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Reflections on the enactment of Medicare and Medicaid

Reflections on the enactment of Medicare and Medicaid

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Abstract

Since 1980, Wilbur J. Cohen is a professor at the Lyndon B. Johnson School of Public Affairs at The University of Texas at Austin. He was Chairman of the Task Force on Health and Social Security under President John F. Kennedy (1960-61). He was the first person to hold all three of these positions, and served as the Assistant Secretary, Under Secretary, and Secretary of the Department of Health, Education, and Welfare between 1961 and 1968. He was one of the main architects of Medicare, Medicaid, and was responsible for bringing the legislation through Congress and its implementation. He was the Chairman of President John F. Kennedy’s Task Force on Health and Social Security (1960-61). He was the only person to hold all three of these positions between 1961 and 1968. He was one the main architects of Medicare and Medicaid. He had primary responsibility for guiding the legislation through Congress and its first implementation.

Introduction

My current comments must be viewed in historical context. I spent 15 years (1950-1965) designing the basic framework and piloting through Congress1 Medicare and Medicaid. Another 3 1/2 years (1965-1968) were spent helping to make the first decisions regarding the administration and implementation of the programs. As you can see, I have a deep personal concern and even an emotional concern for these programs. I spent so much time and energy on them, as did many of my associates.

Many younger people don't realize the severity of many of the arguments and criticisms against these health plans. For example, Scripps-Howard published a headline titled "AMA Sees Wilbur Cochran as 'Enemy No.1" on June 20, 1966. One. "At the 1966 American Medical Association House of Delegates resolutions were presented by doctors from Florida and Louisiana asking President Johnson to investigate Mr. Cohen. This was followed by a quick booting out of office. Twenty years later, I don't know of any substantial or responsible group or individual that supports the complete repeal of these controversial programs. There are many proposals to restrict, remodel, or expand them.

Medicare and Medicaid were controversial for 9 years (1957-1965). It is important to remember the basic ethos of the 1950s and 1960s, when many of these fundamental decisions were made, in order to understand the legislative provisions that were included into these programs. It was difficult to get experience with large-scale, national health reimbursement programs. There was much rhetoric, but very little evidence. There was a lot of rhetoric and very little research. These facts played a major role in the final results.

Implementation

Since 1942, when the first Federal nationwide hospital insurance bill was introduced in Congress (Brewster 1958 and 1962), the hospital portion of Medicare has been subject to staff discussion in some way or another. The various versions of such legislation have helped to identify administrative and policy issues and to determine the best ways to address them. In the 1960's, the disability insurance provisions were enacted. This greatly assisted staff in developing relationships with doctors and hospitals, as well as in establishing policies and forms for medical certification. Arthur Hess was given responsibility for the disability laws and he became the first head of the Medicare program. Hess was able to win the support of hospitals and physicians for the program.

Participatory role of the Health Insurance Benefits Advisory Council was a key factor in the acceptance by physicians and other providers of policies, forms and regulations for the Medicare program. Representatives of the American Medical Association and American Hospital Association had a statutory forum to exchange ideas and communicate with program administrators. This institution was crucial in 1965-1970. To ensure that there was sufficient representation from ex-law critics and supporters, I personally chose the members of the Council.

Additionally, I kept my promise to the House Committee on Ways and Means in executive session that private commercial insurance carriers would be given equal consideration as non-profit organizations as fiscal intermediaries for supplementary health insurance. It took some convincing and handholding from the carriers, who initially didn't believe that the government would do this. In a special meeting, I assured the private commercial insurers of this policy. Robert Ball and I chose the first private commercial insurance carriers in each state and territory, as well as other fiscal agents, to ensure an equitable and fair division.

The cooperation of hospitals, doctors, nurses, carriers and intermediaries was essential for the successful implementation of Medicare. 1965-67's primary goal was to get off on a positive note, and to avoid any slowdown or strike.

One of the features I added to the legislation was the July 1st 1966 effective date. The incidence of respiratory diseases is low in summer and elective surgery is at a low level just before the July 4th holiday. Every day of the 11 months it took to prepare for the law's implementation was necessary. The law was able to be initiated during a summer with low admission. This made it more successful.

Evolution of Medicaid

In 1942, Rhode Island sought to use some of its existing public assistance funds from the Social Security Act to pay direct payments to medical care vendors. This was the beginning of the pressure to create a Medicaid-type program. However, the Social Security Board ruled that such a payment was not allowed by law. The Social Security Board staff made proposals to amend Title I, IV and X to allow such "vendor payments."

In 1949, the Board recommended that a new title to the law be added. This would allow for authorization for medical assistance. Congress, 1949

Based on the State per capita income the Federal share was $6 per month for an average number of needy adults, and $3 per monthly for children who receive payments under the State plan. (U.S. Congress 1949).

