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President Johnson Signs Medicare Into Law

President Johnson Signs Medicare Into Law


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On July 30, 1965, President Lyndon B. Johnson signs Medicare, a health insurance program for elderly Americans, into law. At the bill-signing ceremony, which took place at the Truman Library in Independence, Missouri, former President Harry Truman was enrolled as Medicare’s first beneficiary and received the first Medicare card.

Johnson wanted to recognize Truman, who, in 1945, had become the first president to propose national health insurance, an initiative that was opposed at the time by Congress.

READ MORE: When Harry Truman Pushed for Universal Health Care

The Medicare program, providing hospital and medical insurance for Americans age 65 or older, was signed into law as an amendment to the Social Security Act of 1935. Some 19 million people enrolled in Medicare when it went into effect in 1966.

In 1972, eligibility for the program was extended to Americans under 65 with certain disabilities and people of all ages with permanent kidney disease requiring dialysis or transplant. In December 2003, President George W. Bush signed into law the Medicare Modernization Act, which added outpatient prescription drug benefits to Medicare.

Medicaid, a state and federally funded program that offers health coverage to certain low-income people, was also signed into law by President Johnson on July 30, 1965, as an amendment to the Social Security Act.


Medicare Signed into Law

On July 30, 1965, President Lyndon Johnson traveled to the Truman Library in Independence, Missouri, to sign Medicare into law. His gesture drew attention to the 20 years it had taken Congress to enact government health insurance for senior citizens after Harry Truman had proposed it. In fact, Medicare&rsquos history dated back even further.

Congress held its first hearings on government health insurance in 1916 during the Progressive Era. During the New Deal, health coverage became part of the deliberations over the Social Security program, but President Franklin Roosevelt decided it was better strategy to pass the old-age pension provisions first. In 1939 Senator Robert Wagner introduced national health legislation and held hearings, but the outbreak of World War II caused his bill to be shelved. It was not until after the war, in November 1945, that Harry Truman sent Congress the first comprehensive federal health insurance proposal. That bill went nowhere.

During Dwight Eisenhower&rsquos presidency Congress enacted the Kerr-Mills bill for cases of &ldquomedical indigency,&rdquo to cover elderly individuals who needed help with their medical bills but who failed to qualify for welfare in their states. But reformers regarded Kerr-Mills as inadequate, given the rising number of elderly and the rising cost of hospital care.

In 1961 President John F. Kennedy made Medicare a legislative priority and recruited Clinton Anderson of New Mexico to manage his bill. Anderson, a pragmatic and effective legislator, had suffered frequent bouts of illness throughout his life. &ldquoPerhaps a man who has spent much of his life fighting off the effects of illness,&rdquo he once wrote, &ldquoacquires&hellipan understanding of the importance of professional health care to all people.&rdquo

Though public opinion polls suggested strong support for the bill, Anderson faced powerful opponents, including the House Ways and Means chairman, the American Medical Association, and Senate Finance Committee chairman Harry Byrd of Virginia. The bill&rsquos opponents prevailed, narrowly defeating the bill in 1962. It was reintroduced in 1963, and following Kennedy&rsquos assassination, Anderson worked painstakingly to build solid, bipartisan Senate support. Under intense pressure Anderson&rsquos own health faltered, forcing him to manage portions of the bill from a hospital bed at Walter Reed. In 1964 the House and Senate passed alternative versions of the bill but failed to resolve those differences in conference.

Lyndon Johnson&rsquos long coattails in the 1964 presidential contest increased support for Medicare in both chambers of Congress. Anderson seized the moment, working closely with House members to expand the scope of the original bill. On July 27 and 28, 1965, the House and the Senate agreed to the conference report on the final bill, which offered a &ldquothree layer cake&rdquo of coverage: hospital insurance for the aged, physicians&rsquo insurance for the elderly, and expanded federal assistance to supplement state medical payments for the poor. In recognition of Anderson&rsquos efforts, President Johnson invited him to attend the Medicare signing ceremony in Independence, Missouri, with former president Harry Truman.


How Medicare Came Into Existence

I t was 50 years ago Thursday, on July 30, 1965, that President Lyndon Johnson signed the Medicare bill, turning the national social security healthcare program for older Americans into law. But, despite Johnson’s legendary powers of legislative persuasion, the celebratory signing event&mdashcomplete with the enrollment of the first Medicare beneficiary, former President Harry S. Truman&mdashcould have looked very different.

After all, the idea of helping American seniors afford health care took time to gain traction: The idea came up not long after Franklin Roosevelt initiated the modern social-security system in the 1930s. When the coinage “Medicare” first came on the American scene, the program it described was not the one we think of today. In 1960, the term referred to an opposing program proposed by the Eisenhower administration. The big fear at the time was that tying any kind of health aid to social security would quickly deplete the funds available for that then-30-year-old system Eisenhower’s version, overseen by then-Vice President Richard Nixon, would have been both voluntary and state-funded.

In that year’s Presidential campaign, however, Nixon lost to challenger John F. Kennedy&mdashwho, as TIME put it a few years later, “vowed without qualification that his Administration would persuade a Democratic Congress to pass a medicare bill, to be financed under the social security system.” Kennedy died, however, before he could make good on that promise&mdashwhich is where Johnson comes in. Benefiting from his 1964 election victory, Johnson made it happen. But what exactly it would look like remained to be settled.

