On July 30, 1965, President Lyndon B. Johnson signed into law the bill that led to Medicare and Medicaid. The original Medicare program included Part A (Hospital Insurance) and Part B (Medical Insurance).
What was life like for seniors before Medicare? In 1962, nearly half of everyone over the age of 65 had no private health insurance; a Blue Cross “State 65” insurance plan cost $600 per year, or approximately 25% of an average senior’s annual income. More than 25% of all seniors went without medical care because of the cost; between 9% and 16% of seniors went to charitable organizations to get their medical costs paid. Today, 99.9% of all Americans over the age of 65 have health insurance through Medicare, and the vast majority pays $0 in Medicare premiums. In 1962, the private insurance plans had limited coverage: they paid 50% or less of the hospital costs, and did not cover lab work, x-rays, etc. A policy to cover surgery required additional premiums. Today, Medicare pays 80% of all these costs.