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The History Of Medicare

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 the 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.”

The A.M.A. launched an aggressive campaign in opposition to the President. Edward Annis, the president of the A.M.A., delivered a televised response to Kennedy’s address: Medicare would “put the government smack into your hospital.” A new A.M.A. political-action committee offered campaign support to candidates who opposed the bill. The A.M.A. women’s auxiliary launched Operation Coffee Cup, in which doctors’ wives hosted living-room discussions about the dangers of socialized medicine. Ronald Reagan produced a record to be played at these events, “Ronald Reagan Speaks Out Against Socialized Medicine,” in which he warned that “one of the traditional methods of imposing statism or socialism on a people has been by way of medicine.” The A.M.A. also had strong allies, such as the insurance lobby, which preferred to work behind the scenes to combat the bill.

In the House of Representatives, A.M.A. officials were counting on Wilbur Mills, an Arkansas Democrat and the chairman of the Ways and Means Committee. At five foot eight and a hundred and eighty pounds, with slicked-back hair and thin silver-rimmed glasses, Mills didn’t look like a congressional giant, but he was a key player in the insular world of tax and security experts. A graduate of Hendrix College, in Arkansas, he had attended Harvard Law School and was rumored to spend evenings reading the tax code. He had lived with his wife in the same modest apartment, near the National Zoo, for almost twenty-five years, and was renowned for his grasp of abstruse fiscal issues.

Source
This article was originally published in the New Yorker on February 15, 2015 and written by Julian Zelizer.