By April of 1965, as TIME reported, there were three options in the running: Johnson’s social-security-linked compulsory program an Eisenhower-esque voluntary program with no link to social security or an American Medical Association-backed plan called “eldercare,” which prioritized patient choice and was need-based. The solution came, surprisingly, in the form of House Ways and Mean Committee chair Wilbur Mills, who had been a staunch opponent of Medicare. He combined elements of the three plans into one that would succeed. The basics of the plan were compulsory and funded by increasing social-security taxes, while extras were voluntary. The program we now know as Medicaid, for those in need, would also be expanded.

“The medicare bill will not solve all the problems of growing old&mdashbut it will certainly make the process much less costly to the elderly,” TIME noted. And that wasn’t all it did, the magazine continued. The medicare bill represented a fundamental change to American political norms:

Almost 30 years ago, Franklin Delano Roosevelt signed into law the Social Security Act. At the moment of signing, he issued a statement that, in retrospect, sounds almost apologetic: &ldquoWe have tried to frame a law which will give some measure of protection to the average citizen and his family against the loss of a job and against poverty-ridden old age. This law, too, represents a cornerstone in a structure which is being built but is by no means complete. It is a structure intended to lessen the force of possible future depressions.&rdquo

Social security was mostly an emergency act in a nation still struggling out of the depths of a depression in which, in F.D.R.&rsquos famed phrase, more than one-third of the nation was &ldquoill-housed, ill-clad, ill-nourished.&rdquo The change since then in American life has never been more apparent than last week, when Congress acted on two bills that projected a new sort of welfare state beyond Roosevelt&rsquos wildest dreams. First, the House of Representatives passed and sent to the Senate, where it faces certain swift approval, the Johnson Administration&rsquos $6 billion-a-year medicare bill…

Action on both bills came not in time of depression but in the midst of the most prosperous year that the affluent society has ever known. There were a few squawks about presidential pressure, but it was widely accepted that both measures would achieve great good in making the U.S. even more affluent without turning it into a socialistic society. It was generally conceded that both bills, despite the vastness of their scope, were aimed not at increasing the power of the Federal Government, but at eradicating some remaining blemishes in the Great Society.

Read the full story, here in the TIME Vault: The New Welfare State


Photos

Click on individual photo to see it full size.


President Lyndon Johnson signs the Medicare Bill at the Harry S. Truman Library and Museum in Independence, Missouri. LBJ Library photo by unknown, 34897-22. Taken July 30, 1965.


President Lyndon Johnson and President Harry S. Truman shake hands at the Medicare Bill Signing at Harry S. Truman Library and Museum in Independence, Missouri. LBJ Library photo by unknown, 34897-14. Taken July 30, 1965.


President Lyndon Johnson, President Harry S. Truman, and others walk through the Harry S. Truman Library and Museum during the Medicare Bill signing event. LBJ Library photo by Yoichi Okamoto, A986-26a. Taken July 30, 1965.


President Harry S. Truman and President Lyndon Johnson speaking. Medicare Bill signing event at the Harry S. Truman Library and Museum. LBJ Library photo by Yoichi Okamoto, A982-22a. Taken July 30, 1965.

To see more photos from the Medicare Bill signing, we recommend searching our photo archive and using "Medicare" in the search field. All photos are public domain and may be downloaded.


How Medicare came to be, thanks to Harry S. Truman

Forty-nine years ago, President Lyndon B. Johnson found himself in Independence, Missouri. Although he was surrounded by a gaggle of politicians, distinguished guests and Secret Service agents, the president was armed only with a fountain pen, a bottle of ink and a sheath of papers. Seated directly beside him, so as to accommodate the newspaper photographers and the television cameras, was Independence’s favorite son, the 33rd president of the United States, Harry S. Truman.

LBJ had traveled to the “Show-Me-State” to sign the Medicare Act of 1965 into law and to praise the 81-year-old Truman who, as Johnson drawled in his thick Texas accent, was “the real daddy of Medicare.”

Designed to provide health insurance for Americans aged 65 and older as well as younger citizens with specific medical conditions or disabilities, Medicare was originally divided into two categories prosaically named “Part A” and “Part B.”

Part A covered hospitalization with payroll taxes and Part B was an optional health insurance program requiring a monthly premium to cover specific outpatient services, medical tests and equipment, among other things. Back in 1965, the payroll deduction for Part A was about $40 per year and Part B cost only $3 a month!

U.S. Rep. John Dingell (D-MI) participated in a rally to mark the 46th anniversary of the passage of Medicare at the U.S. Capitol on July 27, 2011. The longest currently-serving member of Congress, Dingell wielded the gavel during that historic session of the House of Representatives in 1965. Photo by Chip Somodevilla/Getty Images

President Johnson was hardly stretching the truth by honoring President Truman at the signing ceremony. During his administration, President Truman called for the institution of a federally funded health insurance program in 1945 and again in 1947 and 1949. Each presidential plea, however, was thwarted or ignored by the U.S. Congress, aided and abetted by powerful medical lobbies such as the American Medical Association and the American Hospital Association, which denigrated such efforts as a descent into “socialized medicine.” Harry Truman’s devotion to this cause was, in a sense, a means of honoring his former boss, Franklin D. Roosevelt who, for political reasons, was forced to remove an extensive health benefit plan from what became the Social Security Act of 1935. Parenthetically, another Roosevelt — Theodore Roosevelt — included a government-backed health plan on the platform of his failed presidential run in 1912 on the Progressive (“Bull Moose”) ticket.

There was some movement towards developing a national health care program during the Eisenhower years and even more so during John F. Kennedy’s far too brief presidency. But it was the powerful and politically savvy LBJ and the Democrats’ landslide victory in 1964 giving them control of both houses of the U.S. Congress that pushed Medicare across the federal finish line.

