This summer marks 60 years since the creation of Medicare, an indispensable program for older and disabled Americans. But the fight for government-sponsored healthcare began even earlier. After World War II, President Harry S Truman recognized the nation needed more doctors and better medical infrastructure to support a growing population. But his vision of a national health insurance program wasn’t realized due to political and social headwinds, and America would have to wait another 20 years for the government to provide health insurance on a national scale.
On July 30, 1965, President Lyndon B. Johnson made history when he signed the Medicare and Medicaid Act—landmark legislation that transformed American healthcare for generations to come. Medicare provided coverage for older adults, while Medicaid served low-income individuals. To honor Truman’s advocacy, President Johnson made him and his wife, Bess, the first-ever Medicare beneficiaries. Alongside them, 19 million Americans aged 65 and older gained access to hospitalization and medical insurance—ushering in a new era of financial and physical security.
Medicare is now a cornerstone of American healthcare covering more than 65 million Americans today. As we celebrate this milestone, let us take a moment to explore how we got here and what we can do to make sure Medicare is around for another 60 years to come.
The Path to Today’s Medicare
Medicare began as a fee-for-service program covering physician and hospital services. Over six decades, many changes in coverage, eligibility, and payment policy have been made. For example, Medicare underwent its first major reform in 1972, when Congress expanded the program to include individuals under 65 with long-term disabilities and those with end-stage renal disease. As national health spending surged—reaching $250.1 billion by 1980 (almost 10 times higher than $27.1 billion in 1960)—policymakers noticed the private sector’s ability to contain costs and began allowing private insurers to offer Health Maintenance Organization (HMO) plans to Medicare beneficiaries. HMOs were meant to create savings for the government through a managed care approach to health and a closed provider network.
By 1997, the success of private HMOs led to the creation of Medicare+Choice, the precursor to Medicare Advantage. This alternative to Traditional Medicare allowed beneficiaries to enroll in private health plans offering additional benefits like dental and vision care, while shifting financial risk from the government to private insurance companies.
As the new millennium approached, prescription drugs were playing an increasingly significant role in healthcare but were mostly not covered by Medicare, leaving beneficiaries unprotected from drug costs. A response came in 2003 when Congress passed the Medicare Prescription Drug, Improvement, and Modernization Act (MMA) establishing Medicare’s prescription drug benefit. This allowed private insurers to offer Medicare Advantage plans with drug coverage as well as standalone drug plans—giving beneficiaries the ability to pick the best coverage for their needs.
Improving Medicare for the Future
As we celebrate Medicare’s 60th anniversary, CareFirst BlueCross BlueShield (CareFirst) plays a vital role in ensuring continued access to high-quality care. Since launching our Medicare Advantage products in 2021, we’ve leveraged our 88 years of industry experience to design affordable, benefit-rich plans for nearly 29,000 members through individual and group Medicare coverage across Maryland and Washington, D.C.
To improve Medicare and promote its sustainability, policymakers must look for ways to reduce healthcare spending while preserving access to advanced, equitable care. CareFirst’s Medicare Advantage plans offer no monthly premiums, lower cost-sharing and capped out-of-pocket expenses—providing a strong alternative to Traditional Medicare.
We know prescription drugs are a significant driver of increased costs and continue to advocate for lower prices. One way to do this would be through expanding the Medicare Drug Price Negotiation Program. Established by the Inflation Reduction Act in 2021, this program allows the government to negotiate prices for certain expensive Medicare drugs every year, with the first set of lower prices taking effect in 2026. We encourage policymakers to expand this list to include even more medications—lowering costs for patients and reducing federal spending.
CareFirst champions policies that incentivize care coordination and empower members through care managers. We also address health-related social needs and support members’ total wellness by proudly offering supplemental benefits like dental, vision, hearing, fitness perks and more.
Looking Ahead
As the Medicare program continues to evolve, we celebrate its legacy and reaffirm our commitment to improving the program for generations to come. We’re grateful for the peace of mind it brings to our families and communities—and we’re proud to be part of its future.
Stop by next month to learn about the dynamic history of the Medicaid program as we celebrate some of the program’s greatest moments and contemplate the road ahead.