SELLING MEDICARE, FORGETTING MEDICAID
1960-1967
by
Stephen George Anastos, Jr.
A thesis submitted to the
Department of History
in partial fulfillment of
the requirements for the
Degree of Bachelor of Arts
with Honors
Harvard University
Cambridge
Massachusetts
10 March 2011
TABLE OF CONTENTS
INTRODUCTION: SELLING MEDICARE, FORGETTING MEDICAID
1
MY GOD, YOU CAN’T TREAT GRANDMA THIS WAY!
11
WRETCHEDNESS OF GOLDEN YEARS
NO CONSENSUS ON A CURE
THIS IS NOT A RARE CASE
FROM JFK TO LBJ
12
16
21
28
BY NO-WAYS AND BY NO-MEANS
31
THE MOST POWERFUL MAN IN WASHINGTON
WELL, GRIND SOMETHING OUT OF THERE
PEACE, PROSPERITY, AND MEDICARE
TAKE IT TO THE PEOPLE
32
41
47
55
A REAL COMPREHENSIVE BILL
58
WILD-EYED RADICALS
THERE’S A READY DEMAND, AND I KNOW IT!
A RUBBERSTAMP OPERATION
ICING ON THE CAKE
59
64
69
84
THE SLEEPER
90
A NEW CONCEPT OF MEDICAL CARE
NEW YORK STATE DROPPED THE BOOM
NATIONWIDE STORM LOOMS ON SOCIALIZED MEDICINE
ALLERGIC TO WORK?
92
97
101
106
CONCLUSION: THE IMMUTABLE POLITICAL LAW
116
BIBLIOGRAPHY
120
KEY TERMS AND PEOPLE
Because of the many names and pieces of legislation being discussed in the following chapters, it seems
useful at this time to include a quick reference list of the main characters and bills which form the bulk of
the analysis and narrative of this thesis.
Lyndon B. Johnson, President of the United States, 1963-68
Wilbur Mills, Democratic Congressman from Arkansas and Chair of the US House
Committee on Ways and Means (chief architect of Medicare and Medicaid)
Wilbur Cohen, Assistant Secretary of the Department of Health, Education and Welfare
Larry O’Brien, top Democratic Party strategist and the Special Assistant to the President
for Congressional Relations.
Carl Albert, Democratic Congressman from Oklahoma and House Majority Leader
IMPORTANT LEGISLATION:
Kerr-Mills Act - original bill sponsored by Wilbur Mills in 1960 as a compromise alternative to Medicare,
which gave states limited aid for healthcare; an embryo for what was to become Medicaid.
Kerr-Mills Expansion/Title 19 (of the Social Security Act of 1965) – later dubbed ‘Medicaid,’ this built
on the Federal-State benefits given the elderly poor in 1960. The AMA proposed a version of this, called
Eldercare, in 1965. Ultimately, Wilbur Mills combined it with Medicare and another Republican proposal.
Medicare, medical benefits for the elderly, financed through Social Security. Benefits for all elderly
Americans, regardless of income—a key difference from Kerr-Mills.
H.R. 1 – King-Anderson – the Medicare proposal the Johnson Administration favored in 1964 and the
first legislation introduced in 1965. The bill funded Medicare through Social Security payroll taxes, the
most liberal method discussed.
H.R. 6675 (Social Security Act of 1965), the bill that passed, containing Medicare (Parts A and B),
Medicaid and further Social Security cash benefit increases.
INTRODUCTION
SELLING MEDICARE, FORGETTING MEDICAID, 1960-1967
“It is clear now that no one realized just how sweeping it really was,” admitted
Massachusetts Senator Leverett Saltonstall on the floor of the Senate in August of 1966.1
“There was little discussion of Title 19, which certainly has proved to be the ‘sleeper’ in
the bill. I am certain that no one dreamed that within the next 5 years, ‘Medicaid,’ as the
program established by that title is called, could come to dwarf Medicare.”2
Little more than a year earlier, President Lyndon B. Johnson had signed the Social
Security Amendments of 1965 into law. The omnibus bill created Medicare—a
combination of two proposals that provided health care to nearly all Americans over
sixty-five. Medical care for the aged had been debated for over a decade, and Medicare
would finally provide financial security to America’s elderly, no longer at risk of
devastating hospital and doctors’ bills. The Amendments also created Title 19—what
would later become known as Medicaid—a joint Federal-State program that offered
health benefits to needy children and their families, the needy aged, blind, and disabled.
At the time of the signing, though, few took notice. The measure was added to the
omnibus bill at the last minute, and Congress barely debated it before passage. Thus, a
year after its creation, Senators like Saltonstall wondered how Congress could have
missed Title 19’s potential for growth. By the time Saltonstall took the rostrum on the
!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!
1
2
U.S. Congress, Congressional Record 112 (8/22/1966): 20267.
Ibid., 20267.
floor of the Senate, Medicaid was just nine months old and was projected to cover 8
million Americans at a cost of $3 billion annually—15 times the budgeted amount and
more than its highly publicized twin Medicare.3 Both New York and California had
surpassed the expected total cost on their own. This thesis will seek to answer the
following questions: why did Medicaid receive so little attention? If it had been added on
at the last minute, who were its advocates? How did such a measure go unnoticed in
Congress? What conditions allowed for the program’s passage?
Since its creation in 1965, Medicaid has grown to cost an estimated $275 billion
annually, with nearly 60 million poor Americans receiving its benefits.4 The massive
program, along with its relatives Medicare and Social Security, has generated a fair
amount of scholarship that tackles the subject from many different angles. For the
purposes of this thesis, three categories of work are most important.
The first significant segment of the historiography examines the subjects of Social
Security and welfare benefits with respect to race and gender. These works seek to
understand the inequalities buried within the systems and policies, and how those
inequalities affect the beneficiaries. Mary Poole’s The Segregated Origins of Social
Security describes the way in which FDR’s administration channeled African Americans
away from programs designed for workers—like Social Security’s Old Age Survivors
!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!
3
The House Committee on Ways and Means originally estimated that Title 19 would cost $200 million per
year, using a “very conservative” estimate. U.S. Congress, House Committee on Ways and Means, Social
Security Amendments of 1965, 89th Cong., 1st sess., H.rpt. 213, 1965, 75.
4
In 2014, President Barack Obama’s Patient Protection and Affordable Care Act will widen Medicaid
eligibility and offer coverage to an estimated 16 million more people. The Kaiser Commission on Medicaid
and the Uninsured, “Medicaid Matters: Understanding Medicaid’s Role in Our Health Care System,” The
Henry J. Kaiser Family Foundation, March 2011, http://www.kff.org/medicaid/upload/8165.pdf.
2
Insurance—and onto public assistance rolls.5 Jill Quadagno’s The Color of Welfare
shows how New Deal social spending programs maintained racial segregation; while
Johnson’s War on Poverty attempted to remedy this inequality, the government
ultimately backed off the task following a conservative backlash in the late 1960s and
thereafter, leaving the job unfinished and the programs vulnerable to dismantling.6 Linda
Gordon’s Pitied But Not Entitled analyzes the way gender affected different approaches
to social policy, discussing the stigma of welfare and the distinction between earned,
legitimate benefits like Social Security and assistance programs like Aid to Families with
Dependent Children.7 Alice Kessler-Harris similarly sees direct links between traditional
conceptions of gender and the resultant policy in her work In Pursuit of Equity.8 All of
these works—and others—contribute to an examination of the underlying injustices built
into public relief and social insurance programs based on class, race and gender.9 They
challenge the conservative notions of a culture of poverty that impacted the development
of programs like Medicaid and other public assistance programs, and open discussions
about the stigma of welfare, racism and sexism inherent to it.
!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!
5
Mary Poole, The Segregated Origins of Social Security: African Americans and the Welfare State (Chapel
Hill: University of North Carolina Press, 2006).
6
Jill S. Quadagno, The Color of Welfare: How Racism Undermined the War on Poverty (Oxford: Oxford
University Press, 1994).
7
Linda Gordon, Pitied But Not Entitled: Single Mothers and the History of Welfare, 1890-1935 (New
York: Free Press, 1994).
8
Alice Kessler-Harris, In Pursuit of Equity: Women, Men, and the Quest for Economic Citizenship in 20th
Century America (Oxford: Oxford University Press, 2001).
9
See also: Premilla Nadasen, Welfare Warriors: The Welfare Rights Movement in the United States (New
York, NY: Routledge, 2005); Blanche D. Coll, Safety Net: Welfare and Social Security, 1929-1979 (New
Brunswick, NJ: Rutgers University Press, 1995); and Diana Pearce, "Welfare Is Not for Women," ed. Linda
Gordon, in Women, the State, and Welfare (Madison, WI: University of Wisconsin Press, 1990).
3
The second group of relevant work examines the broader roots of welfare
medicine and the American healthcare system. Edward Berkowitz’s America’s Welfare
State: from Roosevelt to Reagan traces changes in policy and proposals throughout the
20th century from the perspective of the Social Security Administration, with emphasis on
the failure of Medicaid rehabilitation efforts in ending public assistance dependency.10
Paul Starr’s The Social Transformation of American Medicine tracks the rise of a
powerful profession.11 He documents the making of the medical industry and shows the
way that power influenced the health care system America has today. Monte Poen’s
Harry S. Truman versus the Medical Lobby provides a glimpse of the manifestation of
power that Starr presents.12 Jonathan Engel, in his Poor People’s Medicine, argues that
Americans have been largely ambivalent about bringing the poor into the mainstream
health system, citing the inability of Americans to reach an ideological consensus on
fundamental reform as the reason compromise measures like Medicare and Medicaid are
what we have today.13
Finally, a third category examines the legislation itself from a more detailed
perspective. Because Medicaid was such a low profile proposal—a “sleeper” as
Saltonstall put it—histories that focus on its long-term and ideological roots do not
complete the story. These works pay little attention to the immediate internal and
!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!
10
Edward D. Berkowitz, America's Welfare State: from Roosevelt to Reagan (Baltimore: Johns Hopkins
University Press, 1991).
11
Paul Starr, The Social Transformation of American Medicine (New York, NY: Basic Books, 1982).
12
Monte M. Poen, Harry S. Truman Versus the Medical Lobby: the Genesis of Medicare (Columbia:
University of Missouri Press, 1979).
13
Jonathan Engel, Poor People's Medicine: Medicaid and American Charity Since 1965 (Durham, NC:
Duke University Press, 2006).
4
external forces that brought Medicaid to life, neglecting an important part of the story.
Rosemary Stevens and Robert Stevens’ Welfare Medicine in America: A Case Study of
Medicaid, sheds considerable light on the development of Medicaid, on its way to
analyzing the bill’s provisions and their impact.14 They analyze Medicaid as legislation,
contrasting its poor and hasty construction with the careful crafting of Medicare. These
differences in foresight and planning led to opposite experiences in implementation for
the two measures, they say. Medicare rolled out smoothly through an organized and
experienced Social Security Administration, while state legislators struggled to plan
Medicaid programs for their constituents.15 While this 1974 study is still of paramount
importance, the authors’ preference for and expectation of a universal health insurance
system detracts from their discussion of Medicaid’s roots. Moreover, the authors were
not afforded access to the Johnson presidential recordings, the release of which was
recently completed in 2008. Sheri David’s With Dignity: The Search for Medicare and
Medicaid also describes with great detail the legislative process that led to the Social
Security Amendments of 1965, balancing the interests of social insurance advocates and
fiscal conservatives inside Congress, and labor and organized medicine outside it.16
David sees Medicare and Medicaid come to life in a spur of the moment compromise,
orchestrated by a single Committee Chairman at the final hour. However, without access
!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!
14
Robert B. Stevens and Rosemary Stevens, Welfare Medicine in America: a Case Study of Medicaid (New
Brunswick (U.S.A.): Transaction, 2003).
15
Medicaid’s implementation requires each individual state in the union to craft its own approach to the
program, as well as provide a percentage of the funding for it.
16
Sheri I. David, With Dignity: the Search for Medicare and Medicaid (Westport, CT: Greenwood Press,
1985).
5
to the LBJ presidential recordings, David’s story is incomplete, as she fails to see the
motivations for such a combination, both from the President and from Congressional
leaders.
While it has benefitted greatly from these works and many more, this thesis
makes significant contributions to the history of Medicare and Medicaid. First, it brings
the importance of Lyndon Johnson’s 1964 presidential campaign into the discussion of
Medicare’s creation, a task that helps explain the subsequent inclusion of Medicaid in
1965. Certainly, Johnson wanted to help the elderly. But more than anything, the
President’s pursuit of a program he could call “Medicare” was motivated by his
upcoming presidential election, and a fear of white backlash against Civil Rights and the
War on Poverty in it. A union-supported Medicare program that would predominately
benefit white Americans was appealing as a way to balance these polarizing initiatives.
At the time, Medicare was a tremendously popular brand, as Johnson learned on the
campaign trail and in the polls.
The label “Medicare” is paramount to this revision. This thesis examines the
importance of the label “Medicare” itself, and the rhetoric surrounding the concept. The
central role of “Medicare” in Johnson’s campaign led one reporter to believe that “a vote
for Johnson or Goldwater is a directive one way or another on Medicare.”17 By pushing
for passage of the program before the election and stressing Medicare on the campaign
trail, the President turned his ticket into a referendum on Medicare. The President and
!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!
17
Frank Harris, “The Senior Set,” Boston Globe (1960-1979), Nov 1, 1964, ProQuest Historical
Newspapers Boston Globe (1872 - 1979), pg. 46.
6
Democrats viewed their subsequent landslide victory as a mandate by the people for
Medicare. What exactly “Medicare” meant, though, was unclear throughout the campaign
and for most of the years preceding it.
In 1964, on the phone and behind the scenes, Johnson begged Chairman of the
House Committee on Ways and Means Wilbur Mills for one of a number of Medicare
proposals, and was even open to the congressman developing his own. Johnson just
wanted something he could call “Medicare.” Following the sweeping November ’64
election of Johnson and a strongly Democratic Congress, Mills agreed in 1965 that action
would have to be taken on Medicare, and the President handed him the reins. Medicare
had become an umbrella, a blanket term applied to a number of proposals. The
flexibility—and opacity—of the term Medicare itself allowed for inclusion of several
other measures, Medicaid being one of them. The omnibus Social Security Amendments
of 1965—containing far more than just hospital insurance for the elderly—were still
called collectively “Medicare” after passage.18
In Congress, the ostensible electoral mandate coupled with the ambiguity of the
actual legislative details, allowed for Medicaid’s inclusion and creation under the
umbrella term Medicare, without much actual consideration. The fact that Medicaid was
not called by that name until the middle of 1966 certainly contributed to its obscurity.19
During the debate of the omnibus bill in the Congress, Medicaid was referred to as an
!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!
18
Newspapers often referred to the entire bill as “Medicare,” despite the fact that it contained several
different provisions other than healthcare for the elderly through Social Security.
19
The term “Medicaid” first began appearing in Congress and in newspapers in June of 1966.
7
expansion of the already existent Kerr-Mills Act—a program enacted in 1960 as an
alternative to Medicare that had largely been a disappointment. Once enacted,
Medicaid’s designation went from “Kerr-Mills expansion” to the equally nondescript
“Title 19.” These terms were hardly mentioned during Congressional debate. Votes had
been decided long before Congressmen took the floor, on the basis of whether or not
“Medicare” was included. Medicaid was less than an afterthought.20
By examining the role of the 1964 campaign, the rhetoric surrounding
“Medicare”—both positive and negative—and the inner-workings of Congress and the
White House, this thesis will show how Medicaid quietly came to be. In doing so, it
employs a broad range of sources. For an understanding of President Johnson and the
politics behind the Social Security Amendments of 1965, the thesis utilizes the
Presidential Recordings. Like John F. Kennedy before him, Lyndon Johnson secretly
recorded many of his telephone conversations and meetings. These recordings total over
642 hours. The LBJ Library at the University of Texas began slowly releasing the tapes
in 1993, a project that the staff completed in 2008. As a result, the historian is granted
access to the President’s daily activities, and is able to hear candid strategic conversations
!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!
20
Tangentially, the thesis will touch upon the difference between welfare programs and Social Security,
which operate under distinct ideologies of charity and insurance, respectively. This difference undoubtedly
played a role in the developments of 1965, with Medicare as a member of the latter group. The ability to
dress Medicare’s benefits up as pre-paid insurance claims factored enormously in its political popularity.
8
with top personnel.21 To round out the development of the legislation, the thesis makes
extensive use of the Congressional Record—a transcript of all debate on the floor of the
House and Senate—committee hearings and prints, and other historical legislative
documents. This source base sheds light on the inner-workings of Committees and on the
public importance congressmen ascribed to each legislative initiative with comments in
the official record. To capture the reception of the White House and Congress’ actions,
the thesis uses historical newspapers, such as The New York Times, The Washington Post,
The Wall Street Journal, and the Los Angeles Times, among others. In doing so, the
thesis documents the public discourse on the subject of Medicare and Medicaid, and
outlines the attention Medicare received on the campaign trail and more generally.
Finally, to analyze how the White House sold the measure to the public, the thesis will
use public presidential speeches and remarks. By using this broad base of sources, the
present study attempts to understand the development of the Social Security Amendments
of 1965 from a number of angles, both inside the White House and Congress and on the
doorsteps, radios, and televisions of millions of Americans.
!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!
21
Researchers at the Center for the Study of the Presidency and Congress conducted a study on the
comprehensiveness of Johnson’s recordings. By cross-checking the conversations that Johnson recorded
with the ones listed in the Presidential Diary kept by his secretaries, the researchers were able to see how
representative the sample of conversations Johnson recorded is of his daily activities. They categorized the
contacts Johnson spoke to, and the frequency with which he recorded conversations with that category—the
point being to understand what kinds of conversations he was recording more or less of, relative to their
share of all his contact. “So, we can conclude that, with some minor adjustments, the recorded
conversations present a reasonable representation of the larger segment of phone conversations.” Terry
Sullivan, Jennifer Hora, Luke Keele, Todd McNoldy, and Gregory Pitts, “Source Material: Presidential
Recordings as Presidential Data: Assessing LBJ’s Presidential Persuasive Attempts,” Presidential Studies
Quarterly, Vol. 29, No. 4, December, 1999, p931-942. http://www.jstor.org/stable/27552058.
9
The first chapter will provide a background of legislative and social changes
leading up to the 1960s. It will then examine the public discourse between pro- and antiMedicare groups, chiefly analyzing the rhetoric of the American Medical Association’s
at-all-costs campaign to stop the beginning of “socialized medicine”—much of which is
still employed today by other opponents—and culminating in the passage of Medicare
and Medicaid. Chapter two will return to 1964 and document the Johnson
administration’s first attempt to pass Medicare, focusing on the internal happenings in the
White House and Congress. It will lead up to the Senate’s first passage of Medicare, and
the House’s subsequent rejection of it, ending with the November 1964 elections. The
third chapter will work through passage of Medicare in 1965, after the Democrats’
electoral gains and Johnson’s utter defeat of Barry Goldwater. Finally, the fourth chapter
will examine the reception of Medicaid in the public, the press and in Congress, finishing
with the Social Security Amendments of 1967, which trimmed back Medicaid just two
years after its creation.
Ultimately, this thesis seeks to understand how a program so fundamental and
important could be enacted with so little discussion and fanfare. Medicaid has, since
1965, caused headaches for thousands of welfare administrators, members of Congress,
Governors, and doctors. At the same time, it has granted millions of Americans access to
mainstream healthcare. Yet when it was enacted in 1965, no one understood its potential
to become so controversial.
10
CHAPTER ONE
“MY GOD, YOU CAN’T TREAT GRANDMA THIS WAY!”
When asked by his press secretary how to justify retroactive Medicare benefits,
President Lyndon B. Johnson outlined his position on spending and Medicare much more
generally. Speaking of those who would benefit, Johnson showed his compassion, and
illustrated his justification for an expansionary policy that would grow to occupy over
twenty percent of the United States Federal budget:
None of them ever get enough. And they’re entitled to it, and that’s an
obligation of ours…I think that’s a much better reason [to spend] and a
much better cause and I think it can be depended on a hell of a lot better
basis. I don’t think that you ought to testify just shoveling money out on
the economy—I think we do know that it affects the economy and it helps
us in that respect. But that’s not the basis to go to the Hill or the
justification. We just gotta say that, ‘My God, you can’t treat Grandma
this way! She’s entitled to it, and we promised it to her!’ We held it up
last year, and we’re committed and we’re obligated.1
While these private feelings were expressed with unlimited candor, Johnson’s
justification summarizes the way both he and John Kennedy approached passing
Medicare—along lines of earned rights and obligation to elders. Throughout years of
campaigning for federal medical coverage for the aged, Democrats sold the program by
appealing to a sense of responsibility for a helpless population—a population that
deserved dignity in their age. This chapter will attempt to outline the terms of the debate,
and understand how, from World War II to 1964, a need for medical care—and a
willingness to meet that need—gained momentum.
!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!
1
Telephone Conversation between Lyndon Johnson and Bill Moyers, 3/10/1965, Tape WH6503.05,
Program No. 2, Citation No. 7051, Johnson Tapes: Telephone Series, Presidential Recordings Program,
Miller Center of Public Affairs, University of Virginia, http://whitehousetapes.net/tapes/johnson/telephone.
“THE WRETCHEDNESS OF GOLDEN YEARS”
Following World War II, American healthcare underwent drastic changes on
multiple levels that would fundamentally alter what treatments existed, who administered
those treatments and where, who received care, and how it was paid for. In the years
from 1940 to 1965, a need for government assistance arose in response to a changing
medical landscape.2
First, and most importantly, medicine’s capabilities had grown profoundly.
Starting with the discovery and mass production of penicillin, the “green-mold miracle
drug,” as The Washington Post called it in 1944, medicine advanced rapidly.3 Whereas
once doctors had a limited arsenal in combating even the simplest maladies, new
discoveries now brought hope for treating tuberculosis, influenza, malaria, polio, and a
host of other illnesses. Death rates from heart disease and stroke had declined rapidly,
and research was underway on organ transplants and brain tumors. The possibilities
seemed endless.4
With increasing possibilities came increasing costs. Government funding for
research and hospital construction rose. Between 1941 and 1951, for example, the
!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!
2
For more on the drastic changes in medicine over the course of the 20th century, see Paul Starr, The Social
Transformation of American Medicine (New York, NY: Basic Books, 1982); Jonathan Engel, Poor
People's Medicine: Medicaid and American Charity Since 1965 (Durham, NC: Duke University Press,
2006).
3
Walter Wood, “Penicillin Groups Of 3 Nations Meet To Fix Standard,” The Washington Post (19231954), Feb 20, 1944, ProQuest Historical Newspapers, The Washington Post (1877 - 1994), pg. M1.
4
Paul Starr, The Social Transformation of American Medicine (New York, NY: Basic Books, 1982), 335379.
12
federal budget for medical research went from just $3 million to $76 million.5 By 1960,
the National Institute for Health enjoyed a $400 million budget.6 As an industry, health
care had grown to $33 billion by 1964, triple its level in 1949.7
The 1946 Hill-Burton Act channeled billions of dollars to construction of new
hospitals. Accordingly, medical practice shifted from the home to the hospital. The
percentage of institutionally-employed physicians rose from 12.8 to 26.5 percent between
1940 and 1957.8 Doctors in private practice declined in relation to population as a whole,
down from 108 to 91 per 100,000 people.9 This concentration of medical service
fundamentally changed the way doctors practiced medicine. Instead of physicians
making house call after house call, patients came in and out of hospitals and doctors’
offices—as a result, the average physician in 1950 saw over one hundred patients a week,
double the 1930 amount.10 Centralization of this care in hospitals increased access to it.
Of course, hospitals were not just sources of everyday care and treatment for
common disease. Instead, they made breakthroughs in more intensive services like
transplants and trauma care. With the increase in intensity came a rise in costs,
demanding more from patients financially. Not only were hospital bills expensive, they
were also volatile, a condition that insurance could mediate. Regular premium payments
for an insurance plan could smooth the cost of a single intensive treatment over years.
!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!
5
Starr, Social Transformation of American Medicine, p343.
Ibid., p347.
7
Jonathan Engel, Poor People's Medicine: Medicaid and American Charity Since 1965(Durham, NC:
Duke University Press, 2006), p1.
8
Starr, Social Transformation of American Medicine, p359.
9
Ibid., p359.
10
Ibid., p359.
6
13
Accordingly, in the fifteen years after the end of the war, the percentage of Americans
with insurance for hospital care went from 22 to 74 percent.11
The development and widespread use of new treatments coupled with access to
health insurance caused a shift in quality of life along class lines. Employer-sponsored
insurance afforded a large majority of working- and middle-class Americans the same
access to physician care as the wealthiest Americans. This left the poorest Americans in a
substantially worse position relative to the rest of the population, excluding them from
the benefits of technological advancement in healthcare.12 Whereas the rich had once
stood out for their access to care, the poor were now the outlier for their lack thereof.
Amidst these structural changes, the government began seriously considering
intervention. Improvements in care and the resulting rise in costs demanded equalizing
help from a government that spoke of access to healthcare as a right. Greatly expanding
infrastructure, especially medical schools and hospitals, gained the ability to take on
added capacity. As Paul Starr argues in his description of the rise of American medicine’s
capabilities, “This system demanded to be fed. Its representatives saw an inescapable role
for themselves in solving the problems of society. Self-interest and noble aspirations both
dictated that they begin a new chapter in the history of social reform.”13 With new
treatments and capabilities, as well as increasingly burdensome costs to patients, the
healthcare industry was ripe for government intervention.
!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!
11
Jonathan Engel, Poor People’s Medicine, p3.
Ibid., p14-15.
13
Starr, Social Transformation of American Medicine, p367.