Today, Medicare is much more complicated and expensive as it funds a medical-industrial complex featuring a great many medical miracles that could only be imagined in 1965 as well as a great deal of spending that requires scrutiny, better evidence of efficacy and, ultimately, reduction. Part C (or Medicare Advantage) was instituted during the Clinton administration in 1997 to allow beneficiaries to choose a health maintenance program (HMO) instead of traditional fee for service. In 2003, George W. Bush signed Medicare Part D into law, which asks beneficiaries to pay an additional premium in order to receive prescription drug benefits. The passage of the Patient Protection and Affordable Care Act of 2010, during the Obama administration, allows for Medicare beneficiaries to receive a wide menu of preventive health care services and health screens and seeks to reduce the out-of-pocket expenses of Part D beneficiaries.

Today, more than 49 million Americans enjoy the benefits of Medicare by 2030, experts estimate that number will balloon to 70 million. Health economists project a cost of more than $1 trillion a year to fund Medicare by 2022, thanks to the increase in the average American’s lifespan, the ever-rising costs of medical care and new medical technologies, and the aging of the Baby Boom generation. And while these rising costs are cause for concern for those who worry about the health of our nation’s future economy, polling data consistently note that Medicare remains one of the most popular federal government programs. For example, a tracking poll conducted by the Henry J. Kaiser Foundation in February of 2012 reported that 70 percent of Americans believed Medicare “should continue as it is today with the government guaranteeing seniors health benefits and making sure that everyone gets the same defined set of benefits.”

Back in July of 1965, President Johnson predicted that Medicare would be a vital protection for elderly Americans from the “hopeless despair” of not being able to afford health care. So in a very real sense, Harry Truman had a far more compelling reason beyond the merely political or presidential when he accepted Lyndon Johnson’s invitation to sit beside him 49 years ago: the first Medicare card issued was presented to “Give ‘Em Hell Harry,” making Truman the nation’s first Medicare beneficiary, and the second Medicare card was presented to his loving wife Bess.

Left: President Lyndon B. Johnson signing the Medicare Bill at the Harry S. Truman Library in Independence, Missouri. Former President Harry S. Truman is seated at the table with President Johnson. Lady Bird Johnson stands behind the president. Archive photo from the White House Press Office


Protect Medicare

Medicare's first beneficiaries paid a $40 annual deductible for Part A. The monthly premium for Part B — in which Truman did enroll — was $3. Today those Medicare costs are $1,184 for the annual Part A deductible and a premium of roughly $105 a month for Part B, plus a $147 annual deductible.

Prior to Medicare, those over 65 without access to an employer's health plan or a private insurance plan were on their own, or dependent upon their families, when they required medical care. Efforts to create such a health safety net program were years in the making.

Here is a time line of several Medicare and insurance-related milestones:

1945: President Truman calls for a national health insurance program for all. Legislators on Capitol Hill don't act. He asks again in 1947 and 1949. Bills are introduced but die in Congress.

1961: A task force convened by President John F. Kennedy recommends creating a national health insurance program specifically for those over 65. In May 1962 Kennedy gives a televised speech about the need for Medicare.

1964: President Johnson calls on Congress to create Medicare.

1965: Legislation creating Medicare as well as Medicaid (health care services for certain low-income people and others) passes both houses of Congress by a vote of 70-24 in the Senate and 307-116 in the House. President Johnson signs the Medicare bill into law on July 30 as part of the Social Security Amendments of 1965.

1966: When Medicare services actually begin on July 1, more than 19 million Americans age 65 and older enroll in the program.

1972: President Richard M. Nixon extends Medicare eligibility to individuals under age 65 who have long-term disabilities or end-stage renal disease.

1997: Private insurance plans — originally called Medicare+Choice or Part C, later renamed Medicare Advantage — begin, giving beneficiaries the option of choosing an HMO-style Medicare plan instead of the traditional fee-for-service Medicare program.

2003: On Dec. 8, President George W. Bush greatly expands Medicare by signing the Medicare Modernization Act, which establishes a prescription drug benefit. This optional coverage, for which beneficiaries pay an additional premium, is called Medicare Part D.

2006: On Jan. 1, Medicare Part D goes into effect and enrolled beneficiaries begin receiving subsidized prescription drug coverage.

2010: The health care law (officially the Patient Protection and Affordable Care Act) signed by President Barack Obama on March 23 mandates that Medicare beneficiaries receive certain preventive care services and health screenings, such as mammograms, free of charge and reduces the out-of-pocket expenses of Part D enrollees.

Today, nearly 50 million Americans — 15 percent of the nation's population — depend on Medicare for their health insurance coverage. With increasing life expectancies and more boomers turning 65 every day, the number of people in Medicare is expected to double between the years 2000 and 2030.

Melissa Stanton is an editor at AARP.org.

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How Medicare fulfilled a president’s half-century-old promise

President Lyndon Johnson signed Medicare into law 50 years ago Thursday alongside former President Truman at a ceremony at the Truman Library in Independence, Mo. At rear are Lady Bird Johnson, Vice President Hubert Humphrey and former First Lady Bess Truman.

Half a century after President Lyndon Johnson signed legislation creating Medicare and Medicaid with a pledge that seniors no longer would “be denied the healing miracle of modern medicine,” the promise has been largely fulfilled.

The two entitlements – one for the elderly and one for low-income Americans - have kept generations of seniors in their homes and extended life-saving insurance protections to poor children and families. The share of uninsured seniors, which was 48% in 1962, is now less than 2%.

Yet, the two programs today look far different than they did in 1965, as Democrats and Republicans have each expanded and reshaped them over the last five decades.

