By Maura Collinsgru
This Friday is the 56th anniversary of Medicare and Medicaid. For over half a century these programs have provided essential health care and helped keep exorbitant medical costs at bay for seniors and low-income Americans. Yet today Americans of all ages are struggling to afford health care as costs continue to rise, with no sign of stopping. As we reflect on the history and success of Medicare and Medicaid, we must recognize these programs can and need to be improved and expanded to ensure access to and stem the tide of rising health care costs for all Americans.
This week Congressional Democrats are expected to release their next reconciliation bill, and it is imperative they include measures to allow Medicare to negotiate directly with pharmaceutical companies for lower drug prices and to close the coverage gap in the 12 remaining states that have failed to expand Medicaid. We cannot afford to squander this opportunity to do the right thing. Closing the coverage gap will help low-income families, reduce racial inequities in health care, reduce mortality and improve health outcomes. Medicare drug price negotiations would save billions of dollars for taxpayers, employers and the government.
Before Medicare, in the early 1960s, half of all senior citizens did not have health insurance coverage. According to National Health Statistics Reports, 54% of seniors at the time had hospital coverage and only 46% were covered for surgery. Census reports put elderly poverty levels at the time at a staggering 30%-35%. In 1965, Medicare was founded (along with Medicaid), and combined with increases to Social Security benefits. Today all seniors have coverage and elderly poverty has been cut by 75%.
Medicare and Medicaid were needed to alleviate the financial burden of unreasonably high health insurance rates for seniors and low-income Americans. Today, 1 in 3 Americans can access health care through these programs, 3.6 million people in New Jersey alone. Nevertheless, millions are in similarly dire straits that seniors were in the early 1960s. In the past 10 years, medical debt has become the largest source of debt held by Americans sent to collection agencies.
In other words, the cost of health care is an unparalleled cause of financial ruin in this country. This statistic does not even capture the full picture — it does not include credit card debt from medical costs, or increasingly common lawsuits that hospitals file against patients to collect a debt. The American public is being driven to poverty by the cost of staying alive and healthy in this country.
Perhaps, the best and most egregious illustration of the financial challenges of health care is the rising cost of pharmaceuticals. People of all ages and backgrounds rely on prescription drugs for their day-to-day wellbeing, often for chronic conditions that need treatment for the rest of their lives. Yet that does not stop prices from marching inexorably upward.
The cost of asthma inhalers, for instance, rose by 35% – around $280 to more than $380 – from 2013 to 2018. A one-month supply of insulin went from $20 in 1996 to $275 in 2019, a 1,200% increase. Asthma and diabetes are two of the most common chronic conditions, affecting tens of millions of Americans. Just in 2020 and the beginning of 2021, even as the pandemic raged, prescription drug prices overall rose by 5%. Public opinion is clear and bipartisan – 79% say the cost of prescription drugs is unreasonable.
By allowing Medicare to negotiate prescription drug prices directly, American consumers would have a powerful voice for their interests to keep the profit-driven pharmaceutical companies in check. Government-negotiated lower prices would also apply beyond Medicare, so Americans with employer-sponsored or other private insurance would similarly benefit. It would also ensure Americans must no longer pay two to six times what patients are charged in other developed countries.
Meanwhile, closing the Medicaid gap once and for all would bring coverage to millions of low-income Americans whose current options are only financial ruin or sickness. There is much work to be done to make our health care system more financially sustainable and less exploitative, but making these long-overdue expansions to Medicare and Medicaid as part of the “Build Back Better” reconciliation bill is a practical, cost-effective, and humane solution to meaningfully increase access to health care. The American people need this lifeline. To not include it would be a tragedy.
Maura Collinsgru is the health care program director for New Jersey Citizen Action.
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