12
14
In 1958, Aime Forand, a Congressman from Rhode Island, introduced a proposal
to cover hospital costs for the aged financed through Social Security. The modest
legislation included up to 60 days of free hospital care and 120 days of nursing home care
annually, financed through a half-percent increase in Social Security taxes.14 This was
not the first time this type of legislation had been debated—President Truman had
attempted to finance healthcare for the elderly through Social Security as well.15
Forand’s proposal, then, brought to life and renewed an older discussion. The idea
sparked much debate, with interest groups on both sides coming out strongly for or
against the bill. Of the opposition groups, the American Medical Association (AMA)
was the most prominent. The organization launched a campaign that centered on fears of
doctor-patient relationship breakdown, and devolution of the American healthcare system
into socialized medicine, warning of “destruction of the voluntary health insurance
industry.”16 Other groups were strongly for the legislation, including the powerful
American Federal of Labor and Congress of Industrial Organizations (AFL-CIO).
President Eisenhower sided with the AMA in his opposition, wary of “bringing in new
responsibilities and new expenses in the federal government.”17 The Chicago Tribune
!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!
14
Wall Street Journal (1923 - Current file), “Rep. Forand Introduces Bill for Medical Care Under Social
Security,” Feb 19, 1959, ProQuest Historical Newspapers The Wall Street Journal (1889 - 1993), pg. 7.
15
See Poen, Harry Truman versus the Medical Lobby; and Engel, Poor People’s Medicine.
16
New York Times (1923-Current file), “Health Bill Opposed: Special to The New York Times,” Oct 24,
1958, ProQuest Historical Newspapers The New York Times (1851 - 2007), pg. 14.
17
Chicago Daily Tribune (1923-1963), “A Reminder from the President,” Apr 2, 1960, ProQuest Historical
Newspapers Chicago Tribune (1849 - 1987), pg. 10.
15
went as far as complaining, “we are being asked to swallow the bitter pill of inflation in
order to promote socialism.”18
“NO CONSENSUS ON A CURE”
While parties could not agree on legislation, discussion of Forand’s bill produced
a clear consensus—the elderly needed assistance. On average, the elderly were subject to
much higher costs than the rest of the population, due to increased risk of illness.19 Every
year, one in six of those over sixty-five entered a hospital, and stayed on average twice as
long as someone under sixty-five. Moreover, hospital care had only gotten more
expensive, with prices doubling in the 1950s.20 The Washington Post ran a feature in
February of 1960 concerned with the “Wretchedness of Golden Years.”21 The article told
of the “worst imaginable kind of terminal insecurity”—that which the elderly felt on a
regular basis with regards to healthcare costs. While health insurance coverage had
expanded widely, it was less common among those over sixty-five. The elderly carried a
greater risk of illness, and were more expensive to cover. As a result, insurance
companies took greater risk in covering them, and passed that risk on in the form of
higher premiums. At the same time, retired elderly rarely had any income outside of
Social Security, and so they were less capable of affording the higher premiums. Another
!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!
18
Ibid.
Starr contends, “The turn toward the aged aroused support from a growing constituency that felt the
problem of hospital costs with unusual keenness.” Starr, Social Transformation of American Medicine,
p368.
20
Ibid., p365-370.
21
The Washington Post, Times Herald (1959-1973), “Retirement Nightmare,” Feb 20, 1960, ProQuest
Historical Newspapers The Washington Post (1877 - 1994), pg. A10.
19
16
Washington Post article, titled “Retirement Nightmare,” summarized:
How can anyone with foresight, old or young, fail to be anxious about this
problem? While a man is employed, he can enjoy the protection of some
sort of group or private insurance program to cover medical and hospital
bills if he becomes ill. The chances are, however, that when he is retired
he will no longer enjoy such protection; yet this is the time, obviously,
when he will need it most--when, indeed, he is certain to need it sooner or
later, which is what makes the cost of such private insurance prohibitively
high for the aged.22
Facing higher frequency of illness, longer hospital stays, and the reality of little to no
income, the elderly were unique in their desperate need for help in paying for health care.
More than just needing assistance, though, the unique situation of the elderly
made a healthcare plan targeting them more politically viable. For one, the elderly as a
whole were a voting bloc of over 16 million, and they were active politically.23 One 1960
New York Times article chronicled the flood of letters regarding health care coverage to
New York Senator Jacob Javits, with over 700 letters pouring in over a two week period.
Those letters ran “2 to 1 in favor of the Forand bill,” with those in favor writing “mostly
from labor unions, clubs of retired persons and retired individuals who have chronic
illnesses or have had operations.”24 Any bill assisting this large group could reap
political benefits. Moreover, their inherent helplessness appealed to a sense of
responsibility and compassion that could help justify expenditure on aid. Most people
above sixty-five could no longer work, and thus could not possibly afford their own care.
But with a life of productive work behind them, the elderly could be billed as having
!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!
22
Ibid., pA10.
US population at the time was about 180 million. Population Estimates Program, Population Division,
U.S. Census Bureau, Internet Release Date: April 11, 2000.
http://www.census.gov/popest/archives/1990s/popclockest.txt.
24
The Washington Post, “Retirement Nightmare,” pg. A10.
23
17
earned a support system. Both Democrats and Republicans shared the view that elderly
medical care was necessary. The Washington Post reported, “Both the [Eisenhower]
Administration and Congress agree in their diagnosis of medical care as the No. 1
problem of the aged, but there is no consensus on a cure.”25 The question was not
“Why?” but rather, “How?”
President Eisenhower opposed Forand’s bill for financing benefits through Social
Security payroll taxes, worried that doing so would endanger the system. Moreover, the
President, the AMA, and Republicans opposed providing benefits to all elderly
Americans, as Forand’s version of Medicare did—an idea they called “socialized
medicine.” Instead, these groups preferred a voluntary, state-run system of assistance
that would cover the only the poor elderly. With the lack of support for Forand’s bill,
Wilbur Mills, Chairman of the Ways and Means Committee, moved to break the impasse
in 1960. Mills, a Democrat, was against Forand’s bill himself and knew that the
Republican-Southern Democrat alliance would not let it pass the House. Thus, he built a
compromise plan that Republicans and the President could accept, backed by the AMA.26
Mills’ plan immediately expanded grants to states for the 2,400,000 people on old-age
assistance welfare rolls to meet medical expenses.27 It built on top of the limited existing
!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!
25
Julius Dascha, “Congress Hunts Way to Aid the Aged As Their Doctor Bills Go Up and Up,” The
Washington Post, Times Herald (1959-1973), Feb 9, 1960, ProQuest Historical Newspapers The
Washington Post (1877 - 1994), pg. B10.
26
The AMA supported the Kerr-Mills Act because it was administered through the states, where the
organization was strongest and could exert the most influence. Starr, Social Transformation of American
Medicine.
27
Social Security Online, "Chapter 4: The Fourth Round, 1957 to 1965," Social Security Administration,
http://www.ssa.gov/history/corningchap4.html.
18
benefits to the elderly on welfare—which were provided by States through public
assistance programs. Most importantly, it created a new category of “medical
indigence”—a name for the group of elderly who were not poor enough to qualify for
welfare, but could not afford health insurance. Mills’ bill extended benefits to this new
category of needy elderly under the Medical Assistance to the Aged program. States
could elect to expand their aid to those who qualified under a means test—a signed
document professing to a certain limited amount of income and savings. The Federal
government would pay for a percentage of that aid, based on the wealth of the state, from
50% to 85%. The bill passed through the Ways and Means Committee by a vote of 12 to
5, with six Republicans and six Democrats in favor.28 Backed by the AMA and
Republicans and Democrats alike, the Kerr-Mills Act—the final version of the bill—
passed in the House by a landslide vote of 381-23.29 President Eisenhower signed it into
law September 13, 1960.
Although willing to take what they could get, Democrats advocating for
assistance to the elderly—or pro-Medicare Democrats, as they became known—were
dissatisfied with the limited scope of the bill, and especially with the means test to which
its participants were subjected to. Under the preferred Forand Bill, and other Democratic
alternatives, medical care would be financed through Social Security, meaning that
anyone eligible for Social Security benefits would also receive assistance with health
!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!
28
Social Security Online, "Chapter 4: The Fourth Round, 1957 to 1965," Social Security Administration,
http://www.ssa.gov/history/corningchap4.html.
29
Ibid.
19
care. This group was not subject to a means test—meaning they did not have to declare
that they were needy. Illinois Senator Paul Douglas called Kerr-Mills “a betrayal of the
Democratic platform,” complaining that anyone receiving aid under the bill would have
“to profess he is a pauper.”30 Much of the rhetoric surrounding health care for the elderly
pertained to dignity, therefore for many Democrats, requiring a means test—essentially a
signed admission of inability to provide for oneself—contradicted the aim of the
legislation. While they were trying to extend a service to preserve the dignity of the
elderly, their Republican counterparts upended that goal by requiring a means test.
John F. Kennedy was one of those Democrats unsatisfied with the limited
coverage of Kerr-Mills, and disappointed with the included means test. During the
debate over medical care, both Kennedy and Lyndon Johnson, as Presidential and Vice
Presidential nominees for the Democratic Party, advocated the more liberal approach,
financed through Social Security. The Democratic ticket added the so-called Medicare to
its platform, and campaigned on the issue. In his famous “getting American moving
again” speech just one week before the election, Kennedy described his plan for benefits
through Social Security, and drew a difference between he and his opponent: “Mr. Nixon
leads a party in this campaign that voted 90 percent in the mid-Thirties against Social
Security itself; and in the month of August, 1960, voted 95 percent against medical care
!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!
30
New York Times (1923-Current file), “Senate Unit Acts on New Aged Bill: Special to The New York
Times,” Aug 14, 1960, ProQuest Historical Newspapers The New York Times (1851 - 2007), p42.
20
for the aged tied to Social Security.”31 The Kennedy-Johnson ticket espoused a Medicare
program from the start.
“THIS IS NOT A RARE CASE”
Kennedy’s rhetoric for Social Security-financed medical benefits focused largely
on dignity and earned rights. “I talked recently to a grandmother in Dayton, Ohio, who
could not bear to ask her children, with whom she was then living, for the $13 a week she
needed for medicine, because they were giving so much up to sustain her at that time,” he
recalled.32 In this story, Kennedy focused on the theme of dignity and helplessness. The
grandmother was already dependent upon her children, helpless on her own. In an effort
to preserve her dignity, she did not want to ask for anything more. For Kennedy, this was
a situation the government should correct—one where an elderly person’s dignity could
be preserved with state-administered medical coverage.
Throughout the fight for Medicare, Kennedy and Johnson focused on these same
themes. Their campaign for such legislation painted the elderly as a population that, on
average, teetered on the edge of bankruptcy, threatened by expensive hospital bills,
despite having led responsible and productive working lives. This rhetoric would be
instrumental in combating charges of socialized medicine leveled by the AMA and other
!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!
31
New York Times (1923-Current file), “Text of Senator Kennedy's Television Address to the Nation,”
November 1, 1960, ProQuest Historical Newspapers The New York Times (1851 - 2007), p29.
32
“Speech by Senator John F. Kennedy, Convention Hall, Philadelphia, PA, October 31, 1960,” ed. John T.
Woolley and Gerhard Peters, The American Presidency Project, Santa Barbara, CA,
http://www.presidency.ucsb.edu/ws/?pid=74316
21
similar special interest groups. Making a strong case for why the private system did not
work was paramount for the success of Medicare. In order to justify a government
intervention, private options had to be shown ineffective. Kennedy and Johnson alike did
so by portraying a responsible elderly population with no alternative but bankruptcy.
After a 1961 Medicare effort that failed to escape Committee in the House, John
F. Kennedy returned in 1962 with a greater importance on passing Medicare. In his
January State of the Union address, JFK proclaimed, “no piece of unfinished
business…[is] more important or more urgent than the enactment under the social
security system of health insurance for the aged.”33 From his State of the Union until the
bill came to a vote, Kennedy was targeted in his rhetoric. Throughout his campaign for
Medicare, the President stressed that the current system left millions of senior citizens
helpless—that the private system was incapable of insuring the elderly. Hoping to stem
cries of socialism and handouts, Kennedy insisted that the elderly had earned the security
of health benefits.
These themes are evident in Kennedy’s State of the Union address—the
beginning of his 1962 campaign for Medicare. “Our older citizens have…higher hospital
and medical bills and too little income to pay them,” Kennedy said.34 “Private health
insurance helps very few—for its costs are high and its coverage limited.”35 Here, the
President painted the elderly as helpless. They were facing extreme costs and could not
!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!
33
John F. Kennedy, “State of the Union Address, January 11, 1962.” John F. Kennedy Presidential Library
and Museum, http://www.jfklibrary.org/Historical+Resources/Archives/Reference+Desk/Speeches/.
34
Ibid.
35
Ibid.
22
afford care. Moreover—and more importantly—private insurance did not provide enough
coverage. This second point is crucial, because it established the need for government
intervention—in a situation where the private market did not provide adequate options,
government help was easier to justify. Kennedy pushed this one step further. “Public
welfare cannot help those too proud to seek relief…nor can their children always
sacrifice their own health budgets to meet this constant drain.”36 The elderly, in his
picture, had no alternatives. Insurance was not available, they did not have the savings to
cover monumental health costs, and they could not depend on the state or their children
for help.
In his most famous speech on Medicare, on May 20, 1962 in Madison Square
Garden, President Kennedy built on his State of the Union address. He opened with an
example of a “typical” case of a retired man whose wife gets sick and in the process
bankrupts him:
The husband has worked hard for his whole life and he is retired...He does
not ask anyone to care for him, he wants to care for himself. He and his
wife are drawing Social Security…and he has a pension from where he
worked, the results of years of efforts. He owns his house. He has $2500
or $3000 in the bank. And then his wife gets sick, not just for a week but
for a long time. First goes the $2500—that’s gone. Next he mortgages his
house...Then he goes to his children, who themselves are heavily
burdened, because they are paying for their house, and educating their
children, and then their savings begin to go. This is not a rare case.37
!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!
36
Ibid.
Speech transcribed by author from video: “JFK'S ‘HEALTH CARE’ SPEECH FROM MADISON SQUARE
GARDEN (5/20/62)(PART 2)” [Video] Retrieved 3/9/2011, from
http://www.youtube.com/watch?v=qOtinChQXFk&NR=1.
37
23
Kennedy very deliberately stressed the responsibility of the man in his example, assuring
his audience that the man wanted to take care of himself, and had been prudent and
hardworking his whole life. This was a calculated effort to show that Medicare would
not be a handout to those undeserving. Instead, it would be a lifeline that average,
hardworking people desperately needed—a form of insurance in the event of
unpreventable catastrophe that the private sector could not and would not provide. He
closed his example by reminding the audience, “Nobody...is asking for it for nothing.”
Instead, he said, “They are willing to contribute during their working years.”38 Medicare,
for Kennedy, would afford the elderly dignity in their final years, helping them avoid
bankruptcy and dependence. With Medicare, working Americans would be able to pay
through Social Security, filling a gap that private insurance could not.
While Kennedy framed the debate around the public sector providing deserving
people with a service currently unavailable, the AMA shifted the debate to a discussion
of government takeover. In its opposition to Medicare, the organization stressed its fear
of government intervention, reiterating strong preference for private sector solutions
instead. In its own message from Madison Square Garden, the organization hailed “the
American private system” as “blazing forth today with new discoveries, new cures,
miraculous breakthroughs of all kinds.”39 AMA President Dr. Leonard Larson bragged,
“the private doctor treating the private patient has in the last twenty years alone added an
!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!
38
Ibid.
New York Times (1923-Current file), "A.M.A. Chief Scores A Medicare Boycott As 'Untimely' Move,"
May 15, 1965, ProQuest Historical Newspapers The New York Times (1851 - 2007), p15.
39
24
average of ten years to the life of every American.”40 In the same way President
Kennedy opened with a description of the dire current condition of the elderly, Dr.
Larson opened his own speech with praise for the status quo, challenging Kennedy’s
assertions directly. By emphasizing that medical advancements had come under the
“American private system,” Larson sought to paint the current system in a favorable
light.41 Simultaneously, the AMA President even applauded the Kerr-Mills Act, citing
thirty states’ adoption of it and saying simply, “It works!”42
Continuing on to make what would become the AMA’s standard argument, Dr.
Larson claimed that with passage of Medicare, the United States would take one step
towards “socialized medicine,” and that the breakdown of the doctor-patient relationship
would ensue. “The American system of medicine is a system of quality medicine, not
mass-production medicine,” Larson said.43 “The King-Anderson crowd44 intends to take
us all the way down the road to a new system of medicine for everybody. England’s
nationalized medical program is the kind of thing they have in mind for us.”45 Larson
and the AMA were content with the status quo. While Kennedy focused on the current
problem of elderly citizens with no insurance, Larson insisted that the private system
worked well. He then shifted the conversation to England’s nationalized health system.
!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!
40
Ibid.
Ibid.
42
Ibid.
43
Ibid.
44
King-Anderson refers to the version of Medicare put forth by Rep. Cecil King and Senator Clinton
Anderson. It financed medical benefits for the aged through Social Security payroll taxes, and was the chief
version of Medicare after the failure of Forand’s bill.
45
New York Times (1923-Current file), "A.M.A. Chief Scores A Medicare Boycott As 'Untimely' Move,"
May 15, 1965, ProQuest Historical Newspapers The New York Times (1851 - 2007), p15.
41
25
In doing so, Larson broadened the debate to speculate on what the program would grow
into. He brought up fears of a breakdown of the doctor-patient relationship and complete
socialization of medicine, instead of directly addressing the Medicare proposal on the
table.
This was the AMA’s strategy in combating Medicare. In an even more explicit
way than Larson, the president of New York’s medical society, an AMA subsidiary,
called the Kennedy-sponsored measure “one of the greatest threats to our American
system of free enterprise.”46 He predicted the end of the doctor-patient relationship as it
was, warning in the New York Times, “You can be sure that one morning we will awaken
to find a bureaucrat sitting alongside us in the consulting room, a politician almost at our
elbows in surgery and Government clerks approving or rejecting our prescriptions.”47
This type of rhetoric intentionally hyperbolized Medicare, suggesting that any increase in
government involvement would result in complete takeover, ruining the system as it was.
Shifting the debate in this direction allowed the AMA to sensationalize fears, creating
significant, impassioned opposition to Medicare. Following the Madison Square Garden
speeches, the organization ratcheted up pamphlet distribution by mail, and poll support of
the bill dropped to about 50%.48
For all the AMA’s rhetoric, the organization was off the mark with its assertions
that the status quo was producing great results for the elderly. When the AMA applauded
!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!
46
New York Times (1923-Current file), "Physicians Assail Aged Care Plan," Feb 11, 1962, ProQuest
Historical Newspapers The New York Times (1851 - 2007), p72.
47
Ibid.
48
Social Security Online, "Chapter 4: The Fourth Round, 1957 to 1965," Social Security Administration,
http://www.ssa.gov/history/corningchap4.html.
26
the coverage of nine million elderly people with private insurance, it failed to mention the
more than eight million people over sixty-five without it. Even worse, medical costs
continued to climb faster than the cost of living, with the average hospital stay going
from $29 per day to $40 between 1960 and 1964.49 Insurance companies passed these
increases on to their customers in the form of premiums, and by the early 1960s,
insurance coverage for the elderly had leveled off around 50% of the population.
Factoring in the coverage those policies actually offered, only about one in four elderly
had “adequate” hospital insurance protection.50
This bleak picture undermined the AMA’s assertions that the private system was
working. Furthermore, the AMA’s advocacy for the Kerr-Mills Act went unrewarded, as
the program essentially stagnated. While the AMA bragged that over 30 states had
adopted the program, 83% of total aid money was going to just five states.51 The AMA’s
arguments for the private solution’s success were quite clearly unsound and hollow.
Nevertheless, the argument against the potential for greater government control was
powerful—linking Medicare with total socialized medicine proved effective. Lacking
adequate support in Congress, Kennedy’s bid for Medicare failed. On July 17, 1962, the
Senate voted against it 52-48.52
!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!
49
Ibid.
Ibid.
51
Ibid.
52
Ibid.
50
27
FROM JFK TO LBJ
While Kennedy had publicly and rhetorically taken up Medicare, his major focus
was elsewhere. In an interview years later, Wilbur Mills recalled the difference between
Kennedy and Johnson on Medicare, saying, “I told Kennedy that [I didn’t think we could
pass Medicare], and he agreed, I guess. He never did really press me about it.”53
Considering Medicare would have to originate in Mills’ committee, a lack of pressure
from Kennedy would indicate that the President either did not feel comfortable
attempting to pass the measure or did not assign high priority to it behind the scenes. As
a president, Kennedy’s focus was on foreign policy—his strength. Historian Robert
Dallek notes that Kennedy “had a degree of self-confidence about foreign affairs that he
rarely displayed in addressing domestic ones.”54 He preferred foreign relations to
domestic policy. He complained that the latter was much less satisfying, as it was always
beholden to a special interest and polarization.55
The transition from the Kennedy administration to Johnson’s, then, marked a shift
in the role of the executive branch. With a long and highly successful career in Congress,
Lyndon Johnson brought to the White House expertise as a legislator. On foreign
relations, Johnson was “insecure, fearful, his touch unsure,” once saying, “I don’t believe
I’ll ever get credit for anything in foreign affairs, no matter how successful it is, because I
!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!
53
Transcript, Wilbur Mills Oral History Interview II, 3/25/87, by Michael L. Gillette, Internet Copy, LBJ
Library.
54
Robert Dallek, An Unfinished Life: John F. Kennedy, 1917-1963 (Boston: Little, Brown, and, 2003),
p220-222.
55
See Robert Dallek, An Unfinished Life, p220-222; p231-232; p244; p748.
28
didn’t go to Harvard.”56 In domestic politics, though, Johnson was a master. With that
background, he focused on national initiatives as President. In the period after
Kennedy’s tragic death, Johnson took up the slain President’s domestic agenda, bringing
it to life with a vigor that Kennedy had never afforded it. The President pushed hard for
Kennedy’s tax cut, his Civil Rights Act, and declared a War on Poverty. As Wilbur Mills
recalled, Johnson “had to enact everything that [Kennedy] had espoused, because he had
succeeded him. He had to do it. And with me, that was what he was saying all the time
about it. ‘I've got to do it because John Kennedy espoused it.’ Just that simple.”57
According to Mills, Johnson had the skill to do it, too:
Interviewer: Do you think that if John Kennedy had lived that he would
have been able to pass--?
Mills: No, wouldn't have gotten half of it through.
Interviewer: Really?
Mills: No. No, and that's where Johnson doesn't get the credit. He had the
greatest ability of any president to get things done.58
Medicare benefited from Johnson’s focus on domestic policy. While Kennedy had made
Medicare a priority rhetorically, Johnson worked tirelessly behind the scenes to bring it to
fruition—an effort explored in greater depth in the following chapters.
Johnson’s 1964 incorporation of Medicare into his presidential campaign elevated
Medicare’s prominence as a domestic issue. The President campaigned ferociously for
Medicare, utilizing similar rhetoric to Kennedy’s. Johnson spoke of older citizens who
!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!
56
Thomas A. Schwartz, Alliance Politics, Political Economy, and ‘Growing out of the Cold War’ ed. H. W.
Brands in The foreign policies of Lyndon Johnson: beyond Vietnam, (College Station, TX: Texas A&M
University Press, 1999), p37-38.
57
Transcript, Wilbur Mills Oral History Interview II, 3/25/87, by Michael L. Gillette, Internet Copy, LBJ
Library, p9.
58
Ibid., p17.
29
had “a lifetime of honorable, productive work behind them.” These people were
particularly vulnerable—“defenseless against the heavy medical costs of severe illness or
disability.”59 He stressed that for many elderly, “serious illness wipes out savings and
carries their families into poverty.”60 Johnson sought to afford people a chance to obtain
insurance against catastrophic illness, keeping them from being “deprived of hope and
dignity.”61 Touching on the same themes Kennedy did in his “typical” example two
years earlier, Johnson was careful to paint Medicare as a plan that restored dignity to
those who had earned it, at the same time stressing that they would pay into the system
while working to finance this help. Consequently, Johnson combined Kennedy’s rhetoric
with his own legislative prowess, creating momentum for Medicare leading up to the
1964 elections.
!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!
59
Lyndon B. Johnson, "Special Message to the Congress on the Nation's Health," ed. John T. Woolley and
Gerhard Peters, The American Presidency Project [online], Santa Barbara, CA, Available from World
Wide Web: http://www.presidency.ucsb.edu/ws/?pid=26064.
60
Ibid.
61
Ibid.
30
CHAPTER TWO
“BY NO-WAYS AND BY NO-MEANS”
President Lyndon B. Johnson was determined to pass a medical care bill for the
aged in 1964. Having seen the popularity of the measure throughout the country,
Johnson made Medicare a top priority in his campaign, hoping to use its popularity to win
votes. Johnson used the term “Medicare” as a sort of catch-all phrase, a campaign brand.
The only definitive characteristic of “Medicare” was that it would encompass all elderly
Americans; it would not require a means test—legal documentation of a certain level of
income that would qualify an individual for help. Thus, Medicare would lack the public
stigma of welfare borne by the Kerr-Mills Act—Medicare’s 1960 alternative and the
predecessor to Medicaid. Instead of waiting until the elderly became impoverished,
Medicare would prevent bankruptcy from medical costs, and thus prevent
impoverishment.
In 1964, the details of such a Medicare program were far from set. While the
measure would most likely be financed through Social Security, other measures had been
considered. The most popular—and the White House’s choice—was the King-Anderson
bill, which would finance compulsory hospital insurance through Social Security,
functioning like private insurance. Other versions existed however, including one that
gave beneficiaries the option of medical benefits or the cash equivalent, and another that
financed the program through the general funds of the treasury, rather than Social
Security.
This chapter will focus heavily on Medicare and the priority and publicity that
Johnson's presidential campaign ascribed to it. Since the President thought that passing
Medicare would significantly help in his presidential bid, Johnson's demand was not
strict. He wanted simply a program called "Medicare" that labor leaders would accept.
Thus, Medicare became an amorphous term rather than a concrete policy. This degree of
flexibility in developing the actual provisions of the legislation allowed Medicaid to
become a part of it. When Medicare failed to pass in 1964, the visibility Johnson brought
to it turned the election of 1964 into a sort of referendum on the program.