The evolution has been at times contentious, and often unexpected, with GOP presidents presiding over some of the biggest expansions of the government healthcare plans.

That history may offer clues about what lies ahead for the sweeping health law that President Obama enacted in 2010.

“It will be very hard to pick apart the Affordable Care Act,” said Commonwealth Fund President Dr. David Blumenthal, who has written extensively about U.S. healthcare history. “But I expect there will be efforts to reduce its scope and to expand it.… That tension will shape the law for generations to come.”

Not unlike the 2010 law, Medicare and Medicaid were the product of years-long political battling, intense industry lobbying and hyperbolic rhetoric, including charges from the American Medical Assn. and other critics that a government health plan for the elderly would pave the way to communism.

“The attacks were vicious,” said Julian Zelizer, a Princeton historian and author of a recent book about how Medicare and other Great Society programs were crafted in the mid-’60s.

To mollify opponents, the architects of Medicare and Medicaid deliberately limited the two programs at first.

Medicare, for example, didn’t cover prescription drugs. It didn’t even set medical fees, allowing physicians to set their own rates.

For its part, Medicaid, which was run by states, was initially envisioned only as coverage for very low-income mothers and children receiving cash welfare.

And federal lawmakers gave states broad discretion whether to even set up a program. (It was not until 1982, when Arizona joined, that all 50 states adopted Medicaid.)

“For years, it was a poor program for poor people,” said Columbia University’s Michael Sparer, a leading Medicaid scholar. “It was really an afterthought.”

It didn’t remain so. Medicaid, which covered fewer than 20 million people in 1970, now insures close to 70 million, as state and federal officials from both political parties collaborated over the years to steadily make more Americans eligible.

Through the ’80s, for example, Southern governors who were worried about high infant mortality pushed Democrats and Republicans in Washington to bring pregnant women and more children into the program.

In the ’90s, children from working-class families were brought into government coverage as President Clinton, a Democrat, and congressional Republicans created the State Children’s Health Insurance Program.

Some states went further still, expanding government coverage to poor adults without children, a population shut out of Medicaid in most states.

The Affordable Care Act extended these protections again, as 30 states have now elected to take federal aid made available by the law to insure childless adults.

Medicare, which now covers about 55 million people, has added new groups too, including disabled Americans.

It has also added benefits. In 2003, President George W. Bush, a Republican, pushed through a prescription drug benefit, the single largest expansion of services in Medicare’s history.

Republicans also have battled with Democrats for more use of commercial insurers in Medicare, a campaign that led to the steady expansion of the Medicare Advantage program. (A similar development has unfolded in Medicaid, which relies increasingly on private managed care companies to administer coverage.)

Even more profoundly, Medicare abandoned its hands-off approach to physicians and hospitals, starting most dramatically under another Republican, President Reagan.

Since the ’80s, the federal government has used its power as the largest single payer for healthcare to drive medical providers around the country to improve quality and efficiency.

“We’ve had Republican presidents expanding benefits and imposing cost controls,” said University of North Carolina political scientist Jonathan Oberlander, a Medicare authority. “The politics of Medicare aren’t entirely predictable.”

Today, Medicare and Medicaid are behemoths, covering one in three Americans with a combined annual budget of more than $1 trillion.

The rising tab is a persistent source of concern, particularly for conservatives. But the programs remain very popular.

More than three-quarters of Americans in a recent nationwide poll by the Kaiser Family Foundation said Medicare is “very important.” Nearly two-thirds said the same about Medicaid.

Whether the Affordable Care Act will follow a similar trajectory remains unclear.

Unlike Medicare and Medicaid, which were ultimately backed by Republicans and implemented with relatively little controversy, the 2010 law remains deeply polarizing, even five years after its enactment.

But around the country, there are some signs that GOP officials are quietly making accommodations, and even putting a conservative stamp on elements of the law, such as the Medicaid expansion.

“Once you have government insurance programs, they tend to stay around,” said Oberlander. “Lots of people have screamed about socialized medicine over the years, yet on marched Medicare and Medicaid.”


Anniversary of the Medicare Law of 1965

July 30, 1965, President Lyndon Johnson signed into law the Social Security Act Amendments, know as the Medicare Bill, providing federal health insurance for elderly and low-income Americans. President Harry S. Truman, longtime advocate of such legislation, was present at the signing and received the first Medicare registration card.

79 Stat. 286 – Social Security Amendments of 1965

October 30, 1972, President Richard Nixon signs into law the first major adjustment to Medicare after its enactment expanding benefits.

86 Stat. 1329 – Social Security Amendments of 1972

"…this logical extension of our proven social security system will supply the prudent, feasible and dignified way to free the aged from the fear of financial hardship in the event of illness."

President Lyndon B. Johnson, January 7, 1965, Special Message to Congress: “Advancing the Nation’s Health.” Read the entire speech here on the University of California, Santa Barbara's website.

Watch the video of President Johnson signing the Medicare Bill at the Truman Library and presenting President Truman with the first Medicare card on the LBJ Presidential Library’s website.


When Did Medicare Start?

Medicare started in the year 1965. President Lyndon B. Johnson signed the bill that eventually became the Medicare and Medicaid federally funded programs. The term Medicare consists of two parts Part A and Part B. Part A paid for hospital and other inpatient services, and Part B paid for outpatient office visits.

Medicare eligibility extended to people under the age of 65, with long-term disabilities (and those with ESRD) under the Social Security Amendments of 1972. During this time, the program added more coverage for benefits like physical, speech, and chiropractic therapy.

Before Medicare, only 60% of seniors over 65 had health coverage. Due to lack of availability and high prices, seniors often paid three times as much for coverage as younger people.

