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Medicare by the Numbers: Major Changes Since 1965

By: 
PFM

Medicare by the Numbers is a new series by the Partnership for the Future of Medicare covering key trends in the program.

A lot has changed in the past 50 years. When Medicare was created in 1965, stamps cost 5 cents, the U.S. troops arrived in Vietnam, and the Beatles hit the top 10 charts. Since then, the U.S. population has increased by 125 million;[1] even today’s average home price is 14 times[2] more expensive.

1965 would almost be unrecognizable today. Yet as we enter 2015, traditional Medicare remains stuck in the past, unable to meet the needs of today’s beneficiaries:

  • Over 44 million Americans are currently over age 65,[3] more than double the 15 million counted in 1965.[4]
  • And today, most Americans live 78.9 years.[5] In 1965, the average lifespan was 70.2 years.[6]
  • At present, 54 million beneficiaries are enrolled in Medicare.[7] In its first year, Medicare had just 19 million beneficiaries.[8]
  • Today’s beneficiaries can expect to pay $1,216 for Part A[9] and $147 for Part B[10] per year. The program’s first beneficiaries only paid $40 for Part A[11] and $3 for Part B[12] annually.
  • Additionally, Medicare cost just $3 billion[13] in its first year. Today, Medicare costs $603 billion[14] per year, and spending is projected to exceed $1 trillion by 2023.[15]

Medicare continues on an unsustainable path. 76 million additional baby boomers will reach age 65 by 2030[16] – the program’s date of insolvency.[17]

Medicare must restructure the way care is delivered and doctors are paid. Times have changed since 1965 and so have beneficiary needs. Preserving Medicare for future generations requires a sustainable solution. To learn about our path forward, check out our principles for successful reform.


[1] http://www.census.gov/popclock/

[2] http://www.census.gov/const/uspriceann.pdf

[3]http://factfinder2.census.gov/faces/tableservices/jsf/pages/productview.xhtml?pid=ACS_13_1YR_CP05&prodType=table

[4] http://www.agingstats.gov/Main_Site/Data/2006_Documents/Population.pdf

[5] http://kff.org/other/state-indicator/life-expectancy-by-re/

[6] http://thomas.loc.gov/medicare/eligib.htm

[7] http://kff.org/medicare/fact-sheet/medicare-at-a-glance-fact-sheet/

[8] http://kff.org/medicare/slide/medicare-enrollment-1966-2013/

[9] http://www.medicare.gov/Pubs/pdf/11579.pdf

[10] http://www.medicare.gov/Pubs/pdf/11579.pdf

[11] http://www.gpo.gov/fdsys/pkg/GPO-CPRT-105WPRT37945/html/GPO-CPRT-105WPRT37945-2-2.htm

[12] http://thomas.loc.gov/medicare/history.htm

[13] https://oig.hhs.gov/oei/reports/oei-09-00-00200.pdf

[14] https://www.cbo.gov/sites/default/files/45653-OutlookUpdate_2014_Aug.pdf

[15] http://www.cbo.gov/sites/default/files/cbofiles/attachments/44172-Baseline2.pdf

[16] http://www.gao.gov/new.items/d02544t.pdf

[17] http://www.cms.gov/Research-Statistics-Data-and-Systems/Statistics-Trends-and-Reports/ReportsTrustFunds/Downloads/TR2014.pdf

 

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Date: 
Monday, November 17, 2014