“THE MOST POWERFUL MAN IN WASHINGTON”
The fate of any legislation concerning medical care for the aged rested in the
hands of the House Committee on Ways and Means. Deriving much of its power from
Article I, Section VII of the Constitution, which states, “All Bills for raising Revenue
shall originate in the House of Representatives,” Ways and Means has jurisdiction over
federal revenue measures and Social Security programs, making it the point of origin for
any Medicare bill.1 As the Committee’s Chairman, Wilbur Mills—a Democrat from
Arkansas—was sometimes referred to as the most powerful man in Washington.
!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!
1
Financing Medicare would require imposing a tax. Whether the funding came from the general treasury or
from a payroll tax tied to Social Security, it would have to go through Ways & Means. (Committee on Ways
and Means, “Committee Jurisdiction,” http://waysandmeans.house.gov/About/Jurisdiction.htm.)
32
Described as a knowledgeable and conscientious legislator, Mills was a dedicated expert
in his field, preferring review of Committee reading at home to participation in the social
circle of Washington’s elite.2 As the Chairman put it, “After you’ve been here for a
while, you’re tabbed as either knowing your subject or not knowing it. I’ve sought to
know my subject.”3
While trying to pass Medicare in 1964, President Johnson and his staff would
spend an inordinate amount of time trying to win Mills’ support. On an expensive
proposition like Medicare, this was not an easy task. The Chairman was fiscally
conservative—he consistently objected to levying any new taxes—and a watchdog of
Social Security, committed to the actuarial soundness of the program.4 Both of these
qualities made it difficult to win his approval on Medicare, a proposition that sought its
funding through Social Security. More frustrating for Johnson, Wilbur Mills was
especially meticulous about the bills that left his Committee, requiring wide margins of
victory before endorsing anything. The Chairman had been embarrassed on the first
legislation to leave Ways and Means under his leadership—in that case, Mills had failed
to package an extension of unemployment compensation properly, and thus was unable to
!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!
2
Time Magazine, “The Congress: An Idea on the March,” January 11, 1963,
http://www.time.com/time/magazine/article/0,9171,873000,00.html.
3
Julian E. Zelizer, Taxing America: Wilbur D. Mills, Congress, and the State, 1945-1975 (Cambridge, UK:
Cambridge University Press, 1998), p131.
4
Zelizer, Taxing America.
33
create a coalition of Representatives who could endorse the measure.5 The failure taught
Mills the importance of tailoring legislation to allow for a wide range of support; from
then on, the Chairman made certain that any bill originating in his Committee would pass
the House easily.6 In an interview after retirement from Congress, Mills reflected on his
style as Chairman: “I was always determined that whatever came out of the Committee
passed, you know…I was always trying to get something I knew would appeal to a cross
section of the membership.”7 Mills understood what would appeal to a large
constituency—biographer Julian Zelizer praised him for his ability to act as both a
political chameleon and sphinx.8 As the former, Mills was able to understand the
interests and ideas of each faction, and incorporate them into legislation. In his role as a
sphinx, Mills “refused to commit himself to any particular proposal until the very end of
deliberations,” a trait that would particularly aggravate the White House.9 At the same
time, these traits made him extremely successful in his tenure as Chairman. As a result of
!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!
5
The bill was a $1.5 billion extension of unemployment compensation to aid those hurt during the 1958
recession. Mills financed the benefits through general revenue instead of Social Security, a measure
unheard of at the time. Although his Committee approved it 16-7, “Mills did not package the measure
properly, leaving it open to charges of being a ‘raid on the general funds’ that threatened to destroy the
contributory principle underlying unemployment compensation.” The House soundly rejected the proposal
and Mills was widely criticized for the effort. Zelizer, Taxing America, p121-122.
6
Zelizer, Taxing America, p123.
7
Transcript, Wilbur Mills Oral History Interview II, 3/25/87, by Michael L. Gillette, Internet Copy, LBJ
Library.
8
Zelizer, Taxing America, p21.
9
A 1963 Time Magazine profile of the Chairman noted his painstaking rigor: “in guarding against defeat
he has sometimes delayed too long or wavered too much while tying to make a Committee bill fail-proof.”
It described: “During the 1959 session, his excessive wariness damaged his prestige, all but torpedoed his
hopes of some day becoming Speaker of the House. He procrastinated and wobbled so much on legislative
matters before Ways and Means that House wags dubbed it the No-Ways and By-No-Means Committee.”
While the piece feared that Mills went too far in his perfectionism, it illustrated the point all the same—
Mills could not be cajoled into sponsoring a bill he didn’t believe would pass handily. Time Magazine,
“The Congress: An Idea on the March,” January 11, 1963; In-text quote: Zelizer, Taxing America, p21.
34
his Committee’s power and Mills’ methodical leadership, he was key to the passage of
Medicare. No bill would ever get out of Committee without Wilbur Mills’ approval.
Lyndon Johnson and his staff were keenly aware of this.
Medicare was an important piece of legislation for Johnson. In 1964, the
President declared a War on Poverty, an initiative that had potentially alienating effects.10
With the anti-poverty measures, the wealthy and the middle class might look unfavorably
on the administration spending their tax dollars for programs that would not affect them.
As Johnson wrote in his 1971 memoir, “Many people warned me not to get caught in the
snare of a program directed entirely toward helping the poor.”11 Johnson recalled a
memorandum from a staff aide, which set out, “the adverse political effect which such a
program could eventually have on ‘the American in the middle—the man who earns
$3000 to $9000.’” The aide wrote, “America’s real majority is suffering a minority
complex. They have become the real foes of Negro rights, foreign aid, etc., because, as
much as anything, they feel forgotten, at the second table.”12 Johnson lamented, “Many
!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!
10
To be clear, Medicare was not a part of the War on Poverty. The White House thought of them as
entirely separate, the ideologies behind both initiatives are different, and they targeted distinct groups of
people. See Paul Starr, The Social Transformation of American Medicine (New York, NY: Basic Books,
1982); James T. Patterson, America's Struggle Against Poverty in the Twentieth Century, (Cambridge, MA:
Harvard University Press, 2000).
11
The point here is to illustrate that the President was advised up front of the political ramifications of a
poverty program. He knew full well the risks of declaring War on Poverty long before he did so. To
contextualize this quote, Johnson goes on to speak of how he knew that—although people told him not to—
helping the poor was the right thing to do, so he did it against staff judgment. Considering the disgraced
way in which Johnson left office, and the aim of his autobiography of impacting his legacy, this is almost
certainly an effort on Johnson’s behalf to lionize his actions and portray the image of an advocate for the
weak. Lyndon B. Johnson, The Vantage Point: Perspectives of the Presidency, 1963-1969.(New York:
Holt, Rinehart and Winston, 1971), p71.
12
Ibid., p72.
35
uninformed people believed the poverty program was entirely Negro-oriented.”13 In
addition to the War on Poverty, Johnson pushed for a Civil Rights Act to end segregation,
another polarizing issue. The President remembered a public opinion expert telling him,
“The racial issue is the only one that can elect Goldwater.”14 A mayor told Johnson that
he had, “never seen what we are seeing among the votes today. The backlash is only part
of it. The antivote—the ‘against’ vote—is big and is going to get bigger.”15 Presidential
biographer and historian Robert Dallek describes a telling conversation Johnson had:
A few days after he became President, he [LBJ] asked Senator Richard
Russell of Georgia, an unyielding segregationist, to come talk to him
about the civil rights bill. “The President sat in a wing chair. The Senator
sat at one end of a small couch. Their knees almost touched.” As Jack
Valenti remembered it, Johnson said: “Dick, you’ve got to get out of my
way. I’m going to run over you. I don’t intend to cavil or compromise.”
“You may do that,” he replied. “But by God, it’s going to cost you the
South and cost you the election.”16
Johnson was susceptible to this thinking. On the night he signed the Civil Rights Act,
desegregating the South and guaranteeing equal employment regardless of race, Johnson
told aide Bill Moyers, “I think we just delivered the South to the Republican Party for a
long time to come.”17 Medicare, though, was an opportunity to do something for the
elderly and for working class Americans, predominantly white constituents.18 Johnson
!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!
13
Barry Goldwater, Senator from Arizona, was the face of an ultra-conservative grassroots movement in
the South and Southwest, referred to as the New Right. He won the Republican nomination for President in
1964 and opposed Johnson. See Lisa McGirr, Suburban Warriors: the Origins of the New American
Right (Princeton, NJ: Princeton University Press, 2001); In-text quote from: Johnson, The Vantage Point,
p71.
14
Johnson, The Vantage Point, p109.
15
Ibid., p109.
16
Robert Dallek, Flawed Giant: Lyndon Johnson and His Times, 1961-1973 (New York: Oxford
University Press, 1998), p112.
17
Ibid., p120.
18
The program would disproportionately affect white males, as it was tied to the requirements of receiving
Social Security. See Mary Poole, The Segregated Origins of Social Security: African Americans and the
36
looked for Medicare to help him bring white voters to the polls. In a telephone
conversation in March of 1964, the President told Wilbur Cohen, Assistant Secretary of
the Department of Health, Education and Welfare, “I want to say to the auto workers if
we gonna spend all summer here passing Civil Rights, we’re gonna spend the rest of our
lives if it’s necessary passing medical care.”19 With that, he instructed Cohen to get
working drafting a Medicare bill, and his staff began lobbying Wilbur Mills.20
A March conversation with Wilbur Cohen reveals the importance of Wilbur Mills
in passing a Medicare bill: “Has Wilbur Mills ever gotten with you yet,” Johnson asked
Cohen. “No sir,” Cohen replied, “I went up to see him a couple of times.”21 The
President instructed Cohen to keep at it, adding that he would try himself to get with
Mills the following Monday.22 For Johnson, who enjoyed great persuasive abilities, this
chase was particularly frustrating. During his nearly thirty years in Congress, Johnson
had built a reputation as a man who got his way. After just two years in the Senate,
Johnson was made the Majority Whip, responsible for rounding up votes for his party’s
legislation.23 He had become particularly famous for the so-called “Johnson treatment,”
!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!
Welfare State (Chapel Hill: University of North Carolina Press, 2006); Alice Kessler-Harris, In Pursuit of
Equity: Women, Men, and the Quest for Economic Citizenship in 20th Century America (Oxford: Oxford
University Press, 2001)
19
Telephone Conversation between Lyndon Johnson and Wilbur Cohen, 3/21/1964, Tape WH6403.15,
Program No. 2, Citation No. 2612, Johnson Tapes: Telephone Series, Presidential Recordings Program,
Miller Center of Public Affairs, University of Virginia, http://whitehousetapes.net/tapes/johnson/telephone.
20
Cohen was an expert on Social Security, and was the White House’s point person on Medicare. See
Edward D. Berkowitz, Mr. Social Security: the Life of Wilbur J. Cohen (Lawrence, Kan.: University Press
of Kansas, 1995)
21
Telephone Conversation between Lyndon Johnson and Wilbur Cohen, 3/21/1964, Tape WH6403.15,
Program No. 2, Citation No. 2612, Johnson Tapes: Telephone Series, Presidential Recordings Program,
Miller Center of Public Affairs, University of Virginia, http://whitehousetapes.net/tapes/johnson/telephone.
22
Ibid.
23
Dallek, Flawed Giant.
37
whereby he would leverage his 6 foot 4 inch frame, towering over his subject at point
blank range.24 A New York Times feature noted Johnson’s “incredible persistency to
achieve what he wants, applying this with equal fervor to minor press critics from whom
he wants sympathy to major statesmen from whom he wants agreement.”25 The President
was considered a persuasive genius when it came to mustering support for legislation.
That said, Wilbur Mills’ Chairmanship put him in his own position of power that could
turn the tables on Johnson. Moreover, Mills’ Arkansas seat was safe, giving him a large
degree of freedom in his legislative agenda.26 Wilbur Mills was as immune to the
Johnson Treatment as anyone could be.
The combination of Johnson’s desperate pursuit of Medicare and Mills’ cautious
pace created a cat and mouse game in Washington throughout 1964. A conversation
between the President and Larry O’Brien, a top Democratic Party strategist and the
Special Assistant to the President for Congressional Relations, revealed this dynamic on
May 18, 1964, when O’Brien called Johnson to report on Mills.27 “He’s certainly in the
Medicare ballpark,” O’Brien said, “He’s feeling his way along very slowly and carefully
and he’s manipulating and maneuvering…I think we have to have confidence in him to
!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!
24
Ben H. Bagdikian, “Looking Over The Leader,” New York Times (1923-Current file), May 2, 1965,
ProQuest Historical Newspapers The New York Times (1851 - 2007), pBR3.
25
Ibid.
26
Zelizer, Taxing America.
27
O’Brien was Johnson’s point person on Congressional relations. As Johnson was a President who was
extremely involved in Congressional happenings, he and O’Brien were constantly in touch, and developed
a very solid relationship. Johnson could trust O’Brien. Beyond a working relationship, the two were
similarly candid, and thus their conversations are both informative and entertaining for the historian.
O’Brien would later chair the Democratic National Convention twice and serve as Commissioner of the
National Basketball Association. Source: R. Scott Harris, “O’Brien, Lawrence Francis Jr.,” American
National Biography Online, February, 2000, http://www.anb.org.ezp-prod1.hul.harvard.edu/articles/07/0700406.html.
38
be contacting us by the end of this week for this long awaited meeting.”28 Until that
meeting occurred, though, all O’Brien could do was try to triangulate where Mills stood,
using whatever sources he could. Those sources included Wilbur Cohen, who, at
O’Brien’s direction had “been living with him.”29 Even still, Cohen was unable to gain
any clear indication of Mills’ position, but rather just said, “from everything he can
discover there is no hanky-panky.”30
O’Brien himself was able to find that, “some of the strong Medicare supporters in
the Committee have been a little nervous. Al Ullman for one, awfully decent guy on the
Committee, talked to me last week and said, ‘I just have a feeling something’s going to
work out, but I get nervous because Mills won’t tell us anything!’ But that’s the way
Wilbur operates as you know.”31 Ullman, who took part in Ways and Means Committee
meetings, often behind closed doors, could not predict Mills’ stance on Medicare. This
was somewhat typical of Mills, who often waited until the last minute to reveal his
position on any piece of legislation, preferring to try to take the pulse of his committee
and leave flexibility for political maneuvering on his own part. A frustrated O’Brien had
!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!
28
Telephone Conversation between Lyndon Johnson and Larry O’Brien, 5/18/1964, Tape WH6405.08,
Program No. 1, Citation No. 3472, Johnson Tapes: Telephone Series, Presidential Recordings Program,
Miller Center of Public Affairs, University of Virginia, http://whitehousetapes.net/tapes/johnson/telephone.
29
Ibid.
30
Ibid.
31
Many of these conversations have the potential to get confusing, as two key characters are named Wilbur
– Cohen and Mills. In the interest of clarity, it may be useful to give some information on the two. Most
importantly, Wilbur Cohen (Assistant Secretary of the Department of Health, Education, and Welfare) will
always be on President Johnson’s side of the conversations, as an expert in the field of Social Security and
Democratic party constantly pushing for Medicare. Congressman Mills (Chairman of the House Committee
on Ways and Means) is the opposite—difficult to pin down and on the other side of the President. Finally,
should the reader find it helpful, the two have very distinct voices. Cohen’s voice is higher-pitched, a bit
nasal, and generally very upbeat, cheerful, and optimistic. Mills, on the other hand, speaks in a slow, deep,
deliberate manner, with a bit of scratch to his voice and a hint of a Southern drawl—an accent he would
turn on and off depending upon whom he was speaking with.
39
even resorted to reading press articles to understand Mills’ position. “These stories are
starting to break out in different directions and all kinds of different interpretations of
what’s going on,” he told Johnson.32 In this particular telephone call, O’Brien had
indicated that Wilbur Cohen could not find out what was going on, a member of Ways
and Means had no idea what Mills was thinking, and the press had many different
notions.
Johnson finished the conversation, “Tell him God dammit if it’s getting to where
it’s getting out, I’d like to know what he has in mind. Tell him they’re asking me
questions and I don’t know what the hell he’s doing; a Democratic President ought to
know what a Democratic Chairman’s doing!”33 That the White House was powerless to
even find out what the Chairman’s agenda was emphasizes Mills’ power and
independence. He had the President and his staff running circles around Capitol Hill.
At the time, rumors were already circulating that Mills was planning to advance
his own legislation. In the same May conversation, O’Brien voiced his concern to
Johnson that Mills was planning to put out “a Kerr-Mills package that bypasses
Medicare.”34 O’Brien had gotten wind of reports that Mills would try to propose
legislation doing so. While Mills had personally told O’Brien that, “you and I know that
my goal is to include a Medicare program into it,” the rumor still undercut Johnson’s
!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!
32
Telephone Conversation between Lyndon Johnson and Larry O’Brien, 5/18/1964, Tape WH6405.08,
Program No. 1, Citation No. 3472, Johnson Tapes: Telephone Series, Presidential Recordings Program,
Miller Center of Public Affairs, University of Virginia, http://whitehousetapes.net/tapes/johnson/telephone.
33
Ibid.
34
Ibid.
40
hopes.35 Throughout the Medicare debates, the program’s opponents often preferred an
expansion of the Kerr-Mills program as an alternative to an entirely new and costly
system.36 Wilbur Mills was one such person, having written the Kerr-Mills legislation as
an alternative to Medicare in 1960. The Chairman had in the past been skeptical of
financing medical care through Social Security, as he worried about the stress it would
place on the Social Security trust fund. At the same time, Mills was at least willing to
consider the program. For the Johnson administration, though, hearing that Mills might
prefer the alternative to Medicare was extremely troublesome.
“WELL, GRIND SOMETHING OUT OF THERE”
As Congress moved closer to passing the Economic Opportunity Act—the first
major initiative of the War on Poverty—and the Civil Rights Act, Johnson became
increasingly desperate for Medicare, and showed willingness to compromise on details in
order to pass legislation before the election. On June 9, the President spoke directly with
Wilbur Mills. Johnson focused on how important a Medicare bill would be, citing those
he had talked to on the campaign trail in New York and Pennsylvania and basically
begging Mills to put something forward. “I’ll tell you, the single most important popular
thing is the bill you’re working on, no question in my mind about it,” Johnson said. “If
you get something you can possibly live with and defend, that these people will not kick
!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!
35
Ibid.
These included the AMA with Eldercare and most Republicans, along the tradition of Dwight
Eisenhower.
36
41
over the bucket with, it’ll mean more than all the bills we’ve passed put together. And I
think it’ll mean more to posterity and to you and to me.”37 Understanding the control
Mills had over the legislation, and the Chairman’s hesitancy to endorse the measure,
Johnson voiced his support for Medicare, in any form Mills was willing to offer. “I’m
not trying to go into details and I’m not trying to write a new section every morning or
title…I just say this, that there’s not anything that’s happened in six months or that will
happen in my whole term in my judgment that’ll mean more to us as a party.”38
Johnson’s desperation really came through—he made sure Mills understood how
important Medicare was and then voiced his complete approval of anything Mills could
“possibly live with and defend.”39 Mills merely replied, “We’re making every effort,” to
which Johnson pleaded once more, “Well grind something out of there.”40 Johnson
clearly wanted passage of Medicare in his political arsenal for the upcoming presidential
campaign. Wilbur Mills’ support could make the difference, so the President pressured
him.
Two days later, Larry O’Brien went to Mills’ office, where the two of them called
Johnson. Again, Johnson placed the weight of a Medicare bill on Mills’ shoulders,
continuing to stress the importance of the measure to his own campaign. “Wilbur, I got a
poll in Vermont,” Johnson explained, “and do you know what my weakest point is? We
!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!
37
Telephone Conversation between Lyndon Johnson and Wilbur Mills, 6/9/1964, Tape WH6406.03,
Program No. 12, Citation No. 3642, Johnson Tapes: Telephone Series, Presidential Recordings Program,
Miller Center of Public Affairs, University of Virginia, http://whitehousetapes.net/tapes/johnson/telephone.
38
Ibid.
39
Ibid.
40
Ibid.
42
done nothing for the old folks!”41 Mills dodged the obvious request for an update on
Medicare, and reported to Johnson that he was working on a cash benefit increase for
Social Security, access to reduced Social Security benefits at age 60, instead of 65, and
aid to widows at age 55 through the state welfare program.42 Johnson continued to drive
home the point, reading the poll results from Vermont in detail. Johnson was rated
“favorable,” with at least 60% approval in seven distinct categories, but in “more health
for old people” he was at “43% favorable, 57% unfavorable.”43 He cut to the point, and
instructed Mills, “find some way to do something on this medical thing. You got 13
votes, you can probably get 14,” referring to the number of votes Mills could potentially
get in the 25-member Committee on Ways and Means. The President, pressing Mills for
his opinions on Medicare, successfully opened up a conversation. Mills hinted at his
hesitancy to pass it—he felt it necessary to have broad support in Committee, and he was
not sure he had it:
Mills: Let me ask you this and get your judgment on it—
Johnson (interrupts): I’d rank it number one
Mills: —If I can’t get something that I can get more than 13 votes on it, I
told you in the beginning that I thought you and I both felt that it ought to
get more than that.
Johnson: God, what percentage you want 13 out of 15 [Democrats]?
That’s 90 percent, isn’t it?
Mills: Yeah, but I mean 13 out of 25.
!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!
41
Telephone Conversation between Lyndon Johnson, Wilbur Mills and Larry O’Brien, 6/11/1964, Tape
WH6406.06, Program No. 2, Citation No. 3686, Johnson Tapes: Telephone Series, Presidential Recordings
Program, Miller Center of Public Affairs, University of Virginia,
http://whitehousetapes.net/tapes/johnson/telephone.
42
This again showed Mills’ preference for a state-based approach, rather than the Federal Medicare
program.
43
Telephone Conversation between Lyndon Johnson, Wilbur Mills and Larry O’Brien, 6/11/1964, Tape
WH6406.06, Program No. 2, Citation No. 3686, Johnson Tapes: Telephone Series, Presidential Recordings
Program, Miller Center of Public Affairs, University of Virginia,
http://whitehousetapes.net/tapes/johnson/telephone.
43
Johnson: Oh no! No no. Well you don’t ever expect to get Republicans?
They’re gonna be against any proposal I make! All of ‘em against [anti]poverty [legislation], every single one of them.44
Mills opposed reporting out of the 25-member Committee on Ways and Means with just
13 votes for the bill—the smallest majority possible. Johnson, not surprisingly, conveyed
enthusiasm for any majority capable of squeezing a Medicare bill out. Here, the two
parties’ conflicting interests and styles emerged most clearly. Johnson believed that
Medicare was going to be important in the November elections, so he was for it in any
way possible. Mills, on the other hand, sought broad support for measures originating
Committee, and 13-12 was not broad support. If he did not know the bill would pass the
House safely, he would not let it out of Ways and Means.45
The conversation continued, and Mills outlined a potential strategy to force
Republicans to vote for Medicare. Because it would be risky politically for Republicans
to vote against an increase in Social Security benefits, which were widely considered
overdue, Mills suggested combining Medicare with that increase. The Committee on
Ways and Means was already drafting a bill to increase Social Security benefits, so
Medicare could be added as an amendment. Additionally, Mills wanted to expand his
own Kerr-Mills program. This would create a “three-pronged approach” designed to
corner Republicans into voting for Medicare:
Mills: But they’re [the Republicans] not always against Social Security. I
got them in a bind if they vote against reporting this bill…They all want to
be for this increase in cash benefits and that too is very helpful. The
Secretary said yesterday in the Committee before we quit that what we’re
talking about is this three-prong approach, he calls it, which would have
!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!
44
45
Ibid.
Ibid.
44
some hospitalization enacted with Social Security, this cash benefit
increase, plus improvements to the Kerr-Mills.
Johnson (excitedly): I’d be for all three of those if you could put
[Medicare] in on it. If you couldn’t, I’d wait until I could get them all
together. Because I think if you don’t, you’ll murder the other one
[Medicare] and I think the other one’s what’s got sex appeal.46
Mills thought that packaging Medicare with the Social Security benefit increase and
improvements to Kerr-Mills might be a viable way to get Johnson what he wanted. This
strategy would put Republicans in a position of having to vote down the widely popular
benefit increase if they hoped to halt Medicare. With the combination, Republicans
would have to give Democrats something in order to get what they wanted. For Johnson,
though, the combination would only be acceptable if it included the popular Medicare
label, which had become mainstream in campaign rhetoric by that time. As both parties
were for the Social Security benefit increase, its passage alone would simply remove the
bargaining chip from the equation, without reaping any additional political benefits for
the election. While Johnson was excited about the prospect of all three together, it was
an all-or-nothing situation for him. He would gain little politically without Medicare’s
“sex appeal.”47
Mills wavered when Johnson stressed Medicare’s inclusion: “If we didn’t put
[Medicare] in, would the Senate put it in?” Mills asked.48 “I don’t think so,” Johnson
!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!
46
Johnson doesn’t want Mills to report out Social Security without Medicare, because he is worried that the
imposed taxes from the increased benefits would preclude Congress from acting on Medicare later on.
Medicare would necessitate more taxes, and Johnson worried that the public wouldn’t tolerate two separate
tax increases. Telephone Conversation between Lyndon Johnson, Wilbur Mills and Larry O’Brien,
6/11/1964, Tape WH6406.06, Program No. 2, Citation No. 3686, Johnson Tapes: Telephone Series,
Presidential Recordings Program, Miller Center of Public Affairs, University of Virginia,
http://whitehousetapes.net/tapes/johnson/telephone.
47
Ibid.
48
Ibid.