When Did Medicare Advantage Plans Start?

When Was Medicare Part D Established?

Since the history of Part D, the plan has become quite popular among beneficiaries. In more recent years, Part D spending has outgrown the rest of the Medicare programs. Medicare Trustees expect this trend to continue to increase over the next decade.

Initially, Part D included a gap between the original coverage and a particular benefit point called catastrophic coverage. The Affordable Care Act of 2010 filled that donut hole. Meaning, brand-name drug manufacturers were ordered to give a 50% discount on any drugs purchased during this phase. Then, the federal government covers an additional part of the drug expense.

The newest update in the History of Part D is now the government covers up to 75% of the costs when beneficiaries spend a specific amount on prescriptions within a year.

When did Medicare Supplement Plans Start?

America’s Healthy Future Act (Baucus Amendment)

The “Baucus Amendment” protects consumers and their policies. However, there were people taking advantage of this program from both the consumer and insurance sides.

Medicare and Medicaid Patient and Program Protection Act

To fight this, the government introduced the Medicare and Medicaid Patient and Program Protection Act in 1987 this would make providing false medical information to become a felony crime.

Medicare Catastrophic Coverage Act

One of these acts was the Medicare Catastrophic Coverage Act. This act implements several restrictions to further protect consumers, such as out-of-pocket maximums and premiums. During this time, several voluntary guidelines became mandatory standards by the federal government.

One of the most vital standards was the limits on pre-existing conditions that could cause a person exclusion from a plan. After passing a few acts, the previous rule saw an amendment.

Omnibus Consolidated and Emergency Supplemental Appropriation Act

The last act to be passed in the nineties was the Omnibus Consolidated and Emergency Supplemental Appropriation Act of 1999. The most important part of this act called on the providers that paid for these specific plans. With the passing of this act, they were now subject to civil penalties.

As the 2000s began, this coverage continued to change. In 2001, the government looked to protect those that experienced sudden life changes or other changes to their health insurance policy status.

Consolidated Appropriations Act

Under the Consolidated Appropriations Act of 2001, these users were able to purchase new supplemental coverage. This act made sure any pre-existing conditions that had exclusion from the previous policy were also excluded from the new plan.

Medicare Prescription Drug Improvement and Modernization Act

Prescriptions became a point of discussion for coverage in 2003. The Medicare Prescription Drug Improvement and Modernization Act changed the way Medigap policies treated drugs.

Depending on the plan, some could keep their old policies while others took the option to purchase new coverage. Those that had to buy new insurance had protection from rising premiums.

The federal government made it illegal for the plan provider to take into account the buyer’s past claims, health records, pre-existing conditions, and other issues to calculate the premium.

It was after the passing of the Medicare Prescription Drug Improvement and Modernization Act that the federal government introduced two additional supplement plans.

These new plans offer two features:

These were the only two plan options that had to include these features. However, there were plenty of Medigap plans available.

As the coverage evolved and new legislation changed the requirements and guidelines, some of these plans became obsolete. After 2010, Plans E, H, I, and J were no longer available.

Genetic Information Nondiscrimination Act

Another turning point for Medicare came in 2008 with the introduction of the Genetic Information Nondiscrimination Act. This act made it illegal for a health insurance plan provider to discriminate against genetic information.


How Medicare Was Made

Fifty years ago, Congress created Medicare and Medicaid and remade American health care. The number of elderly citizens lacking access to hospitals and doctors plummeted. Hospitals, physicians, and state and local governments came to depend on this federal funding. 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.

When Medicare was first proposed, in the late nineteen-fifties, national health insurance had been a losing cause for decades. In the thirties, Franklin Delano Roosevelt had chosen not to add health care to his Social Security proposal because he believed that it would be too controversial, and would damage the prospects of other programs. Whereas most Western democracies had adopted some form of national health-care program, the United States relied on a private system that revolved, as the sociologist Paul Starr has recounted, around a sacred understanding of the doctor-patient relationship. When liberals talked about giving the government a bigger role in health care, stakeholders in the existing system always fought back, protecting their authority and autonomy by warning that Washington would sever the ties between doctors and their patients. It was one thing to distribute old-age pensions but quite another to allow the government to intrude into intimate medical affairs. When one senator suggested in 1937 that President Franklin Delano Roosevelt was prepared to expand the government’s role in medicine if doctors did not do more to help the needy, Time magazine asked in its June cover story, “Nationalized Doctors?”

When President Harry Truman proposed national health insurance for every American in 1945, and again in 1949, as part of his effort to move forward with domestic policies that had been left out of the New Deal, he and allied liberals came to see why F.D.R. had avoided the issue of health care back in the nineteen-thirties. The American Medical Association conducted the most expensive lobbying effort to that date in opposition to Truman’s health-care plan, which it branded as “un-American” and “socialized medicine.” Charging that the Truman Administration consisted of “followers of the Moscow party line,” the A.M.A. worked closely with the conservative coalition in Congress to kill the measure in committee. By 1950, the proposal was dead.

Meanwhile, during the forties and fifties, the government solidified the private health-care system through corporate tax breaks that subsidized companies offering their workers insurance. More workers were brought into the private system through this indirect and hidden form of government assistance, creating even greater resistance to the idea of the federal government directly providing insurance.

