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 Home > News & Policies > July 2001

21st Century Medicare

"When Medicare was passed in 1965, President Lyndon Johnson said: ‘No longer will older Americans be denied the healing miracle of modern medicine. No longer will illness crush and destroy the savings that they have so carefully put away over a lifetime.’ Thirty-six years later, it is time for our Nation to come together and renew that commitment."

-- President George W. Bush

Medicare today provides health insurance to nearly 40 million people aged 65 and over as well as to people with long-term disabilities. For 36 years, Medicare has been immensely successful in fulfilling President Johnson’s vision of helping seniors achieve the promise of a secure, vigorous retirement. Medicare has given over 90 million seniors access to many of the advances of modern medicine, which have helped them live longer and healthier lives. Medicare has also helped protect seniors from the higher costs of advanced care. But as we enter the 21st century, Medicare’s promise is threatened by:

  • outdated benefits that do not cover many valuable new technologies, including prescription drugs;
  • limited financial protection for Medicare’s covered services, forcing seniors to choose between increasingly costly supplemental insurance or the risk of impoverishment;
  • a Medicare+Choice system that has not delivered the reliable health insurance options that have long been available to all Federal employees and many most Americans under 65;
  • a traditional government plan that often does not provide innovative care and that under current law cannot manage its benefits in an efficient way;
  • a bureaucracy that often fails to deliver responsive services to beneficiaries and imposes unnecessary burdens on providers, because of excessively complex regulations and misdirected resources; and
  • a Medicare program that often is not able to help seniors get find the high-quality, error-free care they need or help health care providers deliver better care.

If we do not take steps to improve Medicare now, Medicare it may be unable to deliver on its promise of a secure and healthy retirement for today’s and or tomorrow’s seniors:

  • Based on its past record, Medicare’s current benefits will have even more difficulty keeping up with the accelerating pace of medical innovation, including: individualized cures based on an understanding of each person’s genetic and the biochemical causes of a disease, microscopic devices that eliminate the need for unpleasant invasive treatments, and Internet-based and robotic therapies. All these innovations represent new classes of "medicalprovider services."
  • Even Medicare’s current benefits are not secure. Medicare’s Part A (Hospital Insurance) payroll costs will exceed its tax revenue taxes will be unable to cover the costs of its benefits after 2016, and Medicare’s Part B (Supplementary Medical Insurance) Trust Fund is set up in a way that discourages planning ahead.

Failing to act to meet these unavoidable challenges may lead to more extreme changes later, including government controls on prescription drugs and stricter coverage limits in Medicare. These changes would reduce access to needed treatments and slow the development of new technologies, such as promising new drugs for Alzheimer’s disease and common cancers. We must come together now to take the sound, careful, and deliberate steps needed to improve the Medicare program for today’s and tomorrow’s beneficiariesseniors. Thirty-six years from now, we should still have a Medicare program that fulfills President Johnson’s promise of a secure and vibrant retirement.