45
replied, “I doubt they’d ever even take it up.”49 Mills, by asking whether the Senate
would put it in, was suggesting that the House Committee on Ways and Means could
report out only the Social Security benefit increases, leaving out Medicare. Once the bill
passed the House and went to the Senate, Mills would look to the Senate to attach
Medicare as an amendment. Then, when the bill went to Conference Committee, the
House conferees could vote to adopt the Senate version of the bill.50 Here, Mills again
showed his reluctance to endorse Medicare. Johnson attempted to cut off this tactic, by
quickly insisting the Senate would not take it up.51 He then pushed Mills again, returning
to the importance of Medicare for the Democratic campaign in November: “My judgment
is that is by far the most popular thing that we’ve ever touched and will do us more good
than all the others put together.”52 Johnson had become convinced that passage of
Medicare would help tremendously in the election.
Almost two weeks later, on June 22, 1964, O’Brien called Johnson to dejectedly
report that, “the Wilbur Mills situation has deteriorated, I would say at this moment
totally.”53 In Committee that day, Mills suggested reporting the increase in Social
!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!
49
Ibid.
It later became evident that Mills would not allow this strategy to work, as it bypassed Ways and Means
completely. At the time, though, Mills was trying to understand the political landscape, not necessarily
conveying support for that tactic.
51
This is an example of Johnson politicking. He eventually is able to convince the Senate to add the
measure, and was probably aware of that capability, or at the least didn’t think it impossible.
52
Telephone Conversation between Lyndon Johnson, Wilbur Mills and Larry O’Brien, 6/11/1964, Tape
WH6406.06, Program No. 2, Citation No. 3686, Johnson Tapes: Telephone Series, Presidential Recordings
Program, Miller Center of Public Affairs, University of Virginia,
http://whitehousetapes.net/tapes/johnson/telephone.
53
Telephone Conversation between Lyndon Johnson and Larry O’Brien, 6/22/1964, Tape WH6406.12,
Program No. 7, Citation No. 3804, Johnson Tapes: Telephone Series, Presidential Recordings Program,
Miller Center of Public Affairs, University of Virginia, http://whitehousetapes.net/tapes/johnson/telephone.
50
46
Security benefits only, saying that he couldn’t muster the votes he saw fit to include
Medicare.54 Mills forced the administration to try to add Medicare in the Senate. O’Brien
was at a loss regarding what to tell Johnson, apologizing for not having a solution to the
problem. He suggested asking Mills to postpone the Committee meeting scheduled for
the morning, to allow the President some time to potentially change Mills’ mind.
Johnson, knowing that Mills would not be convinced, conceded the disappointing loss
and told O’Brien that, “I guess the best thing is let him go on vote out Social Security and
let it go on the House and try to pass it in the Senate.”55 They were both skeptical that it
could work, though, as that solution would rely on Mills to help pass Medicare in a
House-Senate Conference Committee. The President, capable as he was with domestic
legislation, was at the mercy of Wilbur Mills on Medicare. On July 7, the Ways and
Means Committee reported out H.R. 11865, a bill to increase Social Security benefits,
and nothing more.56
PEACE, PROSPERITY, AND MEDICARE
H.R. 11865 passed the House quickly, then went to the Senate.57 The White
House played an active role throughout the process in the Senate. From the Finance
Committee to the vote on the floor, Johnson was entrenched in the behind the scenes
!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!
54
Ibid.
Ibid.
56
U.S. Congress, House Committee on Ways and Means, Social Security Amendments of 1964, 88th Cong.,
nd
2 sess., H.rpt. 1548, 1965.
57
Social Security Online, "Chapter 4: The Fourth Round, 1957 to 1965," Social Security Administration,
http://www.ssa.gov/history/corningchap4.html.
55
47
negotiations. The President was able to dictate precisely what he wanted, and the KingAnderson version of Medicare—which financed the program through Social Security, the
most liberal option on the table—was added as an amendment to the House bill.58 On
September 2, with the Senate set to vote, Johnson spent the day on the phone with
numerous moderate Senators, lobbying hard for passage of the King-Anderson
amendment.59 In what looked like it would come down to two or three votes, the Senate
successfully amended the Medicare provision to H.R. 11865 and approved the bill by a
wider-than-expected margin of 49-44.60 The Los Angeles Times reported that the Senate
!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!
58
In Committee, a new version of Medicare emerged, proposed by Abe Ribicoff. His amendment (it was
proposed as an amendment to the House bill) was less generous than the compulsory King-Anderson
Medicare bill, as it was a voluntary design that would allow for recipients to opt for cash payments instead
of health insurance. From the White House, Johnson lobbied the Democrats in the Senate Finance
Committee against Ribicoff’s amendment. It was clear that Democrats didn’t have the votes to make KingAnderson stick in Committee, so Johnson wanted to risk waiting and have the Senate amend KingAnderson instead of settle for Ribicoff in the Finance Committee. As Senator George Smathers put it, “the
President wants everything he can get.” (Telephone Conversation between Lyndon Johnson and George
Smathers, 8/4/1964, Tape WH6408.05, Program No. 11, Citation No. 4677, Johnson Tapes: Telephone
Series, Presidential Recordings Program, Miller Center of Public Affairs, University of Virginia,
http://whitehousetapes.net/tapes/johnson/telephone) Once the bill moved from Committee to the Senate,
Johnson got his way. He instructed O’Brien to make sure to get the generous King-Anderson version, so
that they could later trade for the less comprehensive Ribicoff Amendment in the House-Senate Conference
Committee. The president reminded O’Brien, “Wilbur Mills will take your pants off unless you got
something to trade for.” (Telephone Conversation between Lyndon Johnson and George Larry O’Brien,
8/14/1964, Tape WH6408.19, Program No. 14, Citation No. 4921, Johnson Tapes: Telephone Series,
Presidential Recordings Program, Miller Center of Public Affairs, University of Virginia,
http://whitehousetapes.net/tapes/johnson/telephone) Here, we see Johnson is willing to accept the Ribicoff
version of Medicare, despite it being a serious compromise from King-Anderson. For Johnson, though,
passing any Medicare bill would be worth it.
59
See Presidential Recordings on 9/2/1964 for numerous telephone conversations that day lobbying various
Senators (for example, Telephone Conversation between Lyndon Johnson and Carl Hayden, 9/2/1964, Tape
WH6409.01, Program No. 19, Citation No. 5419, Johnson Tapes: Telephone Series, Presidential
Recordings Program, Miller Center of Public Affairs, University of Virginia,
http://whitehousetapes.net/tapes/johnson/telephone.) Johnson called in favors and lined up commitments
from Southern Democrats who were reluctant to endorse Medicare—they agreed to vote yea if necessary,
but otherwise would oppose it.
60
Social Security Online, "Chapter 4: The Fourth Round, 1957 to 1965," Social Security Administration,
http://www.ssa.gov/history/corningchap4.html.
48
vote “was a big victory for President Johnson.”61 The newspaper reported that passage,
“set up a major issue for the Presidential election campaign,” and credited “influence
exerted by Mr. Johnson behind the scenes” for the victory, particularly for his persuasion
of four Senators who had voted “no” in 1962 to change their minds.62 For Johnson, there
seemed to be some hope for passing Medicare. As Larry O’Brien told him on the
telephone, “With the stories around the country today, we’ve got something going on this
damn thing!”63
Despite the long odds, Johnson hoped that Mills would stand with the White
House and find a way to pass something. The President had made Medicare a top issue
in his campaign. He had been following the polls obsessively, and had centered on three
issues: “peace, prosperity, and Medicare.”64 Moreover, the labor unions were pushing
Johnson on Medicare. The Washington Post reported, “The AFL-CIO is urging President
Johnson to make an all-out drive to win House passage of the Senate-approved bill to
provide health care for the aged. Officials of the labor federation were reported to feel
that emphatic support from the White House could clinch victory in the long fight to
obtain the so-called Medicare legislation.”65 Johnson’s potential weakness from civil
!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!
61
Vincent J. Burke, “Medicare Passes Senate By 49-44,” Los Angeles Times (1923-Current File), Sep 3,
1964, ProQuest Historical Newspapers Los Angeles Times (1881 - 1987), p1.
62
Ibid.
63
Telephone Conversation between Lyndon Johnson and Larry O’Brien, 9/3/1964, Tape WH6409.04,
Program No. 15, Citation No. 5467, Johnson Tapes: Telephone Series, Presidential Recordings Program,
Miller Center of Public Affairs, University of Virginia, http://whitehousetapes.net/tapes/johnson/telephone.
64
Telephone Conversation between Lyndon Johnson, Carl Albert and John McCormack, 9/3/1964, Tape
WH6409.03, Program No. 1, Citation No. 5445, Johnson Tapes: Telephone Series, Presidential Recordings
Program, Miller Center of Public Affairs, University of Virginia,
http://whitehousetapes.net/tapes/johnson/telephone.
65
William J. Eaton, “Labor Urges Johnson To Push Medicare Bill,” The Washington Post, Times Herald
(1959-1973), Sep 10, 1964, ProQuest Historical Newspapers The Washington Post (1877 - 1994), pA2.
49
rights only heightened the importance of the union vote. The President hoped their
enthusiastic support would help dampen negative reaction to the Civil Rights Act among
working class whites, and passing Medicare was a way to win that support.
Despite Johnson’s large lead in the polls—even those taken by the Republican
camp—his opponent, Senator Barry Goldwater was, “said to believe that ‘subtle
impulses,’ many of which the voters will not discuss candidly with pollsters or with any
other questioners, are at work among voters this year and could bring him victory.”
These impulses included “the white backlash on civil rights. Since the backlash
sentiment is composed at least in part of emotional components such as anger and fear, its
vote potential is especially hard to gauge.”66 Johnson was vulnerable to this thinking, as
he had a tendency towards paranoia.67 Because Goldwater opposed the popular Medicare
initiative, Johnson sought to gain ground with it. His theory was that, “on such issues
those with a concrete stake tend to outvote those protesting against a general condition.”68
At one union rally, Johnson “learned first-hand why most of organized labor prefers him
to his Republican rival,” the Washington Post reported. “This was because he spoke up
for medical care for the elderly under Social Security.” When the President departed
from his prepared remarks to endorse Medicare, the gesture “brought a louder burst of
!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!
66
New York Times (1923-Current file), “They're Off!” Sep 6, 1964, ProQuest Historical Newspapers The
New York Times (1851 - 2007), pE1.
67
See Robert Dallek, Flawed Giant: Lyndon Johnson and His Times, 1961-1973 (New York: Oxford
University Press, 1998). The title says much about Dallek’s portrayal—the biographer notes that Johnson’s
paranoia towards the end of his presidency begs the question of procedure in the case of incapacitating
mental illness to an executive.
68
They're Off! New York Times (1923-Current file); Sep 6, 1964; ProQuest Historical Newspapers The
New York Times (1851 - 2007) pg. E1
50
applause than anything in his speech.”69 The New York Times reported that passing
Medicare “would greatly enhance Mr. Johnson’s already formidable stature as a strong,
‘can-do’ President, much to his political benefit in the country as a whole.”70 In
particular, the paper thought that it “could mean the difference between victory and
defeat for the Democratic ticket in several states, notably in the Midwest, where there is a
close balance between the urban and rural vote. It could also give some Democrats an
edge in close contests for House and Senate seats.”71 The campaign in 1964 and
feedback on the trail led Johnson to again pressure Mills for help on Medicare.72
Johnson was motivated by the elections to push for the bill. Accordingly, the
President urged House Majority Leader Carl Albert to appeal to Mills. “Say to Wilbur
this is a national matter that involves the party, it’s been fighting for it for 15 years, that
we committed to it in our ‘60 platform, and we committed to it in our ‘64 platform,”
Johnson pled. “Try to prevail on him that he’s a national fella’, not just for Arkansas.
!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!
69
Edward T. Folliard, “Presidential Campaigning,” The Washington Post, Times Herald (1959-1973), Sep
16, 1964, ProQuest Historical Newspapers The Washington Post (1877 - 1994), pA1.
70
John D. Morris, “Congress Speeds Pace,” New York Times (1923-Current file), Sep 27, 1964, ProQuest
Historical Newspapers The New York Times (1851 - 2007), pE4.
71
Ibid.
72
Even if Medicare itself did not win votes for the President, bringing the public’s attention to Goldwater’s
position on similar matters helped. The Senator was inconsistent on his views of the politically sacred
Social Security system. Having to field questions on this issue did not help his cause. The New York Times
reported: “With respect to the Social Security system itself, the issue is not so clearly drawn. Although the
Democrats have implied that Mr. Goldwater would abolish it, he has never taken such a position and,
apparently recognizing that to be so identified is extremely damaging politically, has taken pains to deny
repeatedly the Democrats’ allegation. Just what Mr. Goldwater would like to see happen to the Social
Security system, however, is not entirely clear. He used to say it should be made voluntary. He abandoned
this some time ago and now says he wants to see it strengthened. But he has not said in detail just how,
although in the past he has voted for raising benefits.” This lack of clarity on a key issue could have
frightened voters. Social Security benefits had become a widely accepted and celebrated program—it was
politically untouchable. Goldwater’s back-and-forth stance on the program did not help his campaign.
Johnson’s opposite position would certainly curry favor with working class voters. John D. Pomfrets,
“Stakes are high: Campaign Issues – VI,” New York Times (1923-Current file), Oct 30, 1964, ProQuest
Historical Newspapers The New York Times (1851 - 2007), p24.
51
He’s head of the powerful Ways and Means Committee, he represents everybody.”73
Johnson was desperate for any Medicare legislation, and told Albert his willingness to
compromise on the program’s design. “We don’t have to have King-Anderson [liberal
compulsory care, Senate version],” Johnson said, “the reason we put that in there is so he
could have some running room and they could have their choice.”74 The President did
not care if the program were compulsory or voluntary, he would take anything Mills
would agree to: “He’s been against a compulsory care [King-Anderson], but this is
voluntary [Conservative Ribicoff approach]...We’d much prefer to let him modify it, and
we want to appeal to him to do that for his party and for his country.”75 The President
was even in favor of an entirely new proposal, instructing Albert to tell Mills, “Let’s have
a Mills-Anderson-Ribicoff proposal,” once again trying to put the Chairman’s name on
the bill.76
The President’s desperate campaigning did not bear fruit. Mills informed Carl
Albert and Speaker of the House John McCormack that he had enough votes to defeat the
measure in Conference. Mills had realized months before that there was no way the
House would accept Medicare. He knew in June there was no chance, when he could, at
most, get thirteen votes in Ways and Means, and he knew in September that the House
would never adopt the Senate bill. Accordingly, he sought to keep it from coming to a
!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!
73
Telephone Conversation between Lyndon Johnson, Carl Albert and John McCormack, 9/3/1964, Tape
WH6409.03, Program No. 1, Citation No. 5445, Johnson Tapes: Telephone Series, Presidential Recordings
Program, Miller Center of Public Affairs, University of Virginia,
http://whitehousetapes.net/tapes/johnson/telephone.
74
Ibid.
75
Ibid.
76
Ibid.
52
vote. While Johnson was looking for Medicare in any form, Mills was not the type of
Congressman to accept measures he and his Committee did not fully support. Moreover,
Mills did not share Johnson’s concern for the November elections, as he was running
unopposed in Arkansas’ Second District.77 In Conference, Mills came out against any
Medicare provision that tied to Social Security funding, compulsory or voluntary. “He
just said absolutely no he would not do anything,” Clinton Anderson informed the
President.78 Without Mills’ endorsement of a compromise, Medicare was effectively
dead.
For all the positive attention Johnson generated on Medicare, the American
Medical Association fueled plenty of negative coverage, both in the public and with
intense lobbying in Washington. Utilizing the same anti-socialist rhetoric of previous
attempts at passing Medicare, the AMA effectively scared some Democratic
Congressmen into backing off of the measure. Johnson believed that the country wanted
Medicare, so, with the nation as his constituency, he openly supported it. Congressmen
from states with particularly strong and organized medical associations, or ones with
conservative constituencies to answer to, found that supporting Medicare was risky.
With the election around the corner, many Congressmen did not want to vote on the
measure. House Majority Leader Carl Albert told Johnson, “They’re just scared to death
!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!
77
"House General Elections, Arkansas, 1962-1966 All Districts," In CQ Voting and Elections Collection
(Web site) (Washington, DC: CQ Press, 2003), http://library.cqpress.com/elections/avg1962-3AR3.
78
Telephone Conversation between Lyndon Johnson and Clinton Anderson, 9/24/1964, Tape WH6409.15,
Program No. 12, Citation No. 5688, Johnson Tapes: Telephone Series, Presidential Recordings Program,
Miller Center of Public Affairs, University of Virginia, http://whitehousetapes.net/tapes/johnson/telephone.
53
of these damn doctors and I don’t know why.”79 For the President, passage of the
popular Medicare could balance his push for Civil Rights and the War on Poverty, but for
some Congressmen, Medicare was too contentious an issue to vote on before the election.
Ultimately, AMA opposition served to further escalate the debate on the issue in the
campaign.
Mills did keep from publicly breaking with the White House. He helped Johnson
to deadlock the Conference Committee, which did not reach an agreement on any bill.80
This kept the Social Security increases from passing, leaving open the strategy of tying
them to Medicare and forcing Republican support after the election. According to
conferee Sen. Albert Gore, Sr., “they were trying to leave Medicare standing bare…we’ll
put it together in a package [next year],” hinting at the combination bill that was to
come.81 Despite upsetting the President and many Democrats during the behind the
scenes negotiations, Wilbur Mills had held to his earliest stated position—if he could not
report out a bill containing Medicare from Ways and Means, he would block the Social
Security benefit increase and bring both issues up together later. While Johnson and
other Democrats were eager to pass anything called “Medicare,” Mills, unaffected by
election-year politics, refused to jam through a compromise measure. True to his
!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!
79
Telephone Conversation between Lyndon Johnson and Carl Albert, 9/3/1964, Tape WH6409.05,
Program No. 2, Citation No. 5470, Johnson Tapes: Telephone Series, Presidential Recordings Program,
Miller Center of Public Affairs, University of Virginia, http://whitehousetapes.net/tapes/johnson/telephone.
80
It is rare that a Conference Committee is deadlocked—they can usually find some ground to compromise
on and pass legislation. In this case, though, the deadlock prevented anyone from having to go on record
about Medicare.
81
Telephone Conversation between Lyndon Johnson and Albert Gore, Sr., 10/2/1964, Tape WH6410.01,
Program No. 4, Citation No. 5804, Johnson Tapes: Telephone Series, Presidential Recordings Program,
Miller Center of Public Affairs, University of Virginia, http://whitehousetapes.net/tapes/johnson/telephone.
54
reputation for stubborn perfectionism, the Chairman stood pat on his position, knowing
that Medicare did not have the necessary votes in the House.
TAKE IT TO THE PEOPLE
The Kerr-Mills expansion—passed in 1965 as Title 19 of the Social Security Act,
and later dubbed Medicaid—was a non-factor in this debate, but it was not entirely
absent. Larry O’Brien reported to Johnson early in 1964 that Mills, “has some
amendments to the Kerr-Mills,” in a tone that suggested this measure was expected,
showing that Chairman Mills had espoused this approach to some degree.82 O’Brien also
worried about Mills bypassing Medicare altogether, in favor of widening the original
Kerr-Mills Act as an alternative. Later, Mills suggested that the Kerr-Mills expansion
might be attached to Social Security benefits along with Medicare in the Committee on
Ways and Means—a measure he had discussed with the Department of Health, Education
and Welfare.83 When Ways and Means decided not to attach Medicare to the Social
Security benefits, Mills told O’Brien that he preferred to “put Kerr-Mills over to next
year,” showing he expected to take it up again.84
!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!
82
Telephone Conversation between Lyndon Johnson and Larry O’Brien, 5/18/1964, Tape WH6405.08,
Program No. 1, Citation No. 3472, Johnson Tapes: Telephone Series, Presidential Recordings Program,
Miller Center of Public Affairs, University of Virginia, http://whitehousetapes.net/tapes/johnson/telephone.
83
Telephone Conversation between Lyndon Johnson and Larry O’Brien, 6/11/1964, Tape WH6406.06,
Program No. 2, Citation No. 3686, Johnson Tapes: Telephone Series, Presidential Recordings Program,
Miller Center of Public Affairs, University of Virginia, http://whitehousetapes.net/tapes/johnson/telephone.
84
Telephone Conversation between Lyndon Johnson and Larry O’Brien, 6/22/1964, Tape WH6406.12,
Program No. 7, Citation No. 3804, Johnson Tapes: Telephone Series, Presidential Recordings Program,
Miller Center of Public Affairs, University of Virginia, http://whitehousetapes.net/tapes/johnson/telephone.
55
The Kerr-Mills expansion was certainly unimportant to the President, as it was
overshadowed completely by Medicare (a program for the elderly). President Johnson
did not feel particularly strongly about Medicare’s form—he just wanted a bill to show
off while campaigning, and had successfully crafted a brand name that quickly became
popular among working-class and elderly Americans. While behind the scenes Medicare
was amorphous, the legislation bore a brand name that was popular in the newspapers
and easily identifiable to the public. Medicare was a hot national issue, and became a
central part of the Johnson platform. The “Kerr-Mills expansion” lacked the “sex appeal”
of Medicare, as Johnson said to Mills on the telephone in June.85 If it could be combined
with Medicare, though, Johnson would have supported it, reflecting his liberal attitude
toward health care. While it was not important to the President, he approved of
expanding the Kerr-Mills program for the needy elderly, an initiative Wilbur Mills was
interested in pursuing in early 1964.
Stomaching the defeat on Medicare, Johnson took the issue to the public,
continuing to endorse it as a priority in his 1964 campaign platform. Senate Democrats
felt confidently that the election would change the outlook on Medicare for next year—a
sentiment Johnson echoed. Senator George Smathers had found that the best poll he had
been able to make “showed 80% favor this program.”86 It was “the most popular
!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!
85
Telephone Conversation between Lyndon Johnson and Larry O’Brien, 6/11/1964, Tape WH6406.06,
Program No. 2, Citation No. 3686, Johnson Tapes: Telephone Series, Presidential Recordings Program,
Miller Center of Public Affairs, University of Virginia, http://whitehousetapes.net/tapes/johnson/telephone.
86
Senator Smathers told Senator Clinton Anderson, who reported this to the President. Telephone
Conversation between Lyndon Johnson and Clinton Anderson, 9/24/1964, Tape WH6409.15, Program No.
12, Citation No. 5688, Johnson Tapes: Telephone Series, Presidential Recordings Program, Miller Center
of Public Affairs, University of Virginia, http://whitehousetapes.net/tapes/johnson/telephone.
56
program” in his district.87 Sen. Albert Gore, Sr. told Johnson, “I think you can take this
issue to the people, that we will get a good health plan next year.”88 Senator Clinton
Anderson told Johnson of Mills, “I think if these boys go into his district and campaign
he’ll change his tune a little bit…Wilbur will take a little different view of [Medicare]
this next election.”89 With that, Congress recessed and Johnson hit the campaign trail
full-time, promising to bring Medicare to the people.
!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!
87
Ibid.
Telephone Conversation between Lyndon Johnson and Albert Gore, Sr., 10/2/1964, Tape WH6410.01,
Program No. 4, Citation No. 5804, Johnson Tapes: Telephone Series, Presidential Recordings Program,
Miller Center of Public Affairs, University of Virginia, http://whitehousetapes.net/tapes/johnson/telephone.
89
Ibid.
88
57
CHAPTER THREE
A REAL COMPREHENSIVE BILL
Democrats won in a landslide in the November ‘64 elections, with Lyndon
Johnson defeating Barry Goldwater 486 to 52 in the Electoral College.1 The Democratic
majority in the House grew to 293-140. In the Senate, Democrats enjoyed a 68-32
advantage.2 Finally, in Wilbur Mills’ Ways and Means Committee, three Republicans
lost reelection and were replaced with Democrats, swinging the Committee makeup to
18-7.3
The election sweep was taken as an endorsement of Medicare, as it had been a big
campaign promise from Johnson. Mills later recalled, “The election of the President in
1964 had the major impact, made the major difference. He had espoused it [Medicare] in
his campaign, you know, and here he was elected by a 2-to-1 vote, which was a pretty
strong endorsement of it, I thought. I thought the time had come to pass it.”4 With a
large Democratic majority in Congress and Committee, and with Medicare as a key part
of the platform, passage in 1965 became a virtual certainty. The Los Angeles Times
!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!
1
It is easy to look at the sweeping results of the 1964 election and discredit Johnson’s anxiety about his
campaign. At no point, though, did his election feel like a sure thing. Johnson inherited the presidency, and
had always had doubts of his ability and qualifications. He had been alienated by the liberal elites in his
own party for his Southern roots, and he felt this alienation deeply. His anxieties, coupled with the
uncertainty about the effects of Civil Rights on the Democratic base in the South, made the election
anything but guaranteed for the President.
2
Social Security Online, "Vote Tallies for Passage of Medicare in 1965," Social Security Administration,
http://www.ssa.gov/history/tally65.html
3
Social Security Online, "Chapter 4: The Fourth Round, 1957 to 1965," Social Security Administration,
http://www.ssa.gov/history/corningchap4.html.
4
Transcript, Wilbur Mills Oral History Interview II, 3/25/87, by Michael L. Gillette, Internet Copy, LBJ
Library, p3.
reported, “The heavily Democratic Congress that convenes next Jan. 4 is considered
certain to approve some version of the controversial Medicare program.”5 The
Washington Post predicted, “When Congress reconvenes in January it will pass a bill
providing medical care for the aged.”6 Whether Mills had wanted it or not, the
Congressman would have been left behind if he did not take the measure up.
WILD-EYED RADICALS?
The comprehensive and compulsory King-Anderson bill was introduced as H.R. 1
in the House, bearing the honorary title as the first bill to be taken up in the 89th
Congress.7 This assurance of passage gave Mills’ Ways and Means Committee ample
time to craft a bill, putting the Chairman in a position of much greater comfort—he
would be able to report out a bill with overwhelming support. Going into committee,
Mills remembered, “I had counted the vote pretty well and knew I had enough votes to
pass it, more than enough.”8 Without the pressures of an upcoming election, the
committee went to work writing and revising the legislation. As Johnson had expressed
support in 1964 for essentially anything that could be called Medicare, the bill would be
shaped chiefly by Mills in committee. While the President would not fight over details,
!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!