Still, many Democrats remained convinced that the health-care system left too many Americans without access to affordable care. In 1957, Congressman Aime Forand, an ardent New Deal liberal who had quit school after seventh grade to take care of his ailing father, came up with the idea of a smaller and more targeted program as a first step toward national health insurance. With Congressman Cecil King, a California Democrat, Forand proposed covering some of the medical costs of the growing number of Americans over the age of sixty-five. The problem of elderly Americans who lacked health care was acute, according to the Department of Health, Education, and Welfare. Older Americans required more than twice as much hospital care as people under the age of sixty-five. Even with Social Security benefits, most could not afford the cost of hospitalization, which was rising rapidly during these years as a result of medical advances. Forand and King made the tactical decision to propose that the program fall under the Social Security Administration. Liberals would be able to argue that they were simply expanding the popular program and paying for the new benefits through the Social Security payroll tax.

In the House and Senate, the proposal, which the media called Medicare, received strong support from a new cohort of Democrats including Richard Bolling, of Missouri, and Hubert Humphrey, of Minnesota, whose numbers had been steadily growing since the 1946 election and exploded in the 1958 midterms. They were a new generation of Northern liberals who, while slightly younger than Forand and King, had been deeply influenced by the New Deal and were committed to extending its benefits in areas like health care, civil rights, and education. In their minds, the economy was booming, so the U.S. could afford to have the federal government alleviate all kinds of social problems that, until then, had been ignored. They were aligned with Walter Reuther, the president of the United Automobile Workers, who said to the program’s critics that it was time to “quit fighting ideological windmills and deal with basic human needs.”

Organized labor, a powerful player in American politics at this time, when thirty per cent of the workforce was unionized, threw its support behind Medicare. Labor leaders cheered when Massachusetts Senator John Kennedy announced his support for Medicare during his 1960 Presidential campaign against Richard Nixon. Kennedy was no radical, but he believed that health care was one area where the government needed to have an expanded role. Kennedy saw the revised health-care bill as attractive in principle, as well as fiscally responsible, because workers would pay for the benefits that they would eventually receive. On August 14, 1960, Kennedy visited Hyde Park to celebrate, with Eleanor Roosevelt, the twenty-fifth anniversary of Social Security, and he used the occasion to promote Medicare. The program was desperately 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,” the candidate said.

Despite his reputation for being dispassionate about domestic policy, Kennedy, as President, authorized an all-out public-relations effort in support of Medicare. While there were many areas of policy, like civil rights, where Kennedy avoided action for fear that congressional conservatives would kill his ideas, the President believed that the bill stood a decent chance of passing, because so many voters loved their Social Security. On May 20, 1962, the President delivered a spirited address at a rally in Madison Square Garden, with more than seventeen thousand people in attendance and many more watching on television. “The fact of the matter is that what we are now talking about doing, most of the countries of Europe did years ago,” Kennedy said. “The British did it thirty years ago. We are behind every country, pretty nearly, in Europe, in this matter of medical care for our citizens.”


LBJ Launches Medicare: ‘You Can’t Treat Grandma This Way’

Yes, our health system is broken, but broken systems can be fixed — not easily, but they can be fixed.

An elderly woman shows her gratitude to President Lyndon B. Johnson for his signing of the Medicare health care bill in July 1965. (Photo by © CORBIS/Corbis via Getty Images)

Watching the craziness in the Senate this week, as Mitch McConnell and the GOP’s zealots drove their clown car into a brick wall and yet another effort to take away health care coverage from millions crashed and burned, I thought back to a different turn of events.

It was 52 years ago this Sunday — July 30, 1965. Two American presidents celebrated the birth of Medicare, the most significant advance toward national health insurance in America’s history.

I was a White House assistant at the time, working for President Lyndon B. Johnson as he coaxed, cajoled, badgered, buttonholed and maneuvered Congress into enacting Medicare for the aging and Medicaid to help low-income people. For all the public displays over the years of his outsized personae and powers of persuasion, this time he had kept a low profile, working behind the scenes as his legislative team and career health care experts practically lived on Capitol Hill, negotiating with members of Congress and their staffs.

From the White House, LBJ worked the phones invited senators and representatives singly and collectively in for coffee, drinks or dinner listened attentively in private to opponents and proponents from interests as varied as business, labor, medicine and religion and kept in his head a running tally of the fluctuating vote count.

As it had been for decades, it was a tough fight down to the wire. A look back is instructive, not only to show how long it can take to move a legislative dream to reality but also to illustrate how a president with a grasp of history and knowledge of how government works is crucial to making success possible.

In 1935, when President Franklin Roosevelt first tried and failed to get health insurance included as part of Social Security, I was 1 year old and my family was broke. The Great Depression had ended my father’s tenant farming. He took a job for a dollar a day as a laborer on the construction of a highway in southeast Oklahoma.

Earlier, my mother had lost twin girls — one at birth, the other some months later — because the nearest doctor was too far away to arrive in time to help. My parents moved into town. To pay the doctor who delivered me, my father lugged large stones by hand to the site the physician had bought to build his first office. It’s still there.

At about this time in Washington, Republicans, conservative Democrats and the American Medical Association (AMA) were winning their fight to sink President Roosevelt’s proposal for health insurance. Congress was intimidated, and in August 1935 FDR gave up, signing the Social Security Act without health coverage.

Eight years later, in the midst of World War II, he once again called for social insurance “that will extend from the cradle to the grave.” And again, his proposal went nowhere.

On FDR’s death, Harry Truman became president. In his 1948 Message to Congress on the State of the Union, he said:

This great nation cannot afford to allow its citizens to suffer needlessly from the lack of proper medical care. Our ultimate aim must be a comprehensive insurance system to protect all our people equally against insecurity and ill health.

