Medicare

Medicare constitutes a federally sponsored program that provides health insurance to the elderly and the poor in an effort to protect them from the financial ruin of health care bills.

President Harry S. Truman first promoted a national comprehensive health insurance program during his tenure. Truman gave his presidential endorsement in 1945, but the proposal was continually rejected until Lyndon B. Johnson took office in 1964.

For many years, Congress was simply not interested in a health care program for the elderly. Even so, in 1952, some congressmen began to introduce measures they knew had no chance of passage as a way of keeping the idea alive. They found continued resistance from members of Congress and the public, who believed that health insurance should be dealt with at the state, and not the federal, level. They also faced the opposition of the American Medical Association, which claimed that any such program amounted to socialized medicine.

A 1963 survey by the government paved the way for support for a medical aid program. It showed that nearly half of the elderly in the United States had no type of health insurance at all.

There were two issues that needed to be resolved in order for a health insurance bill to be passed: eligibility and coverage. Congressman Wilbur Mills, a Democrat from Arkansas, found the way to solve both these problems in order for Congress to pass Medicare. He decided that Medicare would allow those elderly 65 and over who were eligible to receive Social Security or Railroad Retirement benefits to obtain health insurance under Title XVIII of the Social Security Act. He also decided that Medicare would be divided into two main parts. The first part provided hospital insurance, covering hospital and nursing care. The second part dealt with supplemental medical insurance, covering physician, outpatient, and ambulatory services. Such services as preventive services, dental care, eye care, and prescription drugs were not covered under Medicare. These could be covered under a companion Medicaid program that catered to the needs of the poor. Congress agreed on these terms, and the House of Representatives passed the bill by a 307 to 116 vote, while the Senate passed it the next day with a vote of 70 to 24. The program became law as part of the amendments to the Social Security Act of 1935 when Johnson, as part of his Great Society programs, signed the legislation on July 30, 1965.

Physicians, like patients, were uncertain about just how the Medicare program would work. They were worried about the amount that they charged their patients, because the Medicare program was going to codify and freeze their definitions of reasonable charges. As a result, physician fees more than doubled in the year preceding the enactment of Medicare. The overall service charge of hospitals also increased by 21.9 percent in the first year of Medicare’s operation.

Medicare covered all expenses during a patient’s first 60 days of hospitalization, and a portion of the cost for an additional 30 days. The insurance covered a room accommodating two to four beds, drugs while a patient was hospitalized, and other supplies and services. Once released from the hospital, the patient was not charged the first 20 days of an extended-care facility. The patient was allowed unlimited free visits from nurses for up to one year after discharge from the hospital or extended-care facility.

Medicare continued to develop with the passage of an amendment in 1972 that allowed people who were disabled also to receive assistance.

Further reading: Theodore R. Marmor, The Politics of Medicare (Chicago: Aldine, 1973); Monte M. Poen, Harry S. Truman versus the Medical Lobby: The Genesis of Medicare (Columbia: University of Missouri Press, 1979).

—Megan D. Wessel