Medicare at 60: Many Successes but More Work to Do

Medicare was enacted in 1965 and enrolled its first beneficiaries in 1966. Since then Medicare has provided access to health care for tens of millions of Americans aged 65 and older as well as to younger individuals with disabilities. To mark the program's 60th anniversary, it is fitting to review Medicare's many accomplishments, as well as its problems, and to highlight reforms that can extend and build on its legacy. Its problems mainly relate to the financing challenges the program poses for beneficiaries, taxpayers, and the federal budget as well as the approach that has led to significant overpayments to private Medicare Advantage plans that now enroll more than 50% of beneficiaries. This article reviews historical trends in Medicare enrollment and spending, payment innovations the program created, how traditional Medicare has outperformed commercial insurers in controlling health care spending, and sources of overpayments in Medicare Advantage. Finally, the article highlights potential ways to fix Medicare's problems and promote its sustainability for future generations.