5
Robert Barkdoll, “House Expected to Pass Medicare,” Los Angeles Times (1923-Current File), Nov 15,
1964, ProQuest Historical Newspapers Los Angeles Times (1881 - 1987) pg. FA.
6
The Washington Post, Times Herald (1959-1973), Expert Sees Passage of Medicare,
Nov 20, 1964, ProQuest Historical Newspapers The Washington Post (1877 - 1994) pg. B9.
7
King-Anderson was one of the original Medicare proposals—put forth by Cecil King and Clinton
Anderson—and the one that the Johnson administration espoused.
8
Transcript, Wilbur Mills Oral History Interview II, 3/25/87, by Michael L. Gillette, Internet Copy, LBJ
Library.
59!
he stayed on top of the Chairman, nudging him along. If Mills committed to a Medicare
program, he would be free to determine its shape.
With their backs to the wall, Republicans and the AMA began a desperate
strategy to oppose Medicare not any longer because it was too expansive and expensive,
but rather because it was too limited. Instead of stigmatizing Medicare as government
largesse, the AMA complained it was “limited to hospital and nursing home care,
representing only a fraction of the cost of sickness.”9 On February 17, the AMA offered
a “redefinition” of policy, creating its own substitute plan, called Eldercare, to compete
with Medicare.10 The AMA’s Eldercare was essentially an expansion of the existing
Kerr-Mills Act. Under it, the government would subsidize hospital, nursing home,
surgical, and drug charges for the elderly through a state program partially funded with
Federal dollars. Republican Senator Everette Dirksen, backed by the AMA, criticized
Medicare for failing to cover doctors’ bills: “Medicare, of course,” he noted, “would not
pay for any [doctors’] visits.”11 Instead, he supported Eldercare’s expanded Kerr-Mills
program. “Unlike Medicare, Kerr-Mills can provide, in addition to hospital and nursinghome care, funds for doctors’ bills, dental care, private nursing when needed, laboratory
and X-ray facilities, and prescribed drugs.”12 Republicans favored this approach because
it was run through the states, with matching federal dollars, and because it was voluntary
and only available to the needy elderly, whereas Medicare would be compulsory and
!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!
9
New York Times (1923-Current file), “A.M.A. Attacking Medicare by Mail,” Feb 17, 1965, ProQuest
Historical Newspapers The New York Times (1851 - 2007), p25.
10
Ibid.
11
U.S. Congress, Congressional Record 111 (2/17/1965): 2802.
12
Ibid.
60!
would cover all elderly people, regardless of income. At the same time, they claimed that
it would do more for the elderly than would Medicare, which would only cover
hospitalization. In promoting its plan, the AMA fundamentally altered its position on
government involvement in the healthcare system.
The claims of comprehensive care from the AMA were intentionally misleading.
The Kerr-Mills program had the potential to be comprehensive, but for that to happen,
states would not only have to adopt the program, but would have to agree to finance the
most liberal benefits allowable. Since the program’s inception in 1960, forty states had
adopted Kerr-Mills, and only 3 of those states offered comprehensive benefits.13 In
reality, the AMA and Republicans had espoused this position because, given its track
record, it was unlikely to produce any real change. Moreover, that change could be easily
controlled at the local level, where the organization was the strongest and the program
would be administered.
At the same time, the AMA’s cohesive opposition to Medicare began to crumble.
For example, a group “Doctors for Medicare” took an advertisement out in the New York
Times, claiming that “it stops being right when the association pretends that what it is
fighting is ‘the invasion of the voluntary relationship between the patient and the
physician.’” The doctors asserted, “Nothing in the medicare plan interferes in any way
with the patient-doctor relationships.”14 Another article quoted a dissenting AMA
!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!
13
Social Security Online, "Chapter 4: The Fourth Round, 1957 to 1965," Social Security Administration,
http://www.ssa.gov/history/corningchap4.html.
14
New York Times (1923-Current file), “Doctors Against Medicare," Dec 3, 1964, ProQuest Historical
Newspapers The New York Times (1851 – 2007), p44.
61!
member, Dr. Walter O’Donnell. “As a practicing physician,” O’Donnell said, “I resent
the [AMA’s] idea...that the Government proposal has been concocted by a bunch of wildeyed radicals whose aim is not merely to socialize medicine but to undermine the
American way of life.”15 The New York Times noted that there were “important fissures
within the ranks” of the AMA.16
The administration was aware of the AMA’s disorganization, and stood ready to
capitalize. Wilbur Mills told President Johnson, “Don’t you worry one minute about
these doctors and insurance companies organizing against this bill…The AMA’s going in
all directions. I have even had them just in confidence come to me at the last minute
telling me they’d accept the [Social Security] payroll tax if we’d use it to finance our
program with the state administering it.”17 Of course, Mills said, “you couldn’t have
that.”18 But this last minute compromise signaled clearly that the AMA was disorganized
and incapable of even slowing Medicare’s passage down. Coupling this lack of
opposition with the demand for greater benefits under Eldercare, and the AMA had
essentially removed itself from the equation.
The AMA’s disorganization aside, Democrats did not want a bill that would
provide a safety net to the elderly who landed in poverty. Instead, they wanted a program
that would prevent people from getting there in the first place—this was the concept of
!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!
15
Walter O'Donnell, “Doctor Criticizes A.M.A.,” New York Times (1923-Current file), Dec 24, 1964,
ProQuest Historical Newspapers The New York Times (1851 - 2007), p18.
16
Semple, “How A.M.A. Battles the Medicare Bill,” p115.
17
Ibid.
18
Ibid.
62!
Medicare, and the reason why its universality was so important.19 Democrats adamantly
opposed any means test. This view strongly affected the way they viewed the original
Kerr-Mills legislation. It was an unwelcome, unacceptable substitute for Medicare.20 In
addition, for many, the program had already proven to be a failure, and carried that
stigma with it.21
A more moderate Republican compromise came from John Byrnes, who also
criticized Medicare for its limited scope. The Congressman offered a bill that would
provide voluntary health insurance that went beyond hospital care to include doctor’s fees
and prescription drugs. Unlike the state-controlled Kerr-Mills program, the Federal
government would use funds from the general treasury to reimburse those who bought
Byrnes’ plan on a sliding scale depending on their income.22 While this solution was not
suitable for most Democrats because of its means test, its comprehensive nature and
Federal control made it more moderate. For those who opposed financing Medicare
through a payroll tax, Byrnes’ plan was appealing. This approach earned the name
“Bettercare” in the media.23
!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!
19
Paul Starr, The Social Transformation of American Medicine (New York, NY: Basic Books, 1982), pg.
368-371.
20
For example, Congressman Wolfe from New York: “Can you imagine the psychological state of a
person, ill, overwrought with fear, hurting with pain, who has to go before a State board and take an oath of
poverty for himself and at the same time sign a statement allowing the State to investigate the finances of
his children? Seemingly Kerr-Mills’ only attribute is that it would make an excellent primer for a short
story by Edgar Allen Poe.” U.S. Congress, Congressional Record 111 (2/17/1965): 2944.
21
Starr, Social Transformation of American Meidcine, p368-371.
22
Sheri I. David, With Dignity: the Search for Medicare and Medicaid (Westport, CT: Greenwood Press,
1985), p124-126.
23
Ibid., p124-126.
63!
“THERE’S A READY DEMAND AND I KNOW IT!”
True to his reputation, Mills steered his Committee to an inclusive bill that could
pass handily, pasting together elements from each camp. The Chairman proposed a
solution that combined the liberal King-Anderson version of Medicare that covered
hospital insurance through a compulsory payroll tax, Byrnes’ voluntary supplemental
plan for doctors’ bills, and a version of the AMA’s Eldercare, an expansion of Kerr-Mills
for the indigent elderly. To these medical provisions, Mills attached the benefit increase
for Social Security that had failed to escape Conference Committee in 1964. KingAnderson would become known as Medicare Part A, Byrnes’ voluntary physicians
coverage would become Medicare Part B, and a substantially altered version of
Eldercare, the Kerr-Mills expansion, would become Title 19, later to be known as
Medicaid. This move followed the strategy Mills and Johnson had discussed in 1964 as a
way to back Republicans into supporting Medicare. In order to oppose it, they would
have to vote against increased Social Security benefits, aid that both parties agreed was
sorely necessary. For Wilbur Mills, this position dropped Kerr-Mills expansion into his
lap. He was eager to include the proposal in a package deal, the way he had discussed
with Johnson in 1964. In doing so, he could now pick up Republican votes. As Wilbur
Cohen said, after this strategy was in place, “At least no one will vote against it.”24
The AMA had opened the door for the comprehensive combination by criticizing
Medicare’s limited scope, effectively goading the Democrats into a bigger bill. Still,
!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!
24
Ibid., p129.
64!
current historiography reports that when Mills combined the four parts, his proposal took
the Committee and HEW by surprise.25 This idea is usually discussed by historians as
though it came out of thin air. The “three-layer-cake” that Mills assembled, including
Byrnes’ plan, had never been discussed before. But a combination of Kerr-Mills
expansion, Social Security benefit increases and Medicare had; in a conversation with
Johnson in 1964, Mills reported speaking to the Secretary of HEW about that approach.
While the inclusion of Kerr-Mills expansion had apparently not made much of an impact
on the administration, Mills had kept it in mind, telling Larry O’Brien in July of 1964 he
would put it over until next year.26 When the AMA supported a version of it with
Eldercare, it became easy to bring the Kerr-Mills expansion into the fold. Mills was
praised publicly27 for his combination of Medicare, Byrnes’ “Bettercare,” and Eldercare,
despite the fact that Title 19 (expansion of the Kerr-Mills Act) was much different than
the AMA’s proposal. As Mills even said later on the floor of the House, “The third part
of this medical package [Kerr-Mills expansion] results from the thinking in the Ways and
Means Committee last year and largely consists of the tentative decisions that were taken
at that time for drafting purposes within the Committee.”28 While he was credited with
!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!
25
“As the Ways and means hearings came to an end on March 3, Mills surprised everyone with an
astonishing ‘legislative coup.’ He suggested putting together all three of the major bills: King-Anderson,
the AMA’s Eldercare, and the Byrnes Bill. The result would be a three-layer program, or, as it was fondly
called by HEW, a ‘three-layer cake.’” Sheri David, With Dignity, p129.
26
Telephone Conversation between Lyndon Johnson and Larry O’Brien, 6/22/1964, Tape WH6406.12,
Program No. 7, Citation No. 3804, Johnson Tapes: Telephone Series, Presidential Recordings Program,
Miller Center of Public Affairs, University of Virginia, http://whitehousetapes.net/tapes/johnson/telephone.
27
Sheri David, With Dignity, p130.
28
U.S. Congress, Congressional Record 111 (4/7/1965): 7209.
65!
working Eldercare into the bill, Mills admitted that the Kerr-Mills portion of the
legislation was decided upon in 1964.
Mills had another motivation for combining Kerr-Mills expansion with Medicare,
aside from bringing in Republican support. The Chairman had always been concerned
with the stress Medicare would put on Social Security—the reason he did not endorse the
measure before the Democratic landslide. In enacting Medicare as just a program of
hospital benefits, Mills worried that Congress would later cave in to expansionary
pressure, and broaden Medicare to include a greater portion of the population. In a
magazine article called “Reflections on Enactment of Medicare and Medicaid,” Wilbur
Cohen, former Assistance Secretary of Health, Education and Welfare, claimed this fear
was behind Mills’ motivation for creating Title 19 (Medicaid):
The inclusion of Medicaid in the 1965 law evolved when Mr. Wilbur
Mills asked me what his answer should be to the inevitable question he
thought he would be asked during the legislative debate: 'Isn't Medicare an
'entering wedge' to a broader program of nationwide 'compulsory'
insurance coverage of everyone?' I suggested that if he included some
plan to cover the key groups of poor people, he would have a possible
answer to this criticism. Medicaid evolved from this problem and
discussion.29
Thus, Mills hoped to stem the growth of Medicare by covering groups that could later
demand benefits. This would explain why Mills had always brought up Kerr-Mills
expansion when discussing Medicare, and it is consistent with his dogged protection of
Social Security’s integrity. Given the degree of freedom Johnson gave him to craft the
!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!
29
Wilbur Cohen, "Reflections on Enactment of Medicare and Medicaid," Health Care Financing Review,
1985 Annual Supplement, 1985, p3-11.
66!
legislation, he could easily expand Kerr-Mills alongside Medicare. This would
simultaneously please the liberal White House for enacting wider benefits, and, in Mills’
thinking, prevent later expansionary pressure on Medicare.
Wilbur Mills, Wilbur Cohen, House Speaker John McCormack, and Majority
Leader Carl Albert called President Johnson on March 23 to report the Committee’s
decision—a conversation that shows the President’s lack of involvement in the final
omnibus form of the bill.30 Mills opened the conversation, delightedly informing
Johnson, “I think we’ve got you something that we’ll not only run on in ‘66, but
thereafter.”31 Mills’ only concern was the cost of the program. “There’s about $450
million in this bill out of the general funds of the treasury for which you haven’t
budgeted,” Mills told the President.32 Johnson was prepared to spend on healthcare, and
replied that, “by withholding and just threatening and ultimatum and being meaner than
you or [staunchly conservative, committed segregationist, Chairman of the Senate
Finance Committee] Harry Byrd,” he had managed to stay $800 million under what
Congress appropriated for the year, in addition to reducing the deficit $1 billion.33 “Tell
Wilbur [Cohen] that $400 million’s not gonna separate us friends when it’s for sickness,
because there’s a ready demand and I know it!” the President said, greenlighting the
!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!
30
McCormack was Speaker of the House, Albert was Majority Leader. Telephone Conversation between
Lyndon Johnson, John McCormack, Wilbur Mills, Wilbur Cohen and Carl Albert, 3/23/1965, Tape
WH6503.11, Program No. 9, Citation No. 7141, Johnson Tapes: Telephone Series, Presidential Recordings
Program, Miller Center of Public Affairs, University of Virginia,
http://whitehousetapes.net/tapes/johnson/telephone.
31
Ibid.
32
Ibid.
33
Ibid.
67!
program enthusiastically.34 The conversation reflected Johnson’s general attitude toward
spending on healthcare—he was all for it.
Mills passed the phone off to Wilbur Cohen, who walked the President through
the final version of the legislation. Cohen boasted to Johnson, “Not only everything you
wanted, but we got a lot more on this thing. It’s a real comprehensive bill.”35 Cohen
described the voluntary, supplementary program of physician services that they “stole
from Byrnes,” which would be financed through Blue Shield and imposed a co-payment
and coinsurance. He then shared the final details of the hospital coverage—Medicare—
noting it gave 60 days of hospital care with a $40 deductible. Notably, Cohen did not
even mention the expansion of Kerr-Mills (Title 19), which would later be dubbed
Medicaid. Johnson was satisfied, commended them for their work, and urged the men to
“not let this thing lay around so they can generate opposition to it.”36 He reminded that,
“nine out of ten things I get in trouble on is because they lay around.”37 Mills and the
others vowed to make haste.
Johnson quickly got in touch with the AFL-CIO President George Meany to seek
his help. “Healthcare is ready to go in the House,” Johnson told Meany, reminding him
that, “We want to get the things for the people so they can’t get mad at us.”38 At the
!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!
34
Ibid.
Telephone Conversation between Lyndon Johnson and John McCormack, Wilbur Mills, Wilbur Cohen
and Carl Albert, 3/23/1965, Tape WH6503.11, Program No. 9, Citation No. 7141, Johnson Tapes:
Telephone Series, Presidential Recordings Program, Miller Center of Public Affairs, University of Virginia,
http://whitehousetapes.net/tapes/johnson/telephone.
36
Ibid.
37
Ibid.
38
Telephone Conversation between Lyndon Johnson and George Meany, 3/29/1965, Tape WH6503.14,
Program No. 11, Citation No. 7178, Johnson Tapes: Telephone Series, Presidential Recordings Program,
Miller Center of Public Affairs, University of Virginia, http://whitehousetapes.net/tapes/johnson/telephone
35
68!
same time, Johnson held out a carrot for Meany, reminding him that more labor friendly
bills were on the horizon. “We want to get these things out so they can’t clip us when we
come up with our stuff—14b and unemployment compensation and the jobs and things of
that nature.”39 The President reminded Meany, “The average millionaire doesn’t care
whether you got medical care or not, we’re getting that for the laboring folks…So you get
your best people hitched up…then when we get that behind us, then you and I can sit
down and we can get our other stuff lined up. These boys down here can’t do this by
themselves.”40 By mobilizing labor support for Medicare, Johnson hoped to help Mills
speed it through Congress.
A RUBBERSTAMP OPERATION
Wilbur Mills took Johnson’s push to heart, and with labor’s help was able to get
the bill through the Rules Committee in just one and a half days, making good on the
President’s praise that “you always get your rules pretty quick.”41 Furthermore, once the
bill was through the Rules Committee, Mills introduced the package—Medicare Part A,
Medicare Part B, Title 19 (the expansion of the Kerr-Mills Act, later called Medicaid),
!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!
39
“14b” refers to the effort to repeal the “right to work” clause of the Taft-Hartley Act, which forbade
agreements between labor unions and employers, thus minimizing the power of unions. Repeal of 14b
would be greater power to organized labor.
40
Telephone Conversation between Lyndon Johnson and George Meany, 3/29/1965, Tape WH6503.14,
Program No. 11, Citation No. 7178, Johnson Tapes: Telephone Series, Presidential Recordings Program,
Miller Center of Public Affairs, University of Virginia, http://whitehousetapes.net/tapes/johnson/telephone
41
Telephone Conversation between Lyndon Johnson, John McCormack, Wilbur Mills, Wilbur Cohen and
Carl Albert, 3/23/1965, Tape WH6503.11, Program No. 9, Citation No. 7141, Johnson Tapes: Telephone
Series, Presidential Recordings Program, Miller Center of Public Affairs, University of Virginia,
http://whitehousetapes.net/tapes/johnson/telephone.
69!
and the increase in Social Security cash benefits—on the floor under closed rule, meaning
that no amendments could be proposed, and debate on the measure was limited to 10
hours.42
Republican Congressman Clarence Brown of Ohio, one of the first to offer
commentary, complained on the floor about the pace of the bill: “I cannot help but
wonder in my own mind as to why the great haste. We were asked to rush it through the
Committee on Rules and it was rushed through the Committee on Rules in a day and a
half of hearings. It was reported out of the Committee of Ways and Means as it is in its
present form without hearing on many sections of the bill, some of them being the most
important part of it. I cannot help but wonder why the haste.”43 Of course, the haste was
intentional—Mills, Johnson, and all of Medicare’s supporters hoped to limit the time
opposition had to organize. The point was to jam the bill through Congress.
The little time that Congressmen had for preparation worried Brown, though, who
was unsure that anyone really understood the bill’s impact. “I do not know how much
time my colleagues have devoted to studying this bill or how much attention has been
given to it…Frankly I do not know all that is in this bill and I cannot answer all the
questions that might be asked about it. I am not sure there is anybody in the House who
can answer all of the questions that might arise in connection with this legislation.”44
Brown’s doubt that those in the House understood fully the legislation’s contents gives
!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!
42
U.S. Congress, Congressional Record 111 (4/7/1965): 7202-7233.
U.S. Congress, Congressional Record 111 (4/7/1965): 7203.
44
Ibid.
43
70!
credence to the idea that Kerr-Mills expansion (Title 19, later Medicaid) was largely
overlooked. Faced with a much more detestable, flagship program in Medicare Part A
and a limited amount of time, opponents unanimously glossed over the creation of Title
19. As he summarized the bill, Brown brought into question whether he even knew the
Kerr-Mills expansion was happening, failing to mention it in his extensive remarks.
Because the combination had been sudden for many, it is not surprising that its contents
were not widely understood.45
With the bill entering the House under gag rule, many were upset that such a
contentious and landmark piece of legislation would not get the debate it deserved.
Congressman Thomas Curtis (R) from Missouri, who had earlier introduced the AMA’s
Eldercare program in the House, spoke angrily of the procedure: “It is very obvious that
this is not a debate. There is no decision going to be made in the well of the House. This
is a farce. There are scarcely 100 Members on the floor of the House now…for the
simple reason everyone knows that the decision has been made outside the well of the
House. The Congress in this instance is no longer a study and a deliberative body. This
is a rubberstamp operation.”46 Curtis insisted that, “Members themselves have already
made up their minds as to what they are going to do; apparently they know what is in
these 196 pages. In my judgment we do not know these things and we cannot, of course,
move forward with any intelligent discussion of the bill...We do not know what we are
!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!
45
Nearly every Congressman to speak walked through the bill’s proposals, commenting along the way.
Brown was no exception—he walked through Medicare, the supplementary hospital insurance (Medicare
Part B), and the benefit increases to Social Security, never once mentioning Title 19/Kerr-Mills expansion.
U.S. Congress, Congressional Record 111 (4/7/1965): 7202.
46
U.S. Congress, Congressional Record 111 (4/7/1965): 7229.
71!
talking about in this area.”47 Finally, Curtis railed on the publicity the bill had received,
lashing out against the notion of a mandate from the election: “Just because there is a
popular label on this bill it will be passed.”48 The assertion that the popular label
“Medicare” was driving passage of the bill was spot on. It was certainly the way that
President Johnson viewed the legislation—he had been pleading with Wilbur Mills for a
bill he could call “Medicare” for over a year. For its opponents, this was rather
unsettling. Rep. Curtis went as far as to refuse to address his problems with the bill,
saying, “I am not trying to engage in a debate on the substantive issues of this bill
because we are not in a position to advise this House with any intelligence.”49
Other opponents of the legislation did venture to debate, and did so vigorously.
The central argument on the floor came down to the King-Anderson (Medicare Part A)
portion of the bill. Opponents disliked that the measure would be financed through the
Social Security system, for several reasons. First, while Democrats insisted that
Medicare would never draw on Social Security dollars, Republicans were skeptical.
They argued that, while the two funds could remained separate initially, the rising costs
of hospitalization (Medicare part A) would eventually necessitate a shift in percentage
from Social Security to Medicare, intruding on the sacred social insurance program.
Others objected to the idea of any prepayment. Congressman Schneebeli (R) voiced his
objections: “Under the payroll tax, an erroneous concept has been sold to the people that
!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!
47
Ibid.
Ibid.
49
U.S. Congress, Congressional Record 111 (4/7/1965): 7231.
48
72!
they have paid for their benefits, that they have bought something as a matter or right,
under such a concept there is no flexibility to make changes because the people tell you,
‘We have bought this, and you cannot make any change except to liberalize it.’”50
Instead of creating the false pretense of insurance, some Congressmen would have
preferred to finance hospital benefits from general revenue, which would allow the
government to make cuts more easily, should they become necessary—this was the
concept of Byrnes’ plan, before it was made a complementary measure to Medicare Part
A. To opponents, dressing entitlement up as insurance seemed dangerous.
Unfortunately for many opponents of healthcare reform, Mills had forced their
hand by tying the popular Social Security increases to Medicare. In order to vote for the
items they wanted, some Republicans would have to stomach voting for Medicare; if they
refused, a future opponent could claim that the Republican candidate had stifled Social
Security, the equivalent of a political death sentence.51 In this regard, Mills’ strategy
worked flawlessly—many Republicans truly did have their hands tied. Congressman
Grover, a Republican from New York, remarked, “In supporting this revised omni-bus
bill, I am looking affirmatively to the noncompulsory medical coverage (Byrnes’ Plan,
Medicare Part B) and to the much-needed increase in [Social Security] benefits and
earnings limitation, but with cautious reservation on the social security approach [to
!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!
50
U.S. Congress, Congressional Record 111 (4/7/1965): 7233.
Telephone Conversation between Lyndon Johnson, Wilbur Mills and Larry O’Brien, 6/11/1964, Tape
WH6406.06, Program No. 2, Citation No. 3686, Johnson Tapes: Telephone Series, Presidential Recordings
Program, Miller Center of Public Affairs, University of Virginia,
http://whitehousetapes.net/tapes/johnson/telephone.
51
73!
Medicare Part A].”52 This illustrated his happiness with the Republican portions of the
proposal—Byrnes’ plan (Medicare Part B) and the Social Security benefit increases—and
discontent with Medicare Part A. Grover admitted supporting the bill despite Medicare,
rather than because of it. Congressman Langden conceded that the Republican proposals
made the bill more attractive to him: “As we note in the minority views in the report on
the bill before us, the hospitalization program proposed in this bill, as the majority now
admits, was ‘oversold.’ Many of us have long contended that the Medicare provisions
were completely inadequate. In an effort to stave off the inevitable disillusionment, a
number of Republican proposals were tacked onto the bill. I should say that these
additions were sorely needed.”53 In short, for Langden, Mills’ combination had created a
bill that he could at least praise in some way. Without those provisions, the Republican
would have likely railed against Medicare.
Congressman John Anderson of Illinois54 complained of the combination on the
floor: “I voted for all the benefits that passed the House last year…These Social Security
amendments were agreed upon by the Conference Committee in the 88th Congress. They
should have been enacted into law last year. They would have been had it not been for
the fact that the administration wanted to withhold those advantages of this bill purely
and simply as a bargaining device like the frosting on a cake.”55 The strategy had many
seething in anger on the floor of the House. The public sensation of Medicare
!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!
52
U.S. Congress, Congressional Record 111 (4/8/1965): 7377.
U.S. Congress, Congressional Record 111 (4/8/1965): 7353.
54
Not to be confused with Clinton Anderson from New Mexico, co-sponsor of the King-Anderson bill.
55
U.S. Congress, Congressional Record 111 (4/8/1965): 7376.
