There’s an important lesson for today’s politicians in the genesis of Medicare, one of the nation’s landmark social programs, which was created July 30, 1965 — 50 years ago this week. It’s that government can do big things and succeed in massive projects if officials stick to their guns, offer effective leadership, nurture public support and take advantage immediately when the public mood shifts in their direction.
Medicare — the government’s program providing health insurance for the elderly — and Medicaid — which offers assistance to the poor — has become part of the fabric of American life. According to the U.S. News & World Report Health Care Index, the government now dominates the health care industry, and Medicaid continues to expand under the Affordable Care Act. Medicare has become a benchmark for measuring outcomes, and has given millions of older Americans access to doctors, hospitals and, in a relatively recent addition to its menu of benefits, prescription drugs. But the story goes back eight decades.
As Princeton historian Julian Zelizer has pointed out in The New Yorker: “We have a tendency to forget the history of laws that extended the obligations and commitments of the federal government. But the passage of Medicare and Medicaid, which shattered the barriers that had separated the federal government and the health-care system, was no less contentious than the recent debates about the Affordable Care Act,” also known as Obamacare.
During the 1930s, Democratic President Franklin D. Roosevelt did not add health-care coverage to the plan creating Social Security, which guaranteed an income to retired workers. Roosevelt believed the health care idea would be strongly opposed in Congress and pushing it would jeopardize other parts of his New Deal.
But President Harry Truman, Roosevelt’s Democratic successor, went ahead and proposed national health insurance for all Americans in 1945 and again in 1949. As Roosevelt predicted, Truman encountered virulent opposition, with the American Medical Association calling his plan “unAmerican” and socialized medicine. Truman’s proposals died.
During the administration of Republican President Dwight Eisenhower in the 1950s, the Medicare issue stayed largely dormant. Ike wasn’t interested in a big expansion of government into health care, although he maintained Social Security and other popular parts of the New Deal because they were so popular and valuable to everyday people.
Gradually, momentum began to build to provide health care coverage for people 65 and older.
Government studies found that older Americans needed twice as much hospital care as those under age 65; most couldn’t afford a hospital stay and medical costs were rising, adding to the plight of the elderly.
By the late 1950s, younger Democratic liberals in Congress, including Rep. Richard Bolling of Missouri and Sen. Hubert Humphrey of Minnesota, were working to drum up support for Medicare. Organized labor, then a very powerful force, also endorsed Medicare. And during the 1960 presidential campaign, Democratic nominee John F. Kennedy announced his support for Medicare to outmaneuver Republican candidate Richard Nixon.
Kennedy made the case forcefully, arguing that the new program was needed in “every city and town, every hospital and clinic, every neighborhood and rest home in America — wherever our older citizens live out their lives in want and despair under the shadow of illness.” When the Massachusetts senator won, it became part of his agenda.
But the AMA and its allies — Republicans and conservative Democrats in Congress — again organized a wave of opposition as they had done in Truman’s time. One of the most important foes of Medicare on Capitol Hill was Rep. Wilbur Mills, D-Ark., chairman of the Ways and Means Committee and a fiscal conservative. He blocked the plan in his committee.
After Kennedy’s assassination in November 1963, Lyndon B. Johnson became president by succession. As former Senate majority leader, LBJ was a master legislator but even he was initially unable to push Medicare to fruition.
What made the difference was the election of 1964, when Johnson was elected president over Republican Barry Goldwater in a landslide, 61 percent to 39 percent, and his fellow Democrats surged to overwhelming majorities in Congress, winning 295 seats in the 435-member House and 68 in the 100-member Senate.
Chairman Mills acknowledged the political shift and became more amenable to Medicare. He was heavily pressured by LBJ and concluded that newly ascendant liberals would roll over him and pass the measure even if he remained opposed to it. So he decided to work with them rather than against them, shape the legislation and claim at least part of the credit for passage, according to historian Zelizer.
The final administration measure included a voluntary national program to pay doctors’ costs financed by federal revenue and contributions from beneficiaries, hospital insurance financed by Social Security taxes and medical coverage for the poor called Medicaid, with Medicaid benefits varying from state to state.
The House passed the bill 313-115 on April 8, 1965. The Senate passed another version 68-21 on July 9.
After Congress reconciled the House and Senate measures, President Johnson signed Medicare into law on July 30 in Independence, Missouri, the hometown of former President Truman, the earlier champion of the idea, who attended the ceremony.
“The ultimate significance of what happened in 1965 is that it gave government the major role in overseeing the health-care system, now nearly a fifth of the economy,” writes economist Robert Samuelson in the Washington Post.
The program became so popular that President George W. Bush, a self-described conservative, embraced a change to add a prescription drug benefit to Medicare, and millions of Americans have come to rely on it. The drug benefit was enacted in 2003 and went into effect in 2006.
Today, Medicare is being questioned again in some quarters. Conservative critics have resurrected the charge that there is too much of a role for the federal government, and they say costs are getting out of hand.
Republican presidential candidate Jeb Bush, the former governor of Florida and a front runner for the GOP presidential nomination, says he wants to phase out Medicare. He would replace it with a system in which people obtain government funds and use them to find health insurance in the private marketplace. But Bush makes clear that elderly Americans who currently have Medicare won’t lose any coverage. Only the elderly in the future would be affected, Bush says. His guarantee that current benefits won’t end shows the importance of Medicare in the lives of everyday people.
A new report in the Journal of the American Medical Association indicates the success of Medicare. Older Americans on Medicare are spending less time in the hospital, with an estimated 3.5 million fewer hospitalizations in 2013 than in 1999, and beneficiaries are living longer. The average cost of a hospital stay dropped during 15 years from $3,290 to $2,801 in inflation-adjusted dollars for patients in the traditional Medicare program, according to an NPR summary of the AMA report.
The Congressional Budget Office projects that Medicare spending will increase from 3 percent of GDP in 2014 to 4.7 percent by 2040, the Kaiser Family Foundation reports, which defenders of the program say is manageable with some reforms.
The issue of health care remains volatile, as reflected in the continuing debate over President Obama’s signature health-care law, the Affordable Care Act, which has provided health insurance to millions who didn’t have it before.
But the basic program of Medicare now covers an estimated 55 million people, and three-quarters of Americans consider Medicare “very important,” according to a poll by the Kaiser Family Foundation. Seventy percent say it should remain as it is. So politicians who propose major changes do so at their peril.
More from U.S. News
In 1965, Experts Warned of Medicare-Induced Crisis
5 Challenges Facing Medicaid at 50
How Experts in 1965 Thought Medicare Would Change Health Care
The Politics of Medicare and Medicaid, 50 Years Later originally appeared on usnews.com
