: A specified amount of money that an insured individual will pay per month or year to enroll in an insurance plan.
Social Security: A government-funded pension program that workers pay into with each paycheck, and receive benefits from after they retire. Retirees at age sixty-two receive 75 percent of their maximum pensions, and retirees at age sixty-seven and older receive 100 percent.