Peddled as a means of saving old people too poor to afford medical coverage in their declining years, Medicare is more of a creation of America's weird tax code, which rewarded offering health insurance as a benefit to current employees, often unavailable to those who move on to new jobs or retirement. Since then, it has largely displaced private alternatives even as it consumes an ever larger share of the federal budget—and of GDP. As it is, the program is unsustainable and is a good target for the Department of Government Efficiency (DOGE) and Congress to consider for replacement by alternatives that offer lower costs, more freedom, and better care.
A Program Born From the Tax Code
Before Medicare was introduced in 1965, about 70 percent of Americans had health insurance, mostly provided as a benefit by employers. That arrangement emerged because "employer-provided health insurance benefits were not subject to federal income taxation," as noted by Michael A. Morrissey in Health Insurance. Workers effectively paid lower taxes by taking part of their compensation in health benefits rather than holding out for a higher salary and paying for standalone medical coverage.