Congress still refused to budge. Running for election in his own right that year, and way behind in the polls, Truman won an upset victory after demanding that health care insurance and civil rights be included in the Democratic Party platform. That same year, congressman Lyndon Johnson of Texas, whose home district was Democratic and liberal in a state turning increasingly Republican and conservative, was running for election to the US Senate. He opposed Truman’s health care plan as socialistic and was elected.

In 1952, Republicans won control of Congress for the first time since 1932 and hardened their stand against a national health care program. War hero Dwight Eisenhower won the presidency for the Republicans. He, too, opposed the plan that had been shelved by Congress before Truman left office.

Ike only was willing to support subsidizing private insurers to cover certain low-income groups and no more. With the continuing opposition of the nation’s doctors — amplified through their political lobby, the AMA, as well as the US Chamber of Commerce — the notion of Medicare appeared finished once and for all.

Yet when he yielded the presidency to Eisenhower, Truman lamented his failure but was prophetic when he said: “[It] has only delayed and cannot stop the adoption of an indispensable health insurance plan.”

He was right. The battle heated up. In 1957, the AFL-CIO brought its 14 million members to the fight. The American Hospital Association, which bore the brunt of the problems older people encountered as they aged, signed on, too.

Public opinion was swinging in favor of national health insurance. When John F. Kennedy and Lyndon Johnson were nominated as the Democratic ticket in 1960, they made health care for Social Security retirees a major plank in the platform and endorsed a bill in the Senate that in time would become Medicare.

Though he was Kennedy’s running mate, Johnson was still the powerful Senate majority leader, that body’s top Democrat, and responsible for steering its legislative agenda. After a long day on the campaign road, or in the Senate, we would get to his home late and he would stay up until after midnight, making phone calls to one or another member of Congress urging passage of the Medicare bill.

Despite his efforts, it failed by four votes. LBJ had studied the polls and knew public opinion was building for national health insurance he feared this defeat might cost Democrats the election. It didn’t, although the margin of victory was incredibly slim. As soon as they were inaugurated, now President Kennedy and Vice President Johnson championed yet another effort known as the Medical Care for the Aged bill. Still adamantly opposed by the Republicans and the AMA, it also failed — this time by two votes.

In early 1963, the bill was reintroduced in Congress, only to fail again. Some observers again pronounced it once and forever toast. But in November of that year, an assassin killed John Kennedy, tragically catapulting Lyndon Johnson into the White House. Just days later, in a dramatic speech to Congress and the nation, he slowly and deliberately drawled: “Let us continue!” With that challenge, LBJ set out to enact Kennedy’s legislative agenda — with a good chance, he thought, of passing the Medicare bill.

As before, the opposition fought back with everything they had, which now included the AMA’s new pitchman, Ronald Reagan. Not yet a candidate for public office, the actor was hired to warn the country against letting government get between doctors and their patients. He made a popular recording played at thousands of small meetings around the country in which attendees heard his pitch warning of “socialized medicine” and predicting “behind [Medicare] will come other federal programs that will invade every area of freedom as we have known it in this country.” Just think if he’d had Twitter.

Our strategy that year came to naught, producing in the early fall a stalemate. The Senate actually did pass a national health care bill for the elderly (despite the opposition of the Republican nominee for president, Barry Goldwater of Arizona, who interrupted his campaign and returned to Washington to vote no). But the powerful and conservative Democratic chairman of the House Ways and Means Committee, Wilbur Mills, would not agree to a medical care provision of any kind. A conference meeting to work out differences between the House and Senate ended in deadlock.

Johnson gritted his teeth and returned to the campaign, winning a four-year term in his own right.

Elections matter — surely no one doubts that fact anymore — and the ’64 election mattered dramatically. Not only did it deliver LBJ a landslide victory, but it brought Democrats their biggest majorities in the House and Senate since FDR. “If we can’t get Medicare through now,” the president told me after the election, “we don’t deserve what we just won.”

So as soon as he and Vice President Hubert Humphrey were inaugurated in January 1965, we started over. You can get a glimpse of the intensity of LBJ’s drive from a conversation I had with him around that time. With others, I had urged that the new bill include a provision for a retroactive increase in Social Security payments as an economic stimulus. He called me to say okay, but wanted me to understand it wasn’t because of the economy:

…My inclination would be … that it ought to retroactive as far back as you can get… because none [of the elderly] ever get enough. They are entitled to it. That’s an obligation of ours. It’s just like your mother writing you and saying she wants $20, and I’d always sent mine a $100 when she did. I never did it because I thought it was going to be good for the economy of Austin. I always did it because I thought she was entitled to it. And I think that’s a much better reason and a much better cause and I think it can be defended on a hell of a better basis…. We do know that it affects the economy… it helps us in that respect. But that’s not the basis to go to the Hill, or the justification. We’ve just got to say that, by God, you can’t treat grandma this way. She’s entitled and we promised it to her.

He understood the legislative process like no one I ever met. “Nothing given, nothing gotten — that’s the rule!” he told us in an Oval Office meeting on how to break yet another Capitol Hill deadlock. He sent his senior legislative aide to play sweet with a still-recalcitrant Wilbur Mills and warned, “I’ll tell you this, Wilbur Mills will take your pants off unless you’ve got something that he’s got to trade for.” When Mills still wouldn’t budge, the president let loose a string of invectives that would have made even Anthony Scaramucci blush. The next day he was courting Mills again, as if nothing had happened.

