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Most Significant Events of the Twentienth Century: Part II

Updated on August 25, 2010
The Social Security System could be the first casualty of health care "reform"
The Social Security System could be the first casualty of health care "reform"
President Johnson signing Medicare and Medicaid into law
President Johnson signing Medicare and Medicaid into law
Medicare/Medicaid emblom, the unofficial symbol of universal health care
Medicare/Medicaid emblom, the unofficial symbol of universal health care

The 1960s--Medicare and Medicaid and the Beginnings of Health Care "Reform"

Many people think of the health care reform debate as fairly new. Few would conceive of discussions of finding ways to control the costs of health care going back over a century, and yet they have. In the first decade of the 20th Century, the American Medical Association, whose history reached back 50 years and which had been incorporated in 1897, began organizing the medical profession, increasing its membership to encompass half the nation's doctors within 10 years. By the second decade, the hospitals had become modern scientific institutions, performing surgeries and using medications widely. On the other hand, as these improvements brought inevitably higher costs, the U.S. was found to be behind the rest of the world in insuring against this inflation. In the 1910s, the American Association for Labor Legislation led the first nationwide conference on what was called "social insurance." Insurance reform began to be added to the Progressive agenda, but opposition from doctors, as well as the U.S. entry into the war in Europe, slowed down the movement considerably.

Complacency brought on by economic prosperity led to a lack of focus on health insurance in the 1920s, although the pinch to middle class pocketbooks brought on by rising medical costs influenced what reform movements existed then. The Depression in the '30s brought a greater emphasis on insurance for the unemployed and benefits for the elderly; the latter concern, of course, was addressed by the passage of the Social Security Act in 1935. Meanwhile, the Blue Cross insurance association, founded in 1929 to provide hospital benefits to teachers, began extending private coverage nationwide. Still, out of all the quasi-socialist programs put in place by the Roosevelt Administration, the government did not step into the effort to impose a universal health insurance system onto the public until Harry Truman became President. His proposal was attacked by the American Medical Association, as well as anti-Communist Congressmen, and went nowhere, and no legislation was proposed in the '50s; the government, however, did begin to make medical care for the poor population a priority, and private companies had been offering medical insurance to employees ever since World War II.

Legislation passed in 1960 was a forerunner for a bigger federal role in health care. The Kerr-Mills Act gave matching funds to states that paid for medical care for needed financial help; the program was voluntary, however, and of course, some states did not participate. Four years later, in February of 1964, President Lyndon Johnson used a special address to Congress to call for a new program to insure the elderly population; this became a key part of his almost $1 billion "war of poverty," announced in March.

The problem of how to pay for the health insurance aspect of this at the time massive outlay of federal funds was solved the following year, with the passage of Titles XVIII and XIX of the Social Security Act, which made the Social Security System effectually responsible for the maintenance of two separate insurance progams–Medicare (Title XVIII) for the elderly, and Medicaid (Title XIX, essentially an expansion of Kerr-Mills) for the poor. The Social Security fund had been tapped before, but for the first time, it was being made to bear the permanent burden of a major program paid for entirely by the federal government–a development that has had devastating, probably fatal, effects on what is probably the proudest achievement of the advocates of liberalized social policy. In effect, Medicare and Medicaid can properly be called the most extensive acts of embezzlement in American history, committed under the cover of the law. While the total effect of these two programs is highly complicated and hard to measure, their role in bringing Social Security to the brink of bankruptcy is fairly clear.

On the other hand, while the evidence is mixed, Medicare and Medicaid may be among the few examples of expanded government that that have produced beneficial results. They represent the clear culmination of the campaign among social liberals for universal health care, even if they don't realize it now, which is what makes them important. They are not only popular programs, but recent polls have indicated support for broadening their coverage. One would hope that the necessary reforms to the programs would have played a significant role in the continuing health care debate of the last few decades, but this has not been the case, as will be explored later.


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