53
74!
overshadowed the detailed nature of the legislation, especially Kerr-Mills expansion—
what would later be known as Medicaid. Congressman Anderson was against the way
Medicare Part A would be financed and administered, complaining about the “ill-advised
concept of using a regressive payroll tax for a hospital room and board program which
many of our 18 million senior citizens over 65 were led to believe at that time was the
answer to all of their medical care problems.”56 Anderson resented the fact that the
publicity campaign for the Medicare brand had convinced senior citizens that all of their
problems would be solved. That campaign strategy, though, had halted the Social
Security benefit increase in 1964, then incorporated it to the Medicare brand, backing
Congressmen like Anderson into a corner.
Congressman John Byrnes (R) of Wisconsin, who originally proposed the
voluntary supplemental program that Mills turned into Medicare Part B, shared
Anderson’s feeling of coercion. In order to vote for his own bill, Byrnes would have to
accept its alternative, Medicare Part A, as well. He voiced his displeasure with the
combination of different bills, saying, “I regret that we must consider a bill of this
proportion, dealing as it does with such sensitive and far-reaching matters, all in one bill.
As a result, we are required to consider the good and the bad, with no opportunity to
separate, as it were, the wheat from the chaff.”57 Instead, Byrnes believed that, “The
medical provisions should stand or fall on their own merits, and the amendments to oldage, survivors, and disability insurance system, the cash benefit program, should stand or
!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!
56
57
Ibid.
U.S. Congress, Congressional Record 111 (4/7/1965): 7219.
75!
fall on the merits of those amendments.”58 To allow those measures to stand on their
own, Byrnes introduced a motion to recommit, which would take the omni-bus package
of Medicare Parts A and B, Kerr-Mills expansion, and the Social Security cash benefit
increase out of debate, and substitute it with the original version of Byrnes’ plan alone.
In this way, Congress could override the Ways and Means Committee’s gag rule, and
vote on individual parts of the bill. After some debate, though, that motion failed by the
close vote of 236 to 191.59 Immediately after the bill failed to be recommitted, debate on
Wilbur Mills’ bill closed and the Speaker called for “yeas” and “nays.” The omnibus
Social Security Amendments of 1965 passed 313 to 115.60 A full seventy-seven
Congressmen who had voted to recommit proceeded to vote to pass the measure they had
just threatened. Seventy Republicans voted “yea,” evidence that Mills’ strategy had
succeeded in forcing them to weigh the political fallout of voting against any Social
Security increases.61
As the debate above shows, the majority of discussion about the Medicare
package bill did not even touch upon Title 19 (later known as Medicaid)—no one stood
strongly for or against this expansion of Kerr-Mills. Those who did speak in favor KerrMills expansion, though, were Democrats and Republicans alike, showing the lack of
controversy surrounding the proposal. When Kerr-Mills expansion was addressed, it
never managed to draw the same impassioned rhetoric that Medicare did. Democrats
!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!
58
Ibid.
U.S. Congress, Congressional Record 111 (4/8/1965): 7443.
60
Social Security Online, "Vote Tallies for Passage of Medicare in 1965," Social Security Administration,
http://www.ssa.gov/history/tally65.html
61
Ibid.
59
76!
who did speak of Kerr-Mills expansion failed to muster any sort of gusto for it. Most
commonly, a Democratic Congressman would lavish Medicare with endorsements,
calling upon rising hospital costs and the financially crippling frequency with which the
elderly became acquainted with those costs. After paragraphs of praise for Medicare, a
Congressman might quickly give his stamp of approval for Title 19 (Kerr-Mills
expansion) by reading out its provisions. A typical example of the mundane commentary
comes from Congressman Fino, who spent two full pages in the Congressional Record
urging Medicare’s passage, then quickly noted:
The Social Security Act of 1965 also improves and extends the Kerr-Mills
program. The bill would establish a new title of the Social Security Act to
extend the advantages of an expanded medical assistance program not
only to the aged who are indigent but also to needy individuals or the
dependent children, blind, permanently and totally disabled programs, and
to persons who would qualify under these programs if in sufficient
financial need. Kerr-Mills has been found to be a useful way to provide
for the basic medical needs of people who desperately need financial help.
This section of the 1965 bill would make medical assistance available to
more people who need it.62
While certainly accurate, statements like these highlighted the basic acceptance and
almost apathy towards Title 19 from Democrats. This is not surprising, given they had
rallied against Eldercare, from which Title 19 was supposedly derived.
When the Kerr-Mills expansion did come up, it was sometimes spoken of as a
measure primarily for the elderly, bypassing the fact that it primarily expanded coverage
to many who were under 65. Congressman Cecil King of California, original co-sponsor
of the King-Anderson bill (Medicare Part A), spoke of it as it related to the aged, and
!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!
62
U.S. Congress, Congressional Record 111 (4/7/1965): 7205.
77!
nothing else. The Congressman filled three pages in the Congressional record with his
remarks, and just one sentence touched on Title 19. He said, “Finally, the State-Federal
programs of medical assistance for the needy aged, relieved of a substantial part of their
burden and otherwise strengthened by the proposed legislation, will be better able to meet
the medical needs and other needs of our indigent elderly citizens.”63 The measure, while
it did broaden coverage of the elderly, actually included provisions to make sure that
benefits were equal across social categories, giving no special treatment to the elderly at
all. Under Title 19, the elderly were on equal footing as those on other programs, like
Aid to Families with Dependent Children. On the floor of the House, though, it was
discussed as if it were chiefly a measure for the aged. Indeed, Republican complaints
about the lack of understanding of the bill’s content were, in fact, fairly accurate.
Title 19, in the form Mills proposed, differed substantially from Eldercare, and
yet took on the AMA’s brand in its discussion. Mills had included children and other
needy people under 65, whereas Eldercare was specifically crafted for the elderly.
Additionally, to combat Kerr-Mills’ poor record of implementation, Title 19 contained a
deadline for states to adopt its provisions. Under this law, states had to expand their
existing Kerr-Mills programs to Title 19’s specifications by June 30, 1967, effectively
forcing the 40 states already on the program to adopt the new measure or lose Federal
dollars. This incentive was designed to jumpstart Title 19’s implementation in a way that
!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!
63
U.S. Congress, Congressional Record 111 (4/7/1965): 7229
78!
the AMA’s Eldercare did not.64 Whereas Eldercare was written with the intention of
continuing Kerr-Mills poor history, Title 19 expanded the provisions to include, for the
first time, other needy groups under 65. Still, Mills’ Title 19 was spoken of as if it were
Eldercare. Representative Curtis, who introduced Eldercare on the floor of the House,
equated the measures in his comments: “The chairman mentioned in the third part of this
three-layer cake which he did not name, extension of the Kerr-Mills Act. It was
eldercare. Yes, it is here, and in my judgment that remains the intelligent and basically
sound method to move forward in taking care of this problem of health care for the
aged.”65 Curtis did not see the drastic changes Mills had made to the AMA’s measure
when he created Title 19.
Those who seemed most excited about the Kerr-Mills expansion were the main
opponents of Medicare. But these Republicans saw the expansion of Kerr-Mills as a
preferable alternative to Medicare, not as its complement. Some, like Congressman
Herman Schneebeli of Pennsylvania, were upset because their state had previously
implemented Kerr-Mills successfully, and saw no need for Medicare. Schneebeli
complained of the Kerr-Mills expansion having already been considered, and held up in
the same way Social Security benefits were. “During the consideration of the so-called
King-Anderson bill—HR 1—in the 88th Congress, the Ways and Means Committee also
tentatively agreed upon amendments to improve and enlarge the Kerr-Mills Act. I am
!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!
64
U.S. Congress, House Committee on Ways and Means, Social Security Amendments of 1965, 89th Cong.,
1 sess., H.rpt. 213, 1965, p64.
65
U.S. Congress, Congressional Record 111 (7/27/1965): 18391.
st
79!
glad to find these amendments in the bill. I am certain the Committee would have
reported out similar amendments last year, except for the fact that the proponents of
Medicare—lacking support for their program—asked that the Committee pass over all
amendments dealing with medical care for the aged. These Kerr-Mills amendments
would be in the law today, with the full support of the Republicans, were it not for that
fact. I know that these amendments will enable my State—the Commonwealth of
Pennsylvania—to improve its already extensive Kerr-Mills program.”66 Schneebeli’s
comments show that killing the Social Security benefit increase in Conference and not
including the Kerr-Mills expansion in Ways and Means were part of a larger plan devised
by Mills and the Johnson administration. The two programs—each of which enjoyed
Republican support—would be saved for pairing with Medicare, enabling its passage,
exactly what happened in 1965. Some Republicans, like Schneebeli, were fully aware of
this strategy, and yet could do nothing but complain for the Congressional Record.
The introduction in the House under closed rule meant that the proposal could not
be fully debated. Naturally, the limited debate centered on the most contentious issue—
hospital insurance financed through a payroll tax, or Medicare Part A. Discussion of
Title 19 (Kerr-Mills expansion, later Medicaid) was brief and ill informed. Democrats
brought it up quickly, and brandished it with lukewarm praise. Having spent significant
prior effort debunking the program as an alternative to Medicare, it seemed at best to be a
welcome extra. Given Kerr-Mills’ poor track record, many Democrats did not take the
!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!
66
U.S. Congress, Congressional Record 111 (4/7/1965): 7233.
80!
program seriously.67 Certainly, this affected their perception of the form it would take in
the future.
For Republicans, it was difficult to criticize an approach they had espoused.
Having lobbied for Eldercare, they could not take issue with the Kerr-Mills expansion,
and focused their criticism on Medicare. No provision of the Kerr-Mills expansion, then,
saw even a spark of the fire Republicans brought to refute Medicare’s payroll tax. As a
result, the provision moved quietly through the House. Wilbur Mills was able to craft the
legislation skillfully, to the point that it forced some Republicans’ hands, moved from
Ways and Means with a large margin, and passed the House by landslide. True to form,
Mills had steered the bill expertly. What would be known as Medicaid was created
without the enthusiastic backing of any constituency. Rather, the Kerr-Mills expansion,
dubbed as the nondescript “Title 19,” escaped Committee and the House floor without
any real consideration or attention.
In the Senate, Medicare once again silenced any critique of Title 19. Instead of
taking the House package at face value, the Senate Finance Committee seriously
discussed many alternative approaches to the Medicare portions of the bill. The
Committee came close to passing a provision that would have overhauled the entire
scheme for hospital insurance, turning it into catastrophic insurance, proposed by Senator
Russell Long.68 Severe pressure from the White House foiled the transformative
!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!
67
Paul Starr, The Social Transformation of American Medicine (New York, NY: Basic Books, 1982);
Jonathan Engel, Poor People's Medicine: Medicaid and American Charity Since 1965 (Durham, NC: Duke
University Press, 2006).
68
The plan would have provided unlimited days in the hospital and skimped on shorter stays, whereas the
King-Anderson version of Medicare that passed the House limited hospital stays to 60 days. Senator Long
81!
amendment, though, as it was not acceptable to the AFL-CIO.69 This potential problem
captured the Committee’s entire attention, and as in the House, Title 19 was once again
barely debated.
The only discussion of the Kerr-Mills program in the Finance Committee came
from Senators questioning the AMA, and it happened before the Committee agreed to
accept the House’s combination bill. These testimonies spoke of Kerr-Mills in the
context of Eldercare, as an alternative to Medicare rather than a supplement. They show
Democrats’ unwillingness to accept the program, and general lack of faith in it. For
example, Senator Hartke worked to get former AMA President Dr. Donovan Ward on the
record acknowledging the general lack of success that Kerr-Mills had seen up to that
date:
Senator Hartke: Do you feel this Kerr-Mills approach is really providing
the type of assistance that should be given throughout the United States to
all States, to all people on a uniform basis?
Dr. Ward: It has that potential; yes, sir.
Hartke: But to all major intents and purposes, I say it is operating in just a
few States. There is no real dispute about that. You say “potentially” it can
operate in all of them, and I am not going to argue with potentialities. But
the truth is that at this moment, more than 4 years since its passage, only
three or four States are using most of the funds, the Federal funds; isn’t
that true?
Ward: It is true that a certain small number of States, five, six, or eight—
various figured have been used—have received the most cash under the
!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!
thought that the elderly who really needed help were the ones with catastrophic illnesses. Opponents of his
plan worried that the Long amendment would turn the nation’s hospitals into wards for the senile. See
Presidential Recordings from 6/26/1965 and nearby dates. For example: Telephone Conversation between
Lyndon Johnson and Mike Mansfield, 6/26/1965, Tape WH6506.08, Program No. 2, Citation No. 8197,
Johnson Tapes: Telephone Series, Presidential Recordings Program, Miller Center of Public Affairs,
University of Virginia, http://whitehousetapes.net/tapes/johnson/telephone.
69
Sheri David, With Dignity, 135-142.
82!
Kerr-Mills program.70
Hartke drilled into Ward until he would admit that Kerr-Mills had not performed the way
the AMA led the public to believe it had. While Dr. Ward spoke of the program’s
potential, Hartke brought his statements to reality, getting him to admit on record that the
program was a success in only a handful of states. Working toward the same goal,
Senator Douglas went on record criticizing his state’s Kerr-Mills program, noting its
limited coverage. “We have a little over a million persons over the age of 65, and the
number on Kerr-Mills in a given month is seldom appreciable over a thousand. So this
would be one-tenth of 1 percent,” the Senator testified.71 Aside from taking jabs at
Eldercare’s expansion of Kerr-Mills, the Senate Finance Committee did not hold
substantial debates on the programs outlined in Title 19. Instead, the Committee bickered
over the form Medicare should take. The branded provision overshadowed expansion of
the Kerr-Mills program, once again.
Finally, when the bill reached the Senate floor, much of the same debate took
place. Over the course of three days, Senators proposed a myriad of amendments to
Medicare, but little discussion outside of that program occurred. Senator Hart summed
up the proceedings nicely in his time on the floor: “Today, we are considering one of the
broadest and most complex collections of Social Security amendments ever brought
before this body. We must pass judgment on a new plan of basic hospital insurance
benefits under Social Security [Medicare Part A], a new voluntary supplemental plan of
!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!
70
U.S. Congress, Senate Finance Committee, Hearings Before the Committee on Finance on H.R. 6675,
89th Cong., 1st sess., 5/10-5/14 and 5/17-5/19/1965, p631.
71
Ibid., p852.
83!
medical insurance for the aged [Medicare Part B], major changes in the social security
benefit structure, new Federal guidelines on participation in Kerr-Mills programs [Title
19] and a general streamlining and strengthening of a myriad of programs in the areas of
child health, public assistance, and mental retardation. Each of these topics merits
extensive study and debate. However, the one clear and overriding issue before us today
is undoubtedly those portions of the bill known collectively as Medicare. I doubt
whether any of us here will ever have the opportunity to vote on a more important piece
of domestic legislation.”72 While the Social Security Amendments of 1965 were vast in
their scope, the debate zeroed in on one provision that dominated discussion. Ultimately,
the Senate considered 513 amendments to the legislation. Just 35 of the 513 amendments
proposed in the Senate related to Title 19. Of those amendments, 14 were corrections of
technical errors or changes to terminology. Only 3 of the 35 amendments were proposed
on the Senate floor, with the rest coming in Committee behind closed doors.73 On July 9,
the Senate passed the bill by a vote of 68-21, enacting the most sweeping overhaul of
healthcare in the nation’s history, having debated only half of it.74
ICING ON THE CAKE
And so Medicaid was created—as Title 19, an expansion of the existing KerrMills Act—along with Medicare, as part of the package that made up the Social Security
!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!
72
U.S. Congress, Congressional Record 111 (7/7/1965): 15812.
U.S. Congress, House-Senate Conference Committee, Brief Description of Senate Amendments to H.R.
6675, 89th Cong., 1st sess.
74
U.S. Congress, Congressional Record 111 (7/9/1965): 16157.
73
84!
Amendments of 1965. President Johnson signed the bill into law on July 30, 1965,
alongside Harry Truman in a publicity stunt only fitting for such a branded piece of
legislation as Medicare. In his remarks, Johnson hailed Medicare as a way for every
citizen, “in his productive years when he is earning, to insure himself against the ravages
of illness in his old age.”75 In detail, the President described the bill’s contents: 100 days
of both hospital care coverage and time in skilled nursing homes, funded through a
“small amount each payday…No longer will older Americans be denied the healing
miracle of modern medicine,” Johnson said.76 “No longer will illness crush and destroy
savings.” He marveled, “not simply at the passage of this bill,” but “that it took so many
years to pass it.”77
Medicaid rode its companion’s very public coattails to passage. For President
Johnson, Medicare itself was a way to bring working-class white Americans into the fold,
most importantly as a campaign issue. He was more than willing to spend on health. In
one phone conversation between the President and his press secretary, Johnson likened
spending on health benefits to sending money to his mother: “Its just like your mother
writing you and saying that she wants 20 dollars. And I’d always send mine a hundred
when she did. I never did it because I thought it was gonna’ be good for the economy, I
!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!
75
Lyndon B. Johnson, “Remarks with President Truman at the Signing in Independence of the Medicare
Bill,” July 30, 1965, Lyndon Baines Johnson Library and Museum,
http://www.lbjlib.utexas.edu/johnson/archives.hom/speeches.hom/650730.asp
76
Ibid.
77
Ibid.
85!
did it ‘cause I thought she was entitled to it.”78 For Johnson, the content of the bill was
unimportant, as long as it could be called Medicare. He saw Kerr-Mills expansion as
icing on the cake, and as a way to bring Republicans into the fold.
Title 19 was endorsed by few. Wilbur Mills was the program’s chief advocate,
having strategized with President Johnson and the Department of Health, Education, and
Welfare in 1964 about including it with Medicare. For him, the Kerr-Mills expansion
updated and improved the program bearing his name, which had essentially been an
embarrassment to date. By covering some of the poorest American’s under Title 19,
Mills also aimed to defend against later broadening of Medicare, as Wilbur Cohen later
recounted.79 At the same time, it brought Republican support through the AMA. The
organization aided the bill to pass when it shifted its position, complaining publicly that
Medicare was too limited in scope—rather than the usual, earlier rhetoric about
government largesse. Congressman Joseph Karth found this situation at least a little
amusing, saying, “Ironically, the foes of Medicare unintentionally made H.R. 6675 [the
bill that passed], as a health care bill, a far better piece of legislation. They accomplished
this by educating the public, through their well-financed publicity campaign, to the
shortcomings of the Medicare bill.”80 When Mills included a variant of the AMA’s KerrMills expansion—Eldercare—in the comprehensive package, it looked as if he were just
!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!
78
Telephone Conversation between Lyndon Johnson and Bill Moyers, 3/10/1965, Tape WH6503.05,
Program No. 2, Citation No. 7051, Johnson Tapes: Telephone Series, Presidential Recordings Program,
Miller Center of Public Affairs, University of Virginia, http://whitehousetapes.net/tapes/johnson/telephone.
79
Wilbur Cohen, "Reflections on Enactment of Medicare and Medicaid," Health Care Financing Review,
1985 Annual Supplement, 1985, p3-11.
80
U.S. Congress, Congressional Record 111 (4/8/1965): 7353.
86!
giving the organization what it wanted. The Kerr-Mills expansion the Chairman created
differed significantly from Eldercare, and had been discussed a year earlier, but he was
more than willing to accept the label that the AMA’s uncontroversial and Republicanbacked proposal contained.81 When coupled with the Social Security benefit increases
and Byrnes’ voluntary plan, Mills had crafted legislation with three out of four parts that
Republicans had proposed and could espouse, and brought Johnson the Medicare label
his landslide election had ostensibly mandated.
The Kerr-Mills expansion designed a new title under Social Security, Title 19,
creating what became known as Medicaid. The Committee Report on March 29 expected
Title 19 to provide medical assistance to about 8 million needy persons during an early
year of operation.82 It said, “States could, in the future, provide aid to as many as twice
this number who need help with the medical costs.”83 Title 19 required categorical
eligibility, and mandated equal medical services to each category of qualification—Old
Age Assistance, Aid to Families with Dependent Children (AFDC), Aid to the Blind, Aid
!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!
81
As Mills said on the floor, describing expansion to the Kerr-Mills program, “The third part of this
medical package results from the thinking in the Ways and Means Committee last year and largely consists
of the tentative decisions that were taken at that time for drafting purposes within the Committee. That has
to do with the expansions and improvement of the existing program of medical assistance for the aged. We
have made very material improvements within that program, permitting the States to continue to provide
better benefits to more needy people and permitting the Federal Government to assist the States with
respect to the financing of these benefits.” Notice that he says the bill had largely been shaped the year
before, prior to the AMA’s Eldercare. U.S. Congress, Congressional Record 111 (4/7/1965): 7209.
82
U.S. Congress, House Committee on Ways and Means, Social Security Amendments of 1965, 89th Cong.,
st
1 sess., H.rpt. 213, 1965, p70.
83
Ibid., p70.
87!
to the Permanently and Totally Disabled (APTD), and the combined adult program.84 It
also appropriated funds for the “medically needy”—those who, despite extra income, met
standards for a qualifying category above. States were responsible for setting their own
income thresholds for qualification as medically needy.85 Because states established their
own thresholds, costs of Title 19 programs had the potential to vary widely from state to
state.
Title 19 required five baseline services for all groups covered, but allowed states
to provide up to over a dozen more, including dental care, physical therapy, and
prescription drugs, and receive the Federal matching rate.86 In a sense, the provision was
limitless. As long as States were willing to put up their share of the money, which ranged
from 15% to 45%, the Federal government would match it.87 As such, state programs
could differ in comprehensiveness of both eligibility—depending on the threshold for
“medically needy”—and in services offered, depending on what the state decided to
cover.
!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!
84
These categories were Titles 1, 4, 10, 14, and 16 of the Social Security Act, respectively. By law, Title 19
programs had to provide equal benefits to each category. The “combined adult program” is the way
Congress referred to Title 16. That Title provided additional cash benefits to adults in the Old Age
Assistance Program, Aid to the Blind, and Aid to the Permanently and Totally Disabled. It was replaced by
Supplemental Security Income (SSI) in 1974, a program that essentially provides the same service as its
predecessor. Social Security Online, "SSI: History of Provisions," Social Security Administration,
http://www.ssa.gov/history/pdf/ssi.pdf.
85
For example, if a cash assistance program—one of the five categories—defined eligibility at $2,500 or
less of annual income, a state might set a $3,500 limit. Thus, those who qualified for Aid to the Blind cash
payments (or any other category) would receive health benefits under Title 19, along with the blind whose
income fell in the gap between $2,500 and $3,500—those defined as medically needy. The law also
included a “pay-down” provision. Following the same example, if a blind person with $4,000 annual
income spent $500 on medical expenses, he or she would then qualify as medically needy, having reached
the $3,500 threshold. 79 Stat. 286 1965.
86
States had to cover inpatient and outpatient hospital services, laboratory and X-ray services, skilled
nursing home services, and physician’s services. 79 Stat. 286 1965.
87
79 Stat. 286 1965.
88!
The chief Social Security actuaries estimated that Title 19 would cost $200
million in the first year.88 By some quick arithmetic, that means the Committee expected
to spend about $25 per person, per year for medical care.89 These data were “based on
expenditures for vendor medical payments from State and local funds for all programs
combined in January 1964.”90 The report noted, “If State and local expenditures were
reduced, the Federal expenditure would be correspondingly lower, while increases in
state and local expenditures would also result in increases in the Federal cost.”91 Indeed,
increases in State expenditures would result in enormous increases in Federal cost, not
long after enactment. In the next chapter, we will see just what these expenditures looked
like, and how they finally elicited public reaction to Medicaid in the public, the media
and Congress.
!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!
88
The Committee on Ways and Means report explained the $200 million calculation:“If all States took full
advantage of provisions of the proposed title 19, the additional Federal participation would amount to $238
million. However, because all States cannot be expected to act immediately to establish programs under
the new title and because of provisions in the bill which permit States to receive the additional funds only
to the extent that they increase their total expenditures, the Department of HEW estimates that additional
Federal costs in the first year of operation will not exceed $200 million. Since the new title would be in
effect only for the last 6 months of the fiscal year ending June 30, 1966, expenditures in that fiscal year are
not expected to exceed $100 million. U.S. Congress, House Committee on Ways and Means, Social
Security Amendments of 1965, 89th Cong., 1st sess., H.rpt. 213, 1965, 75.
89
$200,000,000 divided by the expected low estimate of 8 million people covered. The 8 million new
people number represented anticipated new enrollment, while the $200,000,000 was based on the previous
year’s costs.
90
Ibid.
91
Ibid.
89!
CHAPTER FOUR
THE SLEEPER
Medicaid—also referred to as Title 19—was born without reception.1 President
Johnson’s remarks at the signing of the omnibus Social Security Amendments failed to
explicitly mention the program by name, underlining the preceived limited importance of
the measure in the package. The signing ceremony was elaborate, as Johnson flew to
Missouri to pen his name alongside Harry Truman, an early advocate of expansion of
health care benefits. In his speech, Johnson praised Truman, and outlined Medicare’s
provisions. The President afforded just a single sentence to Medicaid—“It will improve a
wide range of health and medical services for Americans of all ages.”2 The celebration
was for Medicare, a program that was twenty years in the making, not Medicaid.
Johnson had promised Medicare in his campaign, publicly proclaimed it the number one
legislative priority, and delivered on that promise.
The press digested the Social Security Amendments of 1965 in much the same
way that Johnson touted them. The discussion centered on the compulsory hospital
insurance provision—that which was traditionally called “Medicare.” The second prong
of the bill, voluntary insurance coverage for physicians’ services, adapted from the
Republican John Byrnes’ proposal, likewise received attention from newspapers. Social
!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!
1
In this chapter, I will use the terms “Medicaid” and “Title 19” interchangeably, as the newspapers did.
Lyndon B. Johnson, “Remarks With President Truman at the Signing in Independence of the Medicare
Bill,” July 30, 1965, Social Security Online: Presidential Statements, Social Security Administration,
http://www.ssa.gov/history/lbjstmts.html#medicare.
