History of Social Security and Medicare
Before 1935, America did not have a national retirement system. But after the Great Depression, the United States government saw the need to create a federal retirement system designed to provide basic financial security for three groups:
- 1934 – the average life expectancy was 60 for a male and 64 for a female, but that average was misleading because of high infant mortality; in fact, 54% of 21-year-old men could expect to live to 65, and 65-year-old men could expect to live to 78
- 1935 – the only claiming age was 65 years old
- 1937 to 1939 – one-time lump sum payments were the only payment option
- 1940 – first monthly retirement check mailed out
- 1940 – Ida May Fuller began collecting Social Security at age 65
- 1975 – Ida died at age 100
- Folks with disabilities
- Family members of a wage earner who has died
Ida May Fuller
The Social Security website tells a great story about Ida May Fuller that illustrates the history of how Social Security benefits increased. Let’s take a look.
1940 – First checks sent out.
- Ida received $22.54 per month
1950 – First benefit increase enacted by Congress.
- 77% increase
- After 10 years at $22.54 a month, Ida began receiving $41.30 in October 1950
1952 – Second increase of 12.50% goes into effect.
All subsequent increases were by special legislation until 1975.
1975 – Automatic annual increases go into effect.
- Increase is meant to cover annual cost of living increase
- No longer does inflation erode Social Security benefits
2018 – Cost of living adjustment = 2.8% effective for payments starting January 2019.
Medicare – A National Health Insurance Fund
The history of Medicare goes back to President Teddy Roosevelt. In 1912, his presidential campaign included a national health insurance plan. The idea of a national health plan didn’t gain steam until 1945, when President Harry S. Truman championed it. He wanted national health insurance for all Americans and fought to pass a bill but was unsuccessful. It took another 20 years before Medicare became a reality.
John F. Kennedy – Medicare Push
After studies showed that 56% of Americans over the age of 65 were not covered by health insurance, JFK made an unsuccessful push for a national healthcare plan. But it wasn’t until after legislation was signed by President Lyndon B. Johnson in 1965 that Americans began receiving Medicare health coverage.
Medicare and Social Security Coverage
Have questions about your Medicare and Social Security coverage? If so, we can help. Use our FMF365 Social Security Analyzer to learn about your benefits and eligibility.