Medicare at 61: A History of Expanding Care

Sixty-one years ago this month, Medicare and Medicaid became law. In the decades since, the programs have changed and expanded to meet the health care needs of the population, reflect advancements in medical innovations, and advance accessibility. Today, more than 70 million people are enrolled in Medicare.

1965: Medicare and Medicaid Act (Social Security Amendments of 1965)

Medicare and Medicaid were many years in the making. Decades before, discussions around New Deal policies included the goal of establishing a national health care system. The Social Security pension program passed first in 1935, and thirty years later, Medicare and Medicaid followed.

Medicare and Medicaid were many years in the making.

The original legislation included Part A (hospital insurance) and Part B (medical insurance), available to individuals age 65 and over. In the first year of the program, over 19 million people enrolled in Medicare.

1972: Eligibility Expansions

Additional amendments to Social Security legislation in 1972 expanded Medicare eligibility to people with end-stage renal disease or long-term disabilities, regardless of age. Older adults and people with disabilities remain the core Medicare population to this day.

1980: Home Health Benefit Expansion

The Omnibus Reconciliation Act of 1980 expanded the coverage of home health care under Medicare, eliminating several limitations on eligibility and care frequency that had previously restricted coverage. However, home health coverage under Medicare remains narrow—only specific types of care are covered, and the criteria are stricter than Medicaid’s Home- and Community-Based Services benefit.

Home health coverage under Medicare remains narrow.

1997: Medicare Advantage (Part C)

Medicare Advantage (MA), a coverage option offered by private insurance plans, became part of the Medicare program with the passage of the Balanced Budget Act of 1997. The law restructured plan payment and aimed to give beneficiaries greater choice over their care. However, the rapid growth of MA plans—as of 2024, a majority of Medicare beneficiaries are enrolled in MA—and policies that allow overpayment and underregulation have made MA more unsustainable.

2003: Prescription Drug (Part D)

Medicare added a prescription drug benefit (Part D) in 2003. Beneficiaries in Original Medicare can enroll in additional, standalone Part D plans, and prescription drug coverage is included with most Medicare Advantage plans. Today, over 80% of Medicare beneficiaries have Part D coverage.

2010: Affordable Care Act (ACA)

The Affordable Care Act created a federal Marketplace of health insurance and helped states expand Medicaid eligibility to a broader population. For Medicare beneficiaries, the law helped close Part D coverage gaps, improved coverage for preventive care under Original Medicare, and began to address overpayment issues in Medicare Advantage.

2022: Prescription Drug Affordability Reforms

The Inflation Reduction Act of 2022 included several key changes that made prescription drug coverage more affordable for Medicare beneficiaries. The law added an out-of-pocket cap on Part D cost sharing and instituted a price negotiation program for drugs with high Medicare spending, lowering prices for many popular drugs. Another provision of the law expanded eligibility for the Part D Low-Income Subsidy, or Extra Help, eliminating cost sharing for about 300,000 additional people nationwide.

There is still a long way to go to ensure Medicare provides affordable, accessible, and comprehensive care to all its beneficiaries.

There is still a long way to go to ensure Medicare provides affordable, accessible, and comprehensive care to all its beneficiaries. Recent policy changes—including narrowing Inflation Reduction Act measures, eliminating Affordable Care Act tax subsidies, and further restricting eligibility based on immigration status—have instead moved the programs in the opposite direction, taking coverage away from many. The Medicare Rights Center urges lawmakers to protect Medicare as well as current and future beneficiaries by supporting policies that expand access to coverage and cost assistance.