2
Security benefit increases, too, were welcomed. Title 19, however, was generally absent
from the bill’s reception. The Boston Globe ran a story entitled “Medicare on LBJ Desk
After Congress Passage.”3 In it, the author listed a run-down of the legislation. “The farranging bill has three major benefits,” the column said. First, “it
provides…hospitalization and nursing home care.” The second part “offers the elderly an
opportunity to pay $3 monthly for voluntary insurance that would pay up to 80 percent of
most doctors’ bills.” Finally, the third major benefit was that the bill “increases by 7
percent benefits under already existing old age, survivors and disability insurance
programs” (Social Security).4 The article contained no mention of Title 19. A similar
piece ran in The Washington Post, declaring “Medicare legislation approved in final form
yesterday by a House-Senate conference Committee will create a two-part Federal health
insurance program.”5 Like the Boston Globe article, it described the “hospital
insurance,” “non-hospital insurance” and “Social Security benefit changes,” leaving out
the creation of Title 19.6 A week later, the same newspaper ran a feature titled, “What
Medicare Means to Taxpayers.”7 While it lamented the tax increases from Social
Security benefit liberalizations and described Medicare Parts A and B, it, too, failed to go
beyond those provisions.
!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!
3
Boston Globe (1960-1979), “Medicare on LBJ Desk After Congress Passage,” Jul 29, 1965, ProQuest
Historical Newspapers Boston Globe (1872 - 1979), pg. 18.
4
Ibid.
5
Emphasis added. Thomas J. Foley, “Medicare Bill Benefits For 20 Million Citizens,” The Washington
Post, Times Herald (1959-1973), Jul 22, 1965; ProQuest Historical Newspapers The Washington Post
(1877 - 1994), pg. G13.
6
Ibid.
7
Drew Pearson, “What Medicare Means to Taxpayers,” The Washington Post, Times Herald (1959-1973),
Jul 29, 1965, ProQuest Historical Newspapers The Washington Post (1877 - 1994), pg. C13.
91!
“A NEW CONCEPT OF MEDICAL CARE”?8
It would take Medicaid’s enactment to prod the newspapers into covering it. As
the first states readied for the January 1966 start date, newspapers began slowly to expose
the program. For example, a November 18, 1965 article in The Washington Post shed
light on the new entitlement: “The 1965 Social Security Act contained far-reaching
provisions requiring a much higher standard of health care in most states for the needy
aged. These provisions have been overshadowed by the new Social Security program in
the bill, popularly called Medicare,” the article read.9 It went on to note that many had
expected the Kerr-Mills program to “diminish when the Social Security health care
program gets under way.”10 To the contrary, columnist Joe Hall reported that the KerrMills program would “expand considerably” under Title 19, as it had “not come close to
meeting its potential” for the aged.11 While Hall spoke of Title 19 erroneously as if it
applied solely to the elderly, he at least was somewhat aware of its capacity to expand
upon the existing Kerr-Mills program, addressing instead citizens of all ages.
Several states moved quickly to enact Title 19’s benefits and take advantage of
the available Federal dollars. Six states—Hawaii, Illinois, Minnesota, North Dakota,
Oklahoma, and Pennsylvania—were ready to launch programs on January 1, the first day
!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!
8
Martin Tolchin, “Congress Considers Cuts In State's Medicaid Funds,” New York Times (1923-Current
file), Sep 2, 1966, ProQuest Historical Newspapers The New York Times (1851 - 2007), pg. 1.
9
Joe Hall, “New Program to Assure Better Care for Aged,” The Washington Post, Times Herald (19591973), Nov 18, 1965, ProQuest Historical Newspapers The Washington Post (1877 - 1994), pg. F4.
10
Ibid.
11
Ibid.
92!
possible.12 These states broadened their existing Kerr-Mills programs modestly. Illinois,
Minnesota, and North Dakota maintained about the same services and expanded coverage
of the medically needy to the categories of welfare required.13 Hawaii, Pennsylvania, and
Oklahoma expanded their scope of services moderately, covering eyeglasses and dental
care.14 These states did not alter the threshold for medically needy from its prior level
under Kerr-Mills.15 For Pennsylvania, a family of four with an annual income under
$4,000 was eligible; Illinois set its threshold at $3,600.16 These programs were a
landmark, in that they represented the first time benefits applied to those under sixty-five
but not on welfare. At the same time, they limited the comprehensiveness of both their
benefits and eligibility.
The next two states to enroll in Medicaid would not limit comprehensiveness. As
the first programs went into effect, the California Health and Welfare Agency was busy
preparing to launch the state’s own Medicaid program, dubbed Medi-Cal. The Los
Angeles Times reported on December 30, 1965 that Paul Ward, the State Health and
Welfare Agency administrator was “beginning the tough job of grappling with Title 19,
!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!
12
Robert B. Stevens and Rosemary Stevens, Welfare Medicine in America: a Case Study of Medicaid (New
Brunswick (U.S.A.): Transaction, 2003), p80-81.
13
As a reminder, these categories were AFDC, Aid to the Blind, ATPD, and the combined adult program.
Kerr-Mills already provided aid to the medically needy under Old Age Assistance, the fifth category.
14
Tax Foundation, Inc., “Medicaid: State Programs After Two Years” (New York, NY 1968),
http://www.taxfoundation.org/research/show/1821.html, p20.
This was the first study of Medicaid undertaken, according to Stevens and Stevens. “The first major
attempt to describe Medicaid was undertaken by a private institution, the New York-based Tax Foundation,
Inc., an independent research organization. Questionnaires had been sent in the fall of 1967 to private and
public agencies in the 50 states; the ensuing report was published in June 1968.”
15
Prior level meaning when Kerr-Mills applied solely to the elderly.
16
Stevens and Stevens, Welfare Medicine, p80-81.
93!
the not-so-glamorous littler sister of the big federal Medicare program.”17 Ward expected
Title 19 to “pump in millions of federal dollars to improve California’s medical programs
for poor people.”18 The administrator expected the new program to cost $570 million
annually.19 Medi-Cal was to be comprehensive in the services it provided—offering
fourteen different services, going above and beyond the five baseline benefits required by
Title 19.20 Eligibility standards, though, were similar to other Medicaid programs;
income for a family of four with dependent children could not exceed $4,000.21 Still, by
expanding medical indigence from only the elderly to include the other four welfare
categories—as required by the law—Medi-Cal brought an estimated 1.2 million new
beneficiaries under assistance.22 “Where is all the money coming from?” Los Angeles
Times writer Ray Zeman asked.23 Federal matching funds would provide an estimated
$285 million, more than the $238 million Congress had appropriated for the entire
program nationally.
New York also moved quickly to take advantage of Title 19, although not without
controversy. As a Republican Governor in an election year, Nelson Rockefeller moved
left and advocated a liberal program. In his opening remarks to the New York State
legislature in January 1966, the Governor vowed to take advantage of the opportunity for
!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!
17
Ray Zeman, “Millions to Roll In for 'Sister' of Medicare,” Los Angeles Times (1923-Current File), Dec
30, 1965, ProQuest Historical Newspapers Los Angeles Times (1881 - 1987), pA4.
18
Ibid.
19
Ibid.
20
Stevens and Stevens, Welfare Medicine, p82.
21
Tax Foundation, Inc., “Medicaid: State Programs After Two Years” (New York, NY 1968),
http://www.taxfoundation.org/research/show/1821.html, p62.
22
Stevens and Stevens, Welfare Medicine, p84.
23
Ray Zeman, “Millions to Roll In for 'Sister' of Medicare,” Los Angeles Times (1923-Current File), Dec
30, 1965, ProQuest Historical Newspapers Los Angeles Times (1881 - 1987), pA4.
94!
improved care with the new Federal program, and then went to work making Medicaid a
reality.24
While the earliest states put their programs in place, others took notice and began
to call for Medicaid legislation of their own. Massachusetts Commissioner of Public
Health Dr. Alfred Frechette lamented the missed opportunity for increased benefits and
Federal funding, saying on January 27, “I am very distressed that so little has been done
to date in Massachusetts to implement Title 19.”25 Boston Globe writer Carl Cobb wrote
in January that his state was “lagging far behind in development of plans,” missing out on
what “could mean even more Federal money every year.” That Federal money “could
pay the bills for children born with defects” or for “hospitalization of the mother in
danger of losing her baby.”26 Again, in late February, Cobb wrote that the “little known
or discussed part of medicare—Title 19—will have the most far-reaching effects on the
American public.”27 The provision, he explained, applied to “people of all ages,” and
thus had the potential to “provide more medical care for more people than the famous
provisions that apply to those over 65.”28 As New York and California were moving to
implement Medicaid, the press began to write more frequently about it, bringing to light
the program that had gotten such scant attention. For many in Massachusetts, the missed
!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!
24
Cabell Phillips, “State Moves Promptly to Obtain Wider U.S. Health Aid for Poor,” New York Times
(1923-Current file), Jan 8, 1966, ProQuest Historical Newspapers The New York Times (1851 - 2007) p17.
25
Carl Cobb, “State Seen Losing U.S. Health Funds,” Boston Globe (1960-1979), Jan 27, 1966, ProQuest
Historical Newspapers Boston Globe (1872 - 1979), p7.
26
Ibid.
27
Carl Cobb, “Unpublicized Title Looms As Medicare's Most Potent,” Boston Globe (1960-1979); Feb 24,
1966, ProQuest Historical Newspapers Boston Globe (1872 - 1979), p18.
28
Ibid.
95!
opportunity for Federal funding was reprehensible. Title 19 promised to care for the sick
and needy, and the state government was doing little to take advantage of it.
A February 7 New York Times article spoke grandly and optimistically of the
potential Title 19 showed: “Title 18 of Medicare—the section that provides medical
insurance for the aged under Social Security—had the biggest reaction when the law was
passed. But Title 19, officials say, is the opening shot of a revolution—the beginning of a
new style for the nation’s medical services and, indeed, of all public assistance.”29 The
article conveyed the sense that Title 19 could completely rework the way welfare
medicine operated. “As one New York State health official put it, ‘If you’re old enough,
Title 18 provides medical care so that you don’t wind up poor. And if you’re poor
enough, Title 19 pays for your medical care, giving you a chance to grow old.’”30 With
the combination of Medicare and a liberal Medicaid program, citizens would not have to
worry about their health care bills. Those too poor to pay would be covered under
Medicaid, and the harder-to-insure elderly would receive comprehensive care through
Medicare. The article foreshadowed what was to come in New York—a liberal
application of Title 19 that would rock the program and stir national debate not only
about Medicaid itself, but the country’s tolerance for social legislation.
!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!
29
Natalie Jaffe, “Medicare Revolution,” New York Times (1923-Current file), Feb 7, 1966, ProQuest
Historical Newspapers The New York Times (1851 - 2007), p22.
30
Ibid.
96!
“NEW YORK STATE DROPPED THE BOOM”31
In March, Governor Rockefeller came back to the state legislature with a proposal
for Medicaid in New York. Hoping to make a national March 31 deadline for retroactive
application of benefits, Rockefeller punted on the contentious issue of income limit,
leaving the decision to the program’s administrative agency.32 But state legislators and a
spokesman for elderly voters accused the Governor of dealing under a “veil of secrecy”
by failing to define one of the most controversial aspects of his plan.33 He came back a
week later and proposed a plan that set eligibility for a family of four on Aid to Families
with Dependent Children at $5,700. Not to be outdone, Democratic Speaker Anthony
Travia called for a $6,700 threshold. After trading partisan barbs—with Republicans
calling Travia a “tool” of New York Senator Robert Kennedy—the Governor and
Speaker agreed to a $6,000 eligibility level.34 The plan, seemingly resolved, went to
vote. In much the same way Title 19 flew under the radar in U.S. Congress, the New
York legislature passed the state’s Medicaid program by landslide—136 to 15 and 64 to
1—with hardly any debate. Governor Rockefeller signed it into law on April 30.35
!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!
31
Norman C. Miller, “Medicaid Mistake,” Wall Street Journal (1923 - Current file), Oct 20, 1966,
ProQuest Historical Newspapers The Wall Street Journal (1889 - 1993), p18.
32
If the plan were submitted by March 31, the Department of HEW would apply the Medicaid benefits
retroactively to January 1, saving New York millions of dollars. This point would later become
controversial. HEW officials reportedly assured Rockefeller that there was “no magic in the March date,”
and that the state would see its benefits paid out retroactively regardless of when the plan was submitted.
But, when New York reported the most liberal program in the country, HEW held out over $30 million in
funding, penalizing the state for late submission. (Stevens)
33
New York Times (1923-Current file), “State Delay Scored on a Medicare Plan,” Mar 4, 1966, ProQuest
Historical Newspapers The New York Times (1851 - 2007), p23.
34
Stevens and Stevens, Welfare Medicine, p86.
35
Ibid.
97!
Passage of Medicaid did not end debate for the New York legislature. Rather, a
fierce public debate ensued, centered on the gubernatorial race. The day Rockefeller
signed Title 19 into law, the New York Times reported that an estimated 3.5 million to 7
million New Yorkers would be eligible for the program. These figures were making
rounds, and backlash against the program was heating up. State Representatives and
Senators who had voted for the bill started to understand its implications. “Many
legislators said privately they had only become aware of the potential impact of the
Medicare plan in recent days,” the New York Times reported.36 As the vast scope of the
bill became apparent, criticism poured in. State representatives from upstate New York
were particularly incensed. Title 19 required equal benefits to all those qualified in the
state, meaning there was no room for variance in the eligibility threshold between rural
and urban New York, despite the drastic difference in cost of living. Due to differences
in the local cost of life, a family of four making $6,000 in New York City was
significantly more impoverished than the same family in Albany. Under Title 19, though,
the state had to provide the same benefits to both, putting cities like Albany in the
position of having to cover a much greater percentage of their population. For upstate,
the $6,000 limit meant an unnecessary handout at significant government cost.37
The criticism grew, and the New York state government divided over Medicaid.
A group of upstate legislators urged the Department of Health, Education and Welfare—
!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!
36
Richard L. Madden, “State Medicare is Voted to Help Pay Doctor Bills,” New York Times (1923-Current
file), Apr 30, 1966, ProQuest Historical Newspapers The New York Times (1851 - 2007), p1.
37
According to site www.wolframalpha.com, $6,000 in 1966 is equivalent to about $42,100 in 2010.
98!
the Federal agency in charge of Title 19—to bar the New York program.38 A Special to
the New York Times commented, “Rarely has social legislation of the scope and cost of
the state’s new medical care program been enacted amid such confusion or set in motion
with so little sense of direction. It is evident now that many legislators voted for the
program with virtually no understanding of its significance.”39 The political
ramifications of the growing protest led the Governor to appear in a statewide television
broadcast. The front page of the New York Times the next day detailed his defense:
“Governor Rockefeller rebutted widespread criticism of the state’s new medical aid
program yesterday, asserting that it would both expand the state’s help to the needy and
save money for New York City and other local communities.” Rockefeller argued that
by replacing state welfare expenditure with Federal dollars—as Title 19 did—the state’s
expenditures would be far less than some estimates. “Federal funds for medical aid in the
state would go up by about 300 per cent under the new program, while state and local
contributions this year would be ‘the same or less than they were last year,’” the
Governor argued.40 He pointed out that while eligibility for Medicaid was estimated at 8
million New Yorkers, actual enrollment rates for Kerr-Mills had been low, and thus he
expected about 2 million people to take advantage of the program.41 While this rationale
!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!
38
All Title 19 plans had to be approved by the Federal Department of HEW before reimbursement could
occur. Because Title 19 had unlimited eligibility levels, HEW had no authority to block New York’s plan.
The Department stalled, waiting the 90 days allowed for review.
39
John Sibley, “Medical Care Furor,” New York Times (1923-Current file), May 21, 1966, ProQuest
Historical Newspapers The New York Times (1851 - 2007), p14.
40
Paul Hofmann, “Governor Sees Big Saving Under State Medical Plan,” New York Times (1923-Current
file), May 23, 1966, ProQuest Historical Newspapers The New York Times (1851 - 2007), p1.
41
Congressional estimates expected to enroll 8 million people nationally.
99!
was logically consistent, it did not stop some Long Island county physicians from
boycotting the program, refusing to accept all non-emergency Medicaid patients.42
With the gubernatorial race heating up, Rockefeller took to the state in continual
defense of Medicaid. On a tour through conservative northern and rural counties in
August, the Governor “was greeted with headlines and hecklers criticizing the eventual
high cost of Medicaid.” Confident in his stance, Rockefeller remained “eager” to explain
his program.43 At a Press Association dinner, he insisted, “far from bankrupting the state,
Medicaid will see to it that major illness doesn’t bankrupt people,” reminding the
attendees that out of the potentially 8 million New Yorkers eligible, “at this date, about
200,000 have applied.”44 Amid the chaos, Rockefeller may have actually benefitted from
his stance. One prominent New York City labor leader explained, “For the first time in
my memory, the Republicans have honest-to-God labor support. The degree of this
support is amazing.”45 Those in the Rockefeller camp pointed to Medicaid as a chief
reason for their support. The Governor had effectively made himself a “friend of the
!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!
42
“Threats to boycott the state’s medical assistance program are being voiced among Suffolk physicians. A
number of doctors in this eastern Long Island county are reported considering plans to turn away all except
emergency patients enrolled under the program for medical indigents, unless it is amended. Two physicians
have posted notices of non-cooperation and they say that dozens of colleagues will follow suit.” Francis X.
Clines, “Health Aid Faces Doctors’ Revolt,” New York Times (1923-Current file), Jun 3, 1966, ProQuest
Historical Newspapers The New York Times (1851 - 2007), pg. 27.
43
Natalie Jaffe, “Medicaid Bill May Be Whopper,” New York Times (1923-Current file), Aug 28, 1966,
ProQuest Historical Newspapers The New York Times (1851 - 2007), p175.
44
Thomas Buckley, “Governor Ready to Debate Rivals,” New York Times (1923-Current file), Sep 10,
1966, ProQuest Historical Newspapers The New York Times (1851 - 2007), p1.
45
Damon Stetson, “Unions, Divided an the Candidates, Take to Politicking in Governor's Race,” New York
Times (1923-Current file), Oct 18, 1966, ProQuest Historical Newspapers The New York Times (1851 2007), p36.
100!
working man,” to use his own words.46 Despite the labor support and limited actual
enrollment, though, the debate over Medicaid remained heated.
“NATIONWIDE STORM LOOMS ON ‘SOCIALIZED MEDICINE’”47
New York’s internal controversy provoked widespread commentary, bringing
Title 19 to the fore of national news. The Washington Post warned that, “New York’s
legislature is brewing a new national storm over ‘socialized medicine.’”48 The author
called New York’s plan “wide open,” offering benefits to as many as 7 million of the
State’s 18 million residents. New York’s plan was “finally focusing public attention on
why the least known provisions of the Nation’s new medicare laws are potentially the
most revolutionary.”49 The uncapped nature of Federal funding allowed states to
implement sweeping medical programs, provided they could pay their share. In the case
of New York, the plan made nearly forty percent of the population eligible.50 Before
New York, scant attention had been given Title 19. As the Washington Post explained,
“This was because initial experience under Kerr-Mills was so unsatisfactory. States set
such low income limits for eligibility that the program was of little help except to aged
paupers.”51 With New York’s vast liberalization, Title 19’s expansionary potential
!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!
46
Homer Bigart, “Governor Swings Hard at O’Connor,” New York Times (1923-Current file), Oct 28,
1966, ProQuest Historical Newspapers The New York Times (1851 - 2007), p44.
47
Eve Edstrom, “Nationwide Storm Looms On 'Socialized Medicine,'” The Washington Post, Times Herald
(1959-1973), May 22, 1966, ProQuest Historical Newspapers The Washington Post (1877 - 1994), pA1.
48
Eve Edstrom, “Nationwide Storm Looms On 'Socialized Medicine,'” The Washington Post, Times Herald
(1959-1973), May 22, 1966, ProQuest Historical Newspapers The Washington Post (1877 - 1994), pA1.
49
Ibid.
50
With an estimated 7 million of 18 million residents eligible—38.8%.
51
Eve Edstrom, “Nationwide Storm Looms On 'Socialized Medicine,'” The Washington Post, Times Herald
(1959-1973), May 22, 1966, ProQuest Historical Newspapers The Washington Post (1877 - 1994), pA1.
101!
became evident, bringing controversy and attention to the program. For example, the
Chicago Tribune criticized New York for setting in motion, “the most elaborate program
of state medicare [referring actually to Medicaid] in the nation despite increasing
criticism that the legislation is going too far in the direction of socialized medicine.”52
While acceptance of aid to low-income groups seemed widespread, a liberal definition of
medically needy apparently pushed the boundaries, bordering on “socialized medicine.”
As another Chicago Tribune article saw it, “A congressional oversight shouldn’t become
a vehicle for irresponsible socializing medicine. This hazard must be corrected in
Washington, where the mistake originated.”53 Until Congress reigned in eligibility
levels, the author wrote, the law would continue to “put a premium on greed.”54 With the
increased press coverage, Title 19 (Medicaid) was finally getting the debate that had
never occurred before its passage.
As New York’s program was set to spend more than Congress had allocated for
all of Title 19, the U.S. House Ways and Means Committee began discussions behind
closed doors.55 According to The Washington Post, Wilbur Mills’ Committee was
“arguing over whether Congress really intended [the law] to be so magnanimous.”56
After several hearings, Ways and Means published its recommendations in a report titled
!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!
52
Glen Elsasser, “U.S. Picks Up Tab, Puts N.Y. Medicare Over,” Chicago Tribune (1963-Current file),
May 29, 1966, ProQuest Historical Newspapers Chicago Tribune (1849 - 1987), p5.
53
Chicago Tribune (1963-Current file), “A Premium on Greed,” Jul 16, 1966, ProQuest Historical
Newspapers Chicago Tribune (1849 - 1987), p12.
54
Ibid.
55
Chicago Tribune (1963-Current file), “N. Y. Prepares to Outspend U.S. for Medicare,” Jun 12, 1966,
ProQuest Historical Newspapers Chicago Tribune (1849 - 1987), pB15.
56
Eve Edstrom, “Title 19 Sleeper Can Mean Unlimited Care,” The Washington Post, Times Herald (19591973), Jun 29, 1966, ProQuest Historical Newspapers The Washington Post (1877 - 1994), pA7.
102!
“Limitations on Federal Participation under Title XIX of the Social Security Act.”57 The
Committee ruled that some Title 19 programs had overstretched the original intentions of
the bill. “While most of State plans raise no question at this time, a few go well beyond
what your Committee believes to have been the intent of the Congress.”58 Chiefly, the
Committee was concerned with coverage of non-elderly adults with near-average wages.
In New York, with the eligibility limit of $6,000 for a family of four through Aid to
Families with Dependent Children, Committee members worried that in such cases, Title
19 care “would supplant health insurance presently carried or presently provided under
collective bargaining agreements for individuals and families in or close to an average
income range.”59 Mills wrote, “Your Committee never intended that Federal matching
under title XIX would be made in the case of a considerable portion of the adult working
population of moderate income.”60 This “unintended” consequence was “undesirable,”
and would be curbed in the bill put forth.61 These amendments to Title 19 would end this
practice, by eliminating funding for the medically needy under Aid to Families with
!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!
57
U.S. Congress, House Committee on Ways and Means, Limitations on Federal Participation under Title
XIX of the Social Security Act, H.Rpt. 2224 to Accompany H.R. 18225, 89th Congress, 2nd Session, 1966,
p1.
58
Ibid., p1.
59
Ibid., p2.
60
Ibid., p2.
61
Another important consideration in the Committee was the effect Title 19 was having on Medicare. In the
House Report, Mills wrote, “Your Committee is also concerned that the operation of some State plans may
greatly reduce the incentives for persons aged 65 or over to participate in the supplementary medical
insurance program of title XVIII [Medicare] of the Social Security Act, which was also established by the
Social Security Amendments of 1965.” If the threshold for medically needy were defined liberally, it would
include elderly that would otherwise have purchased the voluntary portion—Part B—of Medicare for
physicians’ services. Coverage under Title 19 would make Part B unnecessary. So, the Committee was
worried that a broad eligibility for Title 19 would limit the success of Medicare Part B. Given the attention
and importance placed on Medicare, having Medicaid overshadow it would not reflect favorably on the
Congress. Limitations on Federal Participation, p2.
103!
Dependent Children (AFDC). So, adults in a family of four under AFDC in New York—
eligible at $6,000 annual income or less under the liberal Title 19—would only receive
medical benefits if they qualified for cash assistance, a much stricter guideline. The
children in the family could still receive benefits at the medically needy level, as could
the blind, the disabled, and the aged. Their caretakers, though, would be on their own, cut
out of the program entirely.62
The program cuts were not particularly sweeping. Rather, they were important
for closing off the possibility of comprehensive care, and limiting eligibility of healthy
adults. The Chief Actuary of the Social Security Administration, Robert Myers,
estimated that the measure would save about $80 million for fiscal year 1967-68. In a
statement, Myers acknowledged that the sum was “relatively small.”63 Rather than
reduce costs in the short-term, the new amendments were designed to “serve as a brake
on undue expansion of the program in the future.”64 The concern was that more states
would adopt eligibility levels like those in New York, action that would demand massive
Federal funding. “It seems quite likely,” Myers wrote, “that under ‘mature’ conditions,
with full utilization of the provisions by those eligible to do so, and with expansion of the
provisions of many of the State plans so that they become much more like the New York
plan, the Federal cost of title XIX as it now exists would be as much as $3 billion per
year (or even more).”65 Under the proposed amendment, that figure would be around
!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!
62
Limitations on Federal Participation under Title XIX of the Social Security Act, p2
Ibid., p2.
64
Ibid., p2.
65
Ibid., p2.
63
104!
“$1.5 to $2 billion per year.”66 The savings under the Committee bill were significant,
but still allowed Title 19 to grow well beyond its original estimated cost. Effectively, the
Committee was amenable to the cost overruns, so long as the money was not spent on
health benefits for “moderate income” adults.
