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’s 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’s presidency Congress enacted the Kerr-Mills bill for cases of “medical indigency,” 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. “Perhaps a man who has spent much of his life fighting off the effects of illness,” he once wrote, “acquires…an understanding of the importance of professional health care to all people.”
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’s opponents prevailed, narrowly defeating the bill in 1962. It was reintroduced in 1963, and following Kennedy’s assassination, Anderson worked painstakingly to build solid, bipartisan Senate support. Under intense pressure Anderson’s 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’s 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 “three layer cake” of coverage: hospital insurance for the aged, physicians’ insurance for the elderly, and expanded federal assistance to supplement state medical payments for the poor. In recognition of Anderson’s efforts, President Johnson invited him to attend the Medicare signing ceremony in Independence, Missouri, with former president Harry Truman.
On July 30, 1965, President Lyndon B. Johnson signed the Medicare and Medicaid Act, also known as the Social Security Amendments of 1965, into law. It established Medicare, a health insurance program for the elderly, and Medicaid, a health insurance program for people with limited income.
In 1965, the passage of the Social Security Amendments, popularly known as Medicare and Medicaid, resulted in one basic program of health insurance for persons aged 65 and older, and another program providing health insurance for people with limited income funded by state and federal sources, respectively. It was funded by a tax on the earnings of employees, matched by contributions by employers, and was well received. In the first three years of the program, nearly 20 million beneficiaries enrolled in it.
Debate over the program actually began two decades earlier when President Harry S. Truman sent a message to Congress asking for legislation establishing a national health insurance plan. At that time, vocal opponents warned of the dangers of “socialized medicine.” By the end of Truman’s administration, he had backed off from a plan of universal coverage, but administrators in the Social Security system and others began to focus on the idea of a program aimed at insuring Social Security beneficiaries whose numbers and needs were growing.
The 1950 census showed that the aged population in the United States had grown from 3 million in 1900 to 12 million in 1950. Two-thirds of older Americans had incomes of less than $1,000 annually, and only one in eight had health insurance. Between 1950 and 1963, the aged population grew from about 12 million to 17.5 million, or from 8.1 to 9.4 percent of the U.S. population. At the same time, the cost of hospital care was rising at a rate of about 6.7 percent a year, several times the annual increase in the cost of living, and health care costs were rapidly outpacing growth in the incomes of older Americans.
Private insurers had long considered this illness-prone population a "bad risk.” A broad debate about the need for a social insurance program to provide older Americans with reliable health care coverage started within the Social Security Administration and in Congress. Public hearings were held, and the House of Representatives considered several proposals, but the debate did not intensify until 1960, when it became clear that private insurers were becoming increasingly incapable of providing comprehensive, affordable health care coverage to the rapidly growing population of older adults. Between 1960 and 1965, the health coverage debate was a front burner issue in Congress, with dozens of proposals introduced and testimonies given by representatives of major organizations, including the American Hospital Association, the American Medical Association, and the AFL-CIO.
After Congress passed the legislation in the summer of 1965, President Lyndon Johnson decided to sign the bill with former President Truman at the Truman Presidential Library in Independence, MO, in order to recognize Truman’s early effort to establish a national health insurance program. On July 30, 1965, Air Force One departed for Missouri with the President; Mrs. Johnson; George Meany, president of the AFL-CIO; Secretary of Health, Education and Welfare Anthony Celebrezze; Governor John Connally of Texas; 13 U.S. Senators; and 19 U.S. Representatives. President Johnson and his party were met by President and Mrs. Truman at the Truman Library in Independence. They visited for some time before moving on to the platform in the auditorium of the library for the bill signing. After some brief remarks, President Johnson signed into law the Medicare Social Security Amendments. Johnson gave the first souvenir pen to Mrs. Truman and the next to President Truman and then the remainder of the pens to guests on the platform.
TITLE XVIII—HEALTH INSURANCE FOR THE AGED SEC. 1801. Prohibition against any Federal interference. SEC. 1802. Free choice by patient guaranteed.