As the cherry blossoms bloomed that spring of ‘65, the president thought Congress was moving too slowly. The civil rights movement was under siege in the South, violence was continuing against blacks and we were working around the clock to pass legislation to end discrimination. Even so, he wouldn’t let us slow down on Medicare — or other pending priorities. When he thought we were lagging, he took us to the woodshed, as you can see in a telephone conversation with Vice President Humphrey and me:

They [the House and Senate] are bogged down. The House had nothing this week — all goddamn week. You and Moyers and Larry O’Brien [his chief congressional expert] have got to get something for them. And the Senate had nothing… So we just wasted three weeks… Now we are here in the first week in March [1965], and we have just got to get these things passed… You’ve got to look each week and say, what is the Senate doing in committee this week and when will they be through, what is the House doing… You’ve got to be running into these guys [members of Congress] in the halls, and going over and having a drink with them in the evenings… I’ll put every Cabinet officer behind you, I’ll put every banker behind you, I’ll put every organization that I can deliver behind you… I’ll put the labor unions behind you.

A few days later, breakthrough. LBJ’s now-gentler courting of Wilbur Mills paid off, and the House Ways and Means chairman pieced together a bill from several options championed by different interests. He got it past the committee’s conservative coalition with a straight party vote, 17-8.

Remembering our defeat the previous fall, our team fretted over how to make the final sale to the full House and Senate. The president had some more advice for us. As he told Larry O’Brien, the White House chief legislative honcho: Give bragging rights to anyone who voted on the final version of both Medicare — and the big education bill also in the pipeline:

[Tell them] that every guy that votes for Medicare and education, his grandchildren will say my grandpa was in the Congress that enacted these two… So it makes ‘em proud. And they can go back home and say I was one of the 54 [who voted yes], or my daddy was one of the 54… so all his children and grandchildren are bragging about being one of the 54.

Medicare passed the House by a vote of 313-115. But in the Senate, liberal Democrats added $800 million to its cost, outraging conservatives (and vexing LBJ, who knew such overreach would give opponents more fuel to attack).

Back the bill went to a conference committee between the House and Senate. Then to the House floor again, where it survived more than 500 amendments before passing on July 27 by majority vote, 307-116. One day later the Senate passed it, 70-24. All that was needed now was the president’s signature and Medicare and Medicaid would become the nation’s first public health insurance programs.

And that’s how it came to pass that 52 years ago, on the morning of July 30, 1965. President Johnson loaded up two planeloads of dignitaries and headed toward Independence, Missouri, hometown of former President Harry Truman. He intended to sign the bill at the side of the man whose original proposal LBJ had dismissed as socialism. Now he revered Truman as “the real daddy of Medicare.” Here’s the actual moment Medicare became the law of the land:

President Lyndon Johnson flips through the pages of the Medicare bill for former President Harry Truman in Independence, Missouri on July 30, 1965. Behind Johnson and Truman are Mrs. Johnson (left), Vice President Hubert Humphrey and Mrs. Truman. (Photo by Bettmann Collection via Getty Images)

After signing the bill, Lyndon Johnson turned to Harry Truman and signed him up as Medicare’s first beneficiary. It was high drama, touched with history, politics, sentimentality, showmanship and compromise.

The legislation was far from perfect. LBJ once told me never to watch hogs slaughtered before breakfast and never ever show young children how legislation gets enacted.

Too much secrecy surrounded the bill’s passage. Even as the president signed it into law, we weren’t sure of all that was in there. As some principled conservatives warned, there were too few cost controls. The experts feared copays and deductibles would become a burden.

“Those can be fixed,” LBJ said, “once it sinks in that Medicare is here to stay.”

Meanwhile, as historian Robert Dallek has written, although Medicare and Medicaid did not solve the problem of care at reasonable cost for all Americans, “the benefits to the elderly and the indigent… are indisputable.”

Perhaps the biggest mistake was one of imagination — our failure to anticipate the advent of new and expensive technology to treat the sick or the demand on the system that would rise from a burgeoning population. That spring President Johnson had warned, “We will face a new challenge and that will be what to do within our economy to adjust ourselves to a life span and a work span for the average man or woman of 100 years.”

That, and the cost, we reckon with today.

Now that the eight-year effort of conservatives to repeal the Affordable Care Act (itself a flawed but significant extension of the effort to help more people get decent coverage) is stalled, the next steps are crucial. Going back to the status quo — a system driven by the profit motive and rationed health care based on income — is unthinkable. At the website Common Dreams, Dr. Carol Paris, president of Physicians for a National Health Program, writes:

“Clearly, the system is broken. Like a cracked pipe, money gushes into our health care system but steadily leaks out. Money is siphoned into the advertising budgets of insurance companies and the army of corporate bureaucrats working to deny claims. Even more dollars are soaked up by the pockets of insurance CEOs who have collectively earned $9.8 billion since the Affordable Care Act was passed in 2010. Nearly a third of our health care dollars go to something other than health care.”

Yes, our health system is broken, but broken systems can be fixed — not easily, but they can be fixed.

Watching recent events, I thought of the long and arduous process I’ve just related, the many steps that brought Medicare into being, and how I was afforded a modest role in the supporting cast.

I came away from the experience with three lessons. First, whether health care is a right may be debatable, but it assuredly fulfills a basic human need — and without it, human beings without means will live and die suffering unduly.

Second, building that more perfect union which the founders of this republic defined as the mission of government has always been slow, hard, acrimonious, frustrating, tiring and elusive, because we as individuals are ourselves imperfect and because there are always among us those predators who regard democracy as an obstacle to their avarice.

Against such realities, the only way for democracy to succeed is for enough people to take up the cause where and when they can, as so many did for Medicare and are doing now for our eroding social covenant. That’s the third lesson I learned: It is harder to build something than to burn it down, but build we must.


Watch the video: Barry Goldwater explains his vote against the Civil Rights Act of 1964 - Firing Line 1966 (May 2022).