Congress also held full debates about Medicaid, as several bills intended to curb
the program’s costs came to the floor. These proposed measures were less amenable to
Medicaid’s cost overruns, and were primarily concerned with curbing the program, and
fast. Congressman Samuel Stratton, Democrat from New York, proposed a bill that
would have immediately cut costs and capped Federal spending.67 His would have cut
eligibility in New York in half.68 Stratton aimed to keep off Title 19’s rolls anyone who
could potentially pay for their own care—only the poorest and most needy made the cut.
The Senate considered several measures to cut Medicaid. Senator Jacob Javits
proposed a plan that would overrule the requirement that all categories receive equal
benefit levels—thus allowing preference for the elderly. Additionally, it gave states the
option of imposing a deductible on health services, adding an element of cost sharing to
Title 19 aimed at stemming overuse. On the Senate floor, many supported cutting the
program. For example, Senator Leverett Saltonstall, Republican from Massachusetts,
remarked that Title 19 had “certainly proved to be the ‘sleeper’ in the bill.” He blamed
states for the overruns, noting that “experience with Kerr-Mills led to expectations that
!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!
66
Ibid., p2.
Stevens and Stevens, Welfare Medicine, p115.
68
Stratton’s measure barred any State from including more than 20 percent of its population under the
medically needy category. Ibid.
67
105!
the States would exercise reasonable restraint” in crafting their programs.69 Instead of
understanding Congressional expectations, states had taken advantage of the more liberal
matching formula, and the cost was soon to top $1 billion. Saltonstall demanded the
program to “be confined at this time to persons who either fall within the public
assistance category or are on the fringes of it.” He did not want “nonhandicapped, ablebodied individuals of moderate means” to be extended Federal dollars.70 Despite the
efforts, though, Congress was unable to agree on anything before recessing for the 1966
elections.
ALLERGIC TO WORK?
By the time Congress balked on Medicaid cuts, state budgets reflected a clearer
picture of just how expensive the program was. With over 25 states having taken
advantage of Title 19, what was supposed to be around $200 million dollars had swelled
to over $1 billion in just less than a year.71 The three most expensive state programs
alone topped $500 million in federal expenditures.72 This was in contrast to original
estimates from a Ways and Means Committee Report in March of 1965, which guessed
!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!
69
U.S. Congress, Congressional Record 112 (9/22/1966): 20267.
Ibid, p20268.
71
Eve Edstrom, “U.S. Medicaid Bill Tops Billion,” The Washington Post, Times Herald (1959-1973), Nov
17, 1966, ProQuest Historical Newspapers The Washington Post (1877 - 1994), pA16.
72
California needed an estimated $210 million, New York $217 million, and Pennsylvania had grown to
$100 million. U.S. Congress, Congressional Record 112 (8/22/1966): 20267.
70
106!
that California’s program would grow some $20 million, Massachusetts’ $16.6 million
and New York’s $46 million under Title 19.73
The backlash intensified as state and local budgets felt the strain of increased
entitlements. In December, Michigan Governor George Romney ordered an immediate
cutback on his state’s program “because of ballooning costs which could drive a big hole
in the state’s budget.”74 Blaming a lack of Federal guidelines, Romney directed the State
Department of Social Services to “withhold full implementation.”75 Michigan had
appropriated $21 million for Title 19. The program swelled to $62 million in just its first
of three phases of implementation. Governor Romney feared that continuation would
bring a deficit of $18 million.76 In New York, residents of Nassau County were faced
with “a ‘substantial’ increase in property taxes” for 1967, warned The New York Times.77
The county’s welfare budget had grown “from $39.2 million to $66.2 million, to allow
for additional benefits under the Medicaid program.”78 Massachusetts’ communities
were “seeking extra funds from reserve accounts to meet Medicaid costs for the rest of
the year,” reported the Boston Globe.79 The article warned, “Townspeople will pay more
!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!
73
U.S. Congress, House Committee on Ways and Means, Social Security Amendments of 1965, 89th Cong.,
1 sess., H.rpt. 213, 1965, 75.
74
Continuation of the program rollout would have brought the state’s 50% share of the costs to over $39
million. Chicago Tribune (1963-Current file), “Rising Costs Cut Medicaid in Michigan,” Dec 16, 1966,
ProQuest Historical Newspapers Chicago Tribune (1849 - 1987), pB4.
75
Ibid.
76
Ibid.
77
Ronald Maiorana, “Nassau is Facing Realty Tax Rise,” New York Times (1923-Current file), Sep 18,
1966, ProQuest Historical Newspapers The New York Times (1851 - 2007), p63.
78
Ibid.
79
Herbert Gordon, “Spiraling Medicaid Costs Hitting Towns,” Boston Globe (1960-1979), Sep 5, 1967,
ProQuest Historical Newspapers Boston Globe (1872 - 1979) p48.
st
107!
in state taxes.”80 California Governor Ronald Reagan “was especially critical of
Medicaid,” dismayed that his State had gone “$130 million into debt to fund the first 16
months of its [Medicaid] operations.”81 Across the country, a once optimistic outlook
toward Title 19 soured.
In his 1967 State of the Union address, President Johnson boasted about the
progress the nation had experienced. He praised the 88th and 89th Congresses for passing
“more social and economic legislation than any two single Congresses in American
history,” noting that barriers to equality had been struck down, and that Congress
“brought medical care to older people who were unable to afford it,” covering over three
and a half million Americans through Medicare in its first year.82 He urged “a total
working partnership among Federal, State, and local governments” to continue bringing
that legislation to the people, so that its full effects would be felt.83 The President even
called for creation of even more new programs, and expansion of old ones, seeking
special funds for those that were “trapped in the ghettoes of our big cities” and for the
“very young, little children” through Head Start.84
These programs, though, would apparently come at the expense of Title 19. The
New York Times reported on January 29, 1967 that the White House would propose
!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!
80
Ibid.
William Champan, “Reagan Claims Welfare System Is a 'Failure,'” The Washington Post, Times Herald
(1959-1973), Sep 20, 1967, ProQuest Historical Newspapers The Washington Post (1877 - 1994), pA6.
82
Lyndon B. Johnson, “Annual Message to the Congress on the State of the Union,” January 10, 1967,
Lyndon Baines Johnson Library and Museum,
http://www.lbjlib.utexas.edu/johnson/archives.hom/speeches.hom/670110.asp.
83
Ibid.
84
Ibid.
81
108!
legislation to cut New York State’s Medicaid program.85 Giving in to the conservative
cast of the current Congress, the Johnson administration would seek to rein in the most
ambitious programs, ostensibly in a concession for other, higher priority measures.86
It was under these conditions—rising budget complaints from the states, and
Federal belt-tightening with the expense of the Vietnam War mounting—that Congress
resumed its discussion of Title 19. Another round of Social Security benefit increases, as
requested in Johnson’s State of the Union Address, hit the legislative agenda at the same
time. In crafting targeted changes to social legislation, Congress looked to increase
benefits for those with social insurance—adjusting for the cost of living—and decrease
benefits for those receiving entitlements.87 Improvements to Social Security and
Medicare meant liberalization, while improving welfare, including Title 19, meant cuts.
According to a Wall Street Journal article, the Ways and Means Committee, “decided
that there has to be a crackdown on people who are able to work but make welfare a way
of life.”88 In addition to measures that would “throw adults off the relief rolls,” the
Committee was reportedly considering legislation that recommended states to furnish
birth-control information to welfare recipients, and to empower states to take action
!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!
85
Maurice Carroll, “Johnson Will Ask Curb on Medicaid,” New York Times (1923-Current file), Jan 29,
1967, ProQuest Historical Newspapers The New York Times (1851 - 2007), pg. 44.
86
Wall Street Journal (1923 - Current file), “House Unit Prepares Welfare Aid Changes Forcing Many
Able-Bodied Adults Off Rolls,” Jul 27, 1967, ProQuest Historical Newspapers The Wall Street Journal
(1889 - 1993), pg. 9.
87
Social insurance being Social Security and Medicare, which recipients had specifically paid into,
“insuring” themselves against the cost of sickness and loss of income in old age.
88
Wall Street Journal (1923 - Current file), “House Unit Prepares Welfare Aid Changes Forcing Many
Able-Bodied Adults Off Rolls,” Jul 27, 1967, ProQuest Historical Newspapers The Wall Street Journal
(1889 - 1993), pg. 9.
109!
requiring absent fathers to “contribute to the support of his children.”89 According to the
article, the legislation “reflects the belief of a number of panel members that the present
welfare system actually encourages women to have illegitimate children.”90 Thus,
measures to curb this alleged behavior would supposedly improve welfare legislation.91
The Committee on Ways and Means ultimately put forth an omnibus bill that
included a vast increase in Social Security benefits, along with a freeze in funding for Aid
to Families with Dependent Children, and a mandatory work provision that applied to
cash assistance programs. Reflecting the conservative tide, the Committee’s cuts to
Medicaid were much deeper than those in the bill discussed months before. Instead of
merely targeting able-bodied adults, as before, the bill capped all medically needy
categories, tying them to cash assistance levels. It defined the threshold for medically
needy as 133% of the level for cash assistance. So, if a family of four became eligible for
AFDC cash payments at $2100, they would be eligible for medical benefits up to $2800
of annual income.92 This would ensure that Title 19 only applied to the poorest
recipients, heavily curbing programs like New York’s, which offered medical benefits to
those making up to $6000.
On the Senate floor, debate over the bill followed the same attitude—social
insurance would be increased at the expense of welfare, with Medicaid falling into the
!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!
89
Ibid.
Ibid.
91
This attitude, known as the “culture of poverty” was and remains today a prominent conservative notion.
For discussion of this issue and the way it shaped conservative ideology, see Jill Quadagno, The Color of
Welfare; or Premilla Nadasen, Welfare Warriors: The Welfare Rights Movement in the United States (New
York, NY: Routledge, 2005).
92
Stevens and Stevens, Welfare Medicine, p115-117.
90
110!
latter category. Representative Gene Snyder from Kentucky detailed “abuses in the
poverty program,” listing off cases of corruption. These included:
Federal poverty hunters provided the University of Southern Illinois with
$9 million to set up and run a Job Corps camp for 2000 men. The camp
initially enrolled only 756, of which 250 dropped out in the first 60 days,
leaving two instructors for every Job Corpsman.
In St. Petersburg, Fla., a woman’s Job Corps Center was located in a
luxury hotel at a rental for 18 months of $225,000…After 1 year of
operation, OEO graduated 42 enrollees at a cost of $1,646,601, or $39,205
per graduate.
In a Mississippi Headstart program it was revealed that the poor war
people paid to the owner of a church $100 for use of a bathroom toilet,
$10 in rent for use of a garbage can, $100 to use a sink, $120 to rent a
refrigerator, $110 for use of a stove, and $92 to rent a carpet for an 8-week
period. In addition, one of the project’s officials rented a twin-engine
plane for a 200-mile flight to address a graduating class of 5- and 6-yearold Headstart pupils.93
Snyder advocated tightening the welfare rolls to limit these sorts of abuses. Senator
Harry Byrd from West Virginia felt similarly passionate about the problems welfare
created. Byrd criticized welfare recipients enrolled under AFDC. “The truth of the
matter,” Byrd informed the Senate, “is that in all too many instances, the
husband…simply does not want to bear the responsibility of maintaining the woman and
children, so he leaves them.”94 In these cases, Byrd thought that employment was
available, but that, “Many of them are allergic to work and, as the record has often
shown, have lost good jobs repeatedly because of absenteeism from work. In many
situations, fairly good jobs go begging, and there is no justification for absenting parents
!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!
93
94
U.S. Congress, Congressional Record 113 (11/21/1967): 33595.
U.S. Congress, Congressional Record 113 (11/22/1967): 33632.
111!
not making an honest effort to secure and hold down some of these jobs.”95 As a result,
Byrd thought, tighter restrictions to the program should be enacted.
At the same time, the Senate looked favorably upon an increase in Social Security
benefits. The Congress had before it a sweeping increase of over 12%. Senator
Yarborough voiced an attitude shared by many when he described the typical recipient of
Social Security benefits. “These are hard-working people who retired from a productive
and useful job, or laid down their plows, to take a well-earned rest,” he said. But, instead
of finding that rest, beneficiaries found “themselves living the bleakest sort of shoe-string
existence.” He lamented, “These old people will not enjoy Thanksgiving tomorrow—
with fine hams, a fat turkey, lots of good fruit cake and pie and all the trimmings—
thousand of men and women over 65 in my State are going to dine on corn bread, and
beans, and rice and chicken necks. These are some of the finest men and women to
inhabit the earth.”96 From multiple statements on the Senate floor, on both sides of the
isle, it was clear, then, that an increase in Social Security benefits should pass handily.
The final bill that was passed—the Social Security Amendments of 1967—made
major liberalizations to Social Security, widened Medicare benefits, modified Aid to
Families with Dependent Children, and fundamentally altered and curbed Medicaid. The
bill provided a 15% increase in Social Security benefits and instituted a minimum
monthly allowance of $70 for Social Security beneficiaries.97 It allowed for more
!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!
95
U.S. Congress, Congressional Record 113 (11/22/1967): 33632.
U.S. Congress, Congressional Record 113 (11/22/1967): 33629.
97
U.S. Congress, Senate Finance Committee, Social Security Amendments of 1967, 90th Cong., 1st sess.,
S.rpt. 744, 1967, 2.
96
112!
hospital days under Medicare, included services from podiatrists, chiropractors, and
optometrists, and made other small changes.98 To Aid to Families with Dependent
Children, the legislation created work incentive and training programs, made available
family planning services to “aid in reduction of births out of wedlock,” and created
“protective payments to an interested person to assure that the child rather than an
incompetent or irresponsible parent of relative receives the benefit of assistance."99
Finally, the bill ended the comprehensiveness of Medicaid along two lines. First, it tied
the definition of medically needy to cash assistance levels, as in the Ways and Means bill.
Those with income greater than 133% of cash assistance eligibility would no longer
receive aid. This measure was said to be primarily aimed at curbing New York’s state
program, but its effects would be felt beyond that state. Wilbur Cohen testified that the
Medicaid changes would affect 14 of the 35 states with programs.100 This provision
eliminated the comprehensive coverage allowed in the original 1965 version of the law.
Second, the legislation capped the number of services offered by states. Where the
original legislation had required five baseline services, and allowed for more than a dozen
total, the 1967 amendments instructed states to choose seven of fourteen services total,
effectively capping the comprehensiveness of medical benefits permissible.101
In the heat of the New York debate on Medicaid, a September New York Times
article had commented on Congress’ intentions: “When Congress used the words ‘needy’
!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!
98
Ibid., p3.
Ibid, p4.
100
Stevens and Stevens, Welfare Medicine, p119.
101
Stevens and Stevens, Welfare Medicine, p120-121.
99
113!
and ‘indigent,’ Congress assumed an income of $3,000 to $4,000 [annually].”102 The
article quoted a Dr. Felderman, President of the Association of New York State
Physicians and Dentists, who asserted, “There’s got to be a cutoff point, unless this
country is ready for a new concept of medical care.’”103 By enacting the Social Security
Amendments of 1967, Congress agreed with Dr. Felderman, that the country was not
ready for the new concept of medical care he discussed. At the same time, though, the
1965 creation of Medicaid had put forward a new concept of medical care, albeit one
different from the one New York State had envisioned. With the quiet passage of Title
19, medically needy Americans under the age of 65 received health care that they
desperately required. Title 19 had originally called for just $200 million in Federal
funding. In allowing its continuation, although under stricter guidelines, Congress
approved of this new concept, one that would cost an estimated $1.7 billion dollars in
fiscal 1968 a number that would continue to grow rapidly.104
Medicaid allowed for limitless benefits. Congress enacted it without ever
weighing its potential cost growth, or even a basic understanding of its provisions. The
conservative tide embodied in the 1967 Amendments, then, could strip the potential
comprehensiveness of Medicaid. However, as the Wall Street Journal so dejectedly
!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!
102
Martin Tolchin, “Congress Considers Cuts In State's Medicaid Funds,” New York Times (1923-Current
file), Sep 2, 1966, ProQuest Historical Newspapers The New York Times (1851 - 2007), p1.
103
Ibid.
104
Tax Foundation, Medicaid: State Programs After Two Years, p31.
114!
pointed out, Congress could not totally “violate the immutable political law that what is
given must never be taken away.”105
!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!
105
Norman C. Miller, “Medicaid Mistake,” Wall Street Journal (1923 - Current file), Oct 20, 1966,
ProQuest Historical Newspapers The Wall Street Journal (1889 - 1993), p18.
115!
CONCLUSION:
THE IMMUTABLE POLITICAL LAW
Medicaid was born in obscurity, and grew into budgetary crisis within a year of
enactment. A measure that virtually no one endorsed—save the AMA, which had
espoused it only to prevent passage of Medicare—has become the primary source of
medical care for poor Americans, and one of the most important domestic programs ever
enacted. This thesis has sought to investigate how and why Medicaid came to be, by
examining the principle actors involved in the legislative process and the public and
private debate they created. It has shown a number of factors that contributed to the
inclusion of Title 19 in the Social Security Amendments of 1965. Many of these factors
are directly related to Medicare—this is natural and essential, for without Medicare, there
would have been no Medicaid. In the campaign rhetoric of 1964 and in previous years,
the elderly were prioritized over the poor—only once their needs had been met would
Congress have even considered a medical care program for another constituency.
After the post-war transformation of medicine, the profound growth in medical
technology, and the subsequent need for health insurance, the Federal government
identified a significant and growing problem among the elderly—the financial burden of
health care costs. President Harry Truman first pushed for a state-based solution to a lack
of adequate medical care, a torch that several Congressmen took up. In his bid for the
presidency and during his tenure in the Oval Office, John F. Kennedy emphasized the
need for medical care for the aged. The American Medical Association met this
proposition with vigorous resistance, and a prominent national dialogue ensued.
Lyndon Johnson reinvigorated his predecessor’s push for Medicare, primarily as a
way to win over voters in 1964. Medicare had become a popular legislative initiative,
and Johnson seized the opportunity to gain an edge in his bid for the presidency. Given
Congressman Wilbur Mills’ opposition to Medicare and position of power, the President
showed a willingness to accept any medical care for the aged he could call “Medicare.”
By making the program a central focus of his campaign, Johnson’s landslide victory over
Barry Goldwater thus seemed to be a mandate for Medicare in 1965.
Wilbur Mills saw Congress and his Committee on Ways and Means reshaped to
reflect the influx of Democrats and realized that “the time had come to pass it.”1 Once
committed to Medicare, Mills had the time and flexibility to shape the legislation as he
saw fit. He had always supported broadening his own Kerr-Mills program in concert
with Medicare, having expressed this desire to Larry O’Brien and President Johnson in
1964. Mills was also careful to build wide support for any measure his committee
endorsed. Thus, when the AMA supported an expansion of the Kerr-Mills Act in place
of Medicare in 1965, touting it as a more comprehensive measure, Mills saw an
opportunity to bring the Republicans who had endorsed it into the fold.2 Additionally,
offering medical services to the neediest groups of poor Americans served as the added
!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!
1
Transcript, Wilbur Mills Oral History Interview II, 3/25/87, by Michael L. Gillette, Internet Copy, LBJ
Library, p3.
2
Certainly, the AMA and Republicans were even more dismayed to see Medicare and their own proposals.
117!
bonus of restricting the expansion of Medicare itself. By taking care of the most
demanding and vulnerable citizens, Mills’ Medicaid program would remove incentive to
broaden Medicare later on. This, the Chairman thought, would protect the fiscal integrity
of the Social Security system and keep Medicare from ballooning in cost.
Once the omnibus measure left Ways and Means, Mills and the Johnson
administration rushed it through Congress. With help from labor, the bill moved through
the Rules Committee—usually a hang-up for controversial legislation—in just a day and
a half. On the House floor, all the publicity surrounding Medicare monopolized debate,
which was limited to ten hours by Mills’ gag rule. Republicans accurately complained
that the debate was really a “farce” and that Congress was “no longer a study and a
deliberative body.”3 The opposition was correct in its assessment that no one really
understood what the bill contained, but even Republicans did not understand just how
little everyone knew. Their opposition was aimed at the more controversial Medicare,
allowing Medicaid to enter the package unchecked. Ultimately, as one Republican put it,
“Just because there is a popular label on this bill it will be passed,” and the Social
Security Amendments of 1965 became law.4
When states began implementing Title 19/Medicaid programs, Congress awoke to
the “sleeper” they had created. Medicaid’s budget swelled to ten times its projection in
the first year. With Medicaid predicted to continue in astronomical growth, Congress
pared the measure back in the Social Security Amendments of 1967, eliminating any
!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!
3
4
U.S. Congress, Congressional Record 111 (4/7/1965): 7229.
Ibid., p7229.
118!
able-bodied adults from its rolls. This coincided with a conservative tide and reflected
American attitudes toward welfare more generally—at the same time Medicaid was cut,
Congress expanded upon Medicare, a program that endowed earned rights rather than
charitable handouts. But while Congress trimmed Medicaid to only the neediest
Americans, it could not undo the program’s creation. Wilbur Mills had sought to contain
costs by including Medicaid, and perhaps, to some degree, he did. In doing so, though,
he helped to create a foundational platform that would only grow with time.
119!
BIBLIOGRAPHY
PRIMARY SOURCES
CONGRESSIONAL DOCUMENTS
Social Security Amendments of 1965. Pub. Law No. 89-97, 79 Stat. 286 (1965).
U.S. Congress. Congressional Record. 88th Congress, 2nd Session, Vol. 110—90th
Congress, 1st Session, Vol. 113.
U.S. Congress. House, Committee on Ways and Means. Social Security Amendments of
1964. 88th Cong., 2nd sess., H.rpt. 1548, 1965.
U.S. Congress. House, Committee on Ways and Means. Social Security Amendments of
1965. 89th Cong., 1st sess., H.rpt. 213, 1965.
U.S. Congress. House, Committee on Ways and Means. Limitations on Federal
Participation under Title XIX of the Social Security Act, H.Rpt. 2224 to
Accompany H.R. 18225, 89th Congress, 2nd Session, 1966.
U.S. Congress. Senate, Finance Committee. Hearings Before the Committee on Finance
on H.R. 6675. 89th Cong., 1st sess., 1965.
PRESIDENTIAL RECORDINGS (ARRANGED CHRONOLOGICALLY)
Telephone Conversation between Lyndon Johnson and Wilbur Cohen, 3/21/1964. Tape
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Telephone Conversation between Lyndon Johnson and Larry O’Brien, 5/18/1964. Tape
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Telephone Conversation between Lyndon Johnson, Wilbur Mills and Larry O’Brien,
6/11/1964. Tape WH6406.06, Program No. 2, Citation No. 3686. Johnson Tapes:
Telephone Series. Presidential Recordings Program, Miller Center of Public
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Telephone Conversation between Lyndon Johnson and Larry O’Brien, 6/11/1964. Tape
WH6406.06, Program No. 2, Citation No. 3686. Johnson Tapes: Telephone
Series. Presidential Recordings Program, Miller Center of Public Affairs,
University of Virginia. http://whitehousetapes.net/tapes/johnson/telephone.
Telephone Conversation between Lyndon Johnson and Larry O’Brien, 6/22/1964. Tape
WH6406.12, Program No. 7, Citation No. 3804. Johnson Tapes: Telephone
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Telephone Conversation between Lyndon Johnson and George Smathers, 8/4/1964. Tape
WH6408.05, Program No. 11, Citation No. 4677. Johnson Tapes: Telephone
Series. Presidential Recordings Program, Miller Center of Public Affairs,
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Telephone Conversation between Lyndon Johnson and George Larry O’Brien, 8/14/1964.
Tape WH6408.19, Program No. 14, Citation No. 4921. Johnson Tapes: Telephone
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Telephone Conversation between Lyndon Johnson and Carl Hayden, 9/2/1964. Tape
WH6409.01, Program No. 19, Citation No. 5419. Johnson Tapes: Telephone
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121!
Telephone Conversation between Lyndon Johnson and Larry O’Brien, 9/3/1964. Tape
WH6409.04, Program No. 15, Citation No. 5467. Johnson Tapes: Telephone
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University of Virginia. http://whitehousetapes.net/tapes/johnson/telephone.
Telephone Conversation between Lyndon Johnson, Carl Albert and John McCormack,
9/3/1964. Tape WH6409.03, Program No. 1, Citation No. 5445. Johnson Tapes:
Telephone Series. Presidential Recordings Program, Miller Center of Public
Affairs, University of Virginia.
http://whitehousetapes.net/tapes/johnson/telephone.
Telephone Conversation between Lyndon Johnson and Carl Albert, 9/3/1964. Tape
WH6409.05, Program No. 2, Citation No. 5470. Johnson Tapes: Telephone
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University of Virginia. http://whitehousetapes.net/tapes/johnson/telephone.
Telephone Conversation between Lyndon Johnson and Clinton Anderson, 9/24/1964.
Tape WH6409.15, Program No. 12, Citation No. 5688. Johnson Tapes: Telephone
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University of Virginia. http://whitehousetapes.net/tapes/johnson/telephone.
Telephone Conversation between Lyndon Johnson and Clinton Anderson, 9/24/1964.
Tape WH6409.15, Program No. 12, Citation No. 5688. Johnson Tapes: Telephone
Series. Presidential Recordings Program, Miller Center of Public Affairs,
University of Virginia. http://whitehousetapes.net/tapes/johnson/telephone.
Telephone Conversation between Lyndon Johnson and Albert Gore, Sr., 10/2/1964. Tape
WH6410.01, Program No. 4, Citation No. 5804. Johnson Tapes: Telephone
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Telephone Conversation between Lyndon Johnson and Bill Moyers, 3/10/1965. Tape
WH6503.05, Program No. 2, Citation No. 7051. Johnson Tapes: Telephone
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122!
Telephone Conversation between Lyndon Johnson, John McCormack, Wilbur Mills,
Wilbur Cohen and Carl Albert, 3/23/1965. Tape WH6503.11, Program No. 9,
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Telephone Conversation between Lyndon Johnson and George Meany, 3/29/1965. Tape
WH6503.14, Program No. 11, Citation No. 7178. Johnson Tapes: Telephone
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