How did Medicare come about? What constraints and opportunities were involved in is passage? How did this legislation shape future expectations?
At the beginning of my presidency, I indicated that the administration would continue to build on the efforts of President Kennedy to create a better country for its older citizens; to ensure that the older American would never become a second-class citizen in his own country. When I entered office, the problem of poverty was an all-pervasive blight. Over three million elderly families were living with incomes of less than three thousand dollars a year, with much less money to pay for a much higher need for medical services.[1]
Thirty years before my presidency, the Nation took a first step to meet the needs of its older citizens by adopting the Social Security program, which gave Americans some confidence as they looked towards retirement. But many older citizens were still defenseless against the high medical costs of sickness or disability. Existing “solutions” such as private insurance and welfare based assistance were not adequate.
Therefore I proposed a sound and workable solution: hospital insurance based on Social Security payments. This program had two basic goals: protecting those over 65 from the heaviest costs of serious illness and providing a base that private programs of health insurance could then supplement.[2] The system was to be funded and administered through the Social Security program.
Medical science and our increasing health standards lengthened our life spans. Our assignment was to improve the quality of that life for older Americans. I took a series of steps to achieve this goal. I directed the Council on Aging to study and create ways to develop new skills for our older workers. I also sought the passage of hospital care for the aged, and declared May 1965 as Senior Citizens Month.[3]
The resulting Medical Care and Social Security Bill was a great step forward for all of our senior citizens. For the first time, health insurance protection for all persons of 65 and over was a part of America’s social insurance system. During their working years, Americans would be expected to contribute a small amount each payday for future hospital insurance protection. Upon reaching the age of 65, the Government would contribute to lower the burden of medical costs.[4]
In this country, we believe that every man wants dignity and a decent life, that every man wants a fair chance and not charity. Our passage of Medicare reflected our belief that older Americans earned and deserved a peace of mind, not pain and panic, in the event of illness or disease. [5] For our citizens who have moved to the sidelines after serving their tour of duty, those citizens were and continue to be our prideful responsibility, and they should be entitled to the best medical protection available.[6]
During my presidency, I had the honor of celebrating the 30th anniversary of the passage of the Social Security Act. Because of Social Security, millions of Americans were able to stand unafraid of their future. It had become so important to our lives in 1968 that it was hard to imagine that when it was first proposed it was bitterly attacked – much in the same way Medicare was maligned when it first came into being.[7]
But our efforts to pass Medicare, as well as our improvements to Social Security in 1968 represented the most significant step forward since President Franklin Roosevelt signed the Act into law in 1935. Over 20 million Americans, in addition to receiving health insurance, received increased Social Security benefits of at least 13%. Additionally, I appointed a Commission on Income Maintenance Programs to study all aspects of existing welfare and to make recommendations for constructive improvements where necessary. In those years, we proved that people who have earned their living can make their lives better and more secure by diverting part of their incomes to protect themselves from fortune. Our challenge was and continues to be insuring human dignity and security to those who are unable to by their own protection.[8]
Editor’s Note
The decade of the 1960s brought substantial reforms to Social Security. On July 30, 1965, President Johnson singed the Medicare bill, creating a new social insurance program that extended health coverage to almost all Americans aged 65 or older. In fact, in the first three years of the program alone, nearly twenty million beneficiaries were enrolled.[9] The program was a remarkable success in providing increased protection and safety to America’s older generations.
The much discussed problems associated with the rapidly rising costs of Medicare demonstrate the difficulty that President Johnson and subsequent leaders had in curtailing the program’s problematic growth. But at the time of its inception, Medicare was sorely needed, with millions of American citizens exposed to a variety of illness without a method to cover related costs. For President Johnson, as it had been for President Kennedy, his primary concern was the expansion of coverage, and his speeches and statements indicate little consideration for the long-run cost effectiveness of a broad-based health insurance program for elders.
In fact, public opinion was largely in favor of Medicare, as it has been since the program’s inception. This likely reduced the pressure on Johnson and other leaders to discuss the more long-term effects of such a massive expansion in public welfare expenditures. Also notable, was Johnson’s creation of a commission to identify and recommend improvements to the welfare system. The establishment of “expert” commissions would be a hallmark of future presidential endeavors to reform welfare, and likely reflected both a growing faith in technical expertise and the increasing importance of creating quantifiable metrics for justifying policy decisions.
President Johnson’s passage of Medicare can thus broadly been seen from two perspectives. First, it was largely successful in its stated objective of protecting vulnerable elderly populations from destabilizing healthcare costs. It has improved health outcomes and increased standards of living. However, a more recent perspective emphasizes the high long-run costs to society, particularly to future generations, of these benefits. The problem of increasing present consumption at the expense of future investments would henceforth be a prominent issue for leaders on both sides of the political spectrum.
[1] Statement by the President Upon Making Public the Report of the President’s Council on Aging, February 9, 1964.
[2] Special Message to Congress on the Nation’s Health, February 10, 1964.
[3] Remarks to the Members of the President’s Council on Aging, February 16, 1965.
[4] Ibid.
[5] Remarks Upon Presenting a Social Security Check to the 20 Millionth Beneficiary, May 5, 1965.
[6] Remarks with PResdient Truman at the Signing in Independence of the Medicare Bill, July 30, 1965.
[7] Statement by the President Upon Signing the Social Security Amendments and Upon Appointing a Commission to Study the Nation’s Welfare Programs, January 2, 1968.
[8] Ibid., pg. 3.
[9] Berkowitz, Edward D. America’s Welfare State: From Roosevelt to Reagan. Johns Hopkins University Press, 1991.
Questions for Readers:
ReplyDelete1) President Johnson's passage of Medicare is often cited as an example of a domestic policy agenda success. In light of the present challenges associated with Medicare, is that still a fair verdict?
2) Is there a demonstrable partisan divide over protecting human dignity vs. promoting efficiency? Are presidents today more bound to chart a central, moderate course than presidents like Johnson?
Overall, this is another good entry. Note that Medicare bill as passed was broader than the administration's proposal, including physician's fee coverage and coverage for the poor (Medicaid). This again shows the importance of Congress. As the entry suggests, here we see the breakdown of the concern with long-range cost that I mentioned in my comment on the previous entry. Does this undercut the success of the program? It certainly sets the stage for the current issues, but I think it has to be placed within the wider context of the problems with the health care system: Medicare's cost problems are one and the same as the wider cost problems of the system, largely because it was built on the model of the existing health care delivery and finance system. If there's a failure, it's in this wider problem. In addition, I suppose an argument might be made that providing viable coverage for the most vulnerable group reduced pressure for a more comprehensive solution to the systematic problems of health care.
ReplyDeleteOne other thing to note: I wouldn't overstate the leftism of LBJ, as the second question implies. This is a fairly presentist view, accepting our current view of what is liberal, moderate, or conservative. In his time, LBJ was a relatively centrist Democrat, and in some respects, quite conservative. Also, remember that the Republican Party was very different at the time as well (i.e., they still had moderates and liberals).
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