SEC. 1808. Option to Individuals to obtain other health insurance protection.
PART A—HOSPITAL INSURANCE BENEFITS FOR THE AGED SEC. 1811. Description of program. SEC. 1812. Scope of benefits. SEC. 1818. Deductibles and coinsurance. SEC. 1814. Conditions of and limitations on payment for services. (a) Requirement of requests and certifications. (b) Reasonable cost of services. (c) No payments to Federal providers of services. (d) Payments for emergency hospital services. (e) Payment for Inpatient hospital services prior to notification of noneligibility. (f) Payment for certain emergency hospital services furnished outside the United States. SEC. 1815. Payment to providers of services SEC. 1816. Use of public agencies or private organizations to facilitate payment to providers of services.
SEC. 1817. Federal hospital insurance trust fund.
PARTT B—SUPPLEMENTARY MEDICAL INSURANCE BENEFITS FOR THE AGED SEC. 1831. Establishment of supplementary medical insurance program for the aged. SEC. 1832. Scope of benefits. SEC. 1838. Payment of benefits. SEC. 1834. Limitation on home health services. SEC. 1885. Procedure for payment of claims of providers of services. SEC. 1886. Eligible individuals. SEC. 1887. Enrollment periods. SEC. 1888. Coverage period. SEC. 1889. Amounts of premiums. SEC. 1840. Payment of premiums. SEC. 1841. Federal supplementary medical insurance trust fund. SEC. 1842. Use of carriers for administration of benefits. SEC. 1848. State agreements for coverage of eligible individuals who are receiving money payments under public assistance programs.
SEC. 1844. Appropriations to cover Government contributions and contingency reserve.
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TITLE I—HEALTH INSURANCE FOR THE AGED AND MEDICAL ASSISTANCE
SHORT TITLE
SEC. 100. This title may be cited as the "Health Insurance for the Aged Act".
PART l—HEALTH INSURANCE BENEFITS FOR THE AGED
ENTITLEMENT TO HOSPITAL INSURANCE BENEFITS
SEC. 101. Title II of the Social Security Act is amended by adding at the end thereof the following new section:
"ENTITLEMENT TO HOSPITAL INSURANCE BENEFITS
"SEC. 226. (a) Every individual who— " (1) has attained the age of 65, and " (2) is entitled to monthly insurance benefits under section 202 or is a qualified railroad retirement beneficiary, shall be entitled to hospital insurance benefits under part A of title XVIII for each month for which he meets the condition specified in paragraph (2), beginning with the first month after June 1966 for which he meets the conditions specified in paragraphs (1) and (2). "(b) For purposes of subsection (a)— "(1) entitlement of an individual to hospital insurance benefits for a month shall consist of entitlement to have payment made under, and subject to the limitations in, part A of title XVIII on his behalf for inpatient hospital services, post-hospital extended care services, post-hospital home health services, and outpatient hospital diagnostic services (as such terms are defined in part C of title XVIII) furnished him in the United States (or outside the United States in the case of inpatient hospital services furnished under the conditions described in section 1814(f) ) during such months except that (A) no such payment may be made for post-hospital extended care services furnished before January 1967, and (B) no such payment may be made for post- hospital extended care services or post-hospital home health services unless the discharge from the hospital required to qualify such services for payment under part A of title XVIII occurred after June 30, 1966, or on or after the first day of the month in which he attains age 65, whichever is later; and
"(2) an individual shall be deemed entitled to monthly insurance benefits under section 202, or to be a qualified railroad retirement beneficiary, for the month in which he died if he would have been entitled to such benefits, or would have been a qualified railroad retirement beneficiary , for such month had he died in the next month.
" (c) For purposes of this section, the term 'qualified railroad retirement beneficiary' means an individual whose name has been certified to the Secretary by the Railroad Retirement Board under section 21of the Railroad Retirement Act of 1937. An individual shall cease to be a qualified railroad retirement beneficiary at the close of the month preceding the month which is certified by the…