The PDF in which this article appears can be found in Bifocal Vol. 46 Issue 5.
June 24, 2025
Happy Birthday Medicare
By Alexandra Glezer/Intern, ABA Commission on Law and Aging
As Medicare will mark its 60th anniversary this July, COLA is taking a look back at how it all began, what it covers today, and what lies ahead for this vital program.
What is Medicare?
In response to the growing gap in health coverage for older adults and individuals with limited incomes, President Lyndon B. Johnson signed the Social Security Amendments of 1965 into law (Social Security Administration, n.d.). These amendments created Medicare, a federal health insurance program for people aged 65 and older, and Medicaid, a jointly-funded federal-state program providing coverage for those with limited incomes (National Archives, 2022).
Prior to Medicare, health insurance was largely tied to employment or purchased through the private market, options that often excluded older adults (Lankford, 2023). As people aged, their health needs increased while their incomes typically declined, making private insurance unaffordable for many (Social Security Administration, n.d.). By the mid-1960s, barely half of the adults aged 65 and over maintained some form of health insurance, and among those insured, few had any coverage for surgical and out-of-hospital physician costs (Social Security Administration, n.d.). Additionally, many private insurers routinely dropped their older, higher-risk policyholders (Social Security Administration, n.d.). While there had been federal-state programs of medical assistance to older adults prior to the 1965 amendments, most proved unsuccessful due to restrictive eligibility requirements and limited scope of coverage (Social Security Administration, n.d.).
At the time of its enactment, Medicare was composed of two parts: Hospital Insurance (Part A) and Supplementary Medical Insurance (Part B) (Klees et al., 2012). Part A covers inpatient hospital visits, home health agencies, skilled nursing facilities, and hospice care and is devoid of premiums to those eligible; those who are interested in Part A yet ineligible for it have the option to pay a monthly premium (Klees et al., 2012). Part B provides coverage for physician visits, outpatient hospital visits, home health agencies, and more. Unlike Part A, Part B requires that eligible individuals pay a monthly premium (Klees et al., 2012).
Since then, Medicare has greatly expanded in scope. Through the Balanced Budget Act of 1997, the Medicare Advantage program (Part C), formerly known as Medicare+Choice, was established (Klees et al., 2012). Part C allowed beneficiaries to enroll in private-sector health plans, offering more choice in how they received their coverage (Klees et al., 2012). By emphasizing managed care and bundled services, Part C also aimed to reduce overall Medicare spending through lower premiums and out-of-pocket costs (McGuire et al., 2011). In 2003, the Medicare Prescription Drug, Improvement, and Modernization Act (MMA) established Part D, a fourth installment to Medicare (Klees et al., 2012). Today, Part D provides voluntary, subsidized prescription drug coverage to all beneficiaries, with additional premium and cost-sharing assistance for low-income enrollees (Klees et al., 2012). When Medicare began on July 1, 1966, approximately 19 million people were enrolled (Klees et al., 2012). Today, Medicare has nearly 68.5 million enrollees, with 90.1% being adults ages 65 and over (Centers for Medicare & Medicaid Services, 2025).
The Rising Demand for In-Home Services
While Medicare has broadened its coverage over time, questions remain about its ability to meet the evolving needs of people as they age. One major shift since the foundation of Medicare is the availability of and preference for in-home services and care. In 2024, the US home care market was estimated to be $286 million, with the demand for in-home care projected to grow by 22% in the next ten years (Respiratory Therapy, 2024). This surge coincides with significant demographic shifts: by 2029, an estimated 71.4 million Americans will be aged 65 or older, and roughly 70% of them are expected to require some form of long-term care during their lifetime (Slatton, 2025). Together, these trends are placing immense pressure on the home care sector, raising important questions about whether Medicare, in its current form, can adequately support the growing demand for accessible, high-quality in-home services.
Currently, Medicare covers select home health services under Parts A and B, including medically necessary part-time or intermittent skilled nursing care; physical, occupational, or speech-language therapy; medical social services; home health aide support; injectable osteoporosis drugs for eligible women; and certain durable medical equipment and supplies (Medicare, n.d.). However, Medicare does not cover 24-hour in-home care, meal delivery, or services such as shopping and cleaning that are not tied to a care plan (Medicare, n.d.). It also excludes custodial or personal care, such as help with bathing, dressing, or using the bathroom, when this is the only type of assistance needed (Medicare, n.d.). These limitations leave many eligible older adults without access to the consistent, in-home care they need (Center for Medicare Advocacy, 2016).
The Future of Medicare
To better support the aging US population and its evolving health needs, Medicare has begun taking meaningful steps toward more holistic and person-centered care (Seshamani et al., 2025). Recent reforms have been aimed at addressing long-standing gaps by expanding coverage beyond traditional clinical services. For instance, Medicare now supports enhanced primary care models that provide 24/7 access to care teams, care coordination, and preventive services, which are crucial for ensuring older adults stay healthy and avoid unnecessary hospitalizations (Seshamani et al., 2025). Medicare has begun covering community-based services like helping food-insecure individuals, training for family caregivers, and assistance for those with serious illness in finding appropriate care (Seshamani et al., 2025). Behavioral and oral health access is also being expanded through coverage of telehealth, digital mental health tools, and dental care tied to serious medical needs, helping older adults manage their health more effectively from the comfort of their home (Seshamani et al., 2025).
Medicare is also striving to ensure more transparent and equitable financing across both Traditional Medicare (Parts A and B) and Medicare Advantage (Part C) (Johnson et al., 2024). A key initiative, titled Medicare 2.0, advocates for unified benefit structures, simplified cost sharing, and standardized supplemental benefits across both tracks (Johnson et al., 2024). The proposal includes capping out-of-pocket expenses, eliminating confusing gaps between Parts A, B, and D, and introducing a consistent, comprehensive benefit list for Medicare Advantage plans (Johnson et al., 2024). Medicare 2.0 would also tie reforms to ending overpayments to Medicare Advantage, estimated at tens of billions annually, and redirect those funds to reinforce broader coverage enhancements, including long-term services and supports for older adults (Johnson et al., 2024).
Moreover, Medicare 2.0 emphasizes the need for clearer communications and stronger financial accountability in both Traditional Medicare and Advantage programs (Seshamani et al., 2025). As part of a stronger Medicare program vision, there is a push for better tools that allow beneficiaries to compare plans easily, understand provider networks, and anticipate actual out-of-pocket costs (Seshamani et al., 2025). This push for transparency extends to ensuring that new benefits for durable medical equipment, home and community-based services, behavioral health, and others are spelled out clearly (Seshamani et al., 2025). The goal is twofold: protect older adults from unexpected medical expense burdens and empower them to choose coverage that best meets their evolving needs (Seshamani et al., 2025).
As it celebrates its 60th anniversary, Medicare remains one of the most impactful public health programs in American history. Yet, as the population ages and more people prefer personalized, in-home care, Medicare faces a critical turning point. Its traditional structure still leaves out many essential non-medical supports, such as help with daily activities and round-the-clock care at home. Nevertheless, new reforms such as Medicare 2.0, enhanced primary care, expanded behavioral and oral health coverage are laying the foundation for a system that is more person-centered, transparent, and financially sustainable. As care moves further into homes and communities, Medicare must continue to evolve. In doing so, it can continue to protect the health and dignity of older Americans for generations to come.