The House Committee on Ways and Means did not approve the Board's proposal. It was too broad. It seemed that no provision for medical aid to the needy would be included in this bill. I asked Elizabeth Wickenden (a long-time friend in New York City), to remind Representative Walter Lynch, D., New York, about including the concept of an "average" in public assistance's financial reimbursement provisions. With the help of Representative Lynch, I was able develop this amendment. It was approved by the Committee and the Congress, and included in the 1950 Social Security Amendments (Public Law 734) In a very small way, this was the beginning of the Federal role in financing the medical care for the poor. Further improvements were made in 1966 when the $6-3 pooled plan of 1949, which was a means of financing medical aid for the severely disabled, was included in the Social Security Amendments of 56.

Flemming, urged President Eisenhower, to support a Medicare-type plan that was funded through the social security system. Although the President initially supported it, he later withdrew his support due to concerns that it was "socialized medication". In 1960, Secretary Flemming submitted a replacement proposal to Congress. It was based on an income threshold for aged individuals of $2,500 and for couples of aged persons of $3,800. This proposal would be funded from general revenues.

Under Chairman Mills, the House Committee on Ways and Means developed an alternative proposal. Senator Kerr asked me to look at the bill and make any necessary changes within a matter of days when it was brought to the Senate in the summer 1960. My suggestions were accepted by the Senate Finance Committee, Senate and Conference Committee without any discussion. These changes became known as the Kerr-Mills Bill.

I was appointed Chairman of Kennedy's Task Force shortly thereafter and, subsequently, Assistant Secretary for Legislation by HEW. From 1960 to 1965, I held the belief that both Medicare-type Medicaid-type programs were needed and desirable. They were not in conflict. This view was readily accepted by Mr. Mills. My long-time friend Senator Paul Douglas (D. Illinois) and Senator Albert Gore, (D. Tennessee) were the only strong Medicare supporters I was able convince to accept this view.

Senator Pat McNamara (D. Michigan), my state senator, was the leading opponent. Senator McNamara, along with his staff, were harsh critics of my views. Senator McNamara opposed any income test and any deductible in Medicare. He also criticized my views and official positions on a number of issues, including the Older Americans Act and Elementary and Secondary Education Act. During a 1964 flight to Ann Arbor, President Johnson was making his Great Society speech at the University of Michigan, he slammed any "means-tested" approach. Because my son Christopher was graduating, I went along with him. On Air Force One, the President was accompanied by the Michigan congressional delegation. G. Mennen Williams, former Governor of Michigan, was on board, as well as Representative Martha Griffiths (D. Michigan), who was a member the House Committee on Ways and Means. However, the President never gave me any instructions on how to deal with Senator McNamara. None of the passengers on the plane supported my position. Without the support of Chairman Mills, the inclusion of Medicaid into the 1965 law wouldn't have been possible.

Since 1965, many people have called Medicaid the "sleeper" of the legislation. The bill's 124-146 pages were part of a 296-page legislation piece. It was also discussed on pages 63-75 of the 264-page Committee Report, which is under the heading "Improvement and Extension of Kerr-Mills Program". Most people didn't pay much attention to this section. Although Title XIX wasn't secret, the shocking bewilderment at Part B's adoption meant that neither the media nor the health policy community paid much attention to it. The victory of Medicare was a joy for the proponents; it demoralized the opponents. The Senate amendments and compromises of the Conference Committee became the focus of those who were concerned about the legislation. It was only later that the full scope of the Medicaid legislation was realized. 1965 saw a small group of health policy professionals concerned about Medicare's controversial aspects and not aware of the potential benefits of Medicaid. I had the idea for Medicaid as far back as 1942. I waited until the right moment when someone would ask me to make it a law. That was 1965.

Summary

Looking back at the 45 years that I spent working on health policy issues, programs and policies (1940-1985), and especially the Medicare-Medicaid period (1950-1968), I see 1965's Medicare and Medicaid legislation as part of a long-term process. It is a continuation of the past, a creation in an era of time, and an incremental evolution for future. There have been many improvements, setbacks and changes that had an uncertain impact on the future. In the 20 years since 1965, we have learned a lot.

I don't see 1965 legislation as good or bad, right and wrong, or as an expanded or limited role for the Federal Government. In 1965, the Federal Government intervened in a way that was both necessary and desirable. This was not the only type of intervention that could have been made. The roles of the Federal government and the State governments in the areas of health and medical care economics could have been different if the States had acted during the period 1912-60. Individual States could not seize the opportunity due to the high costs of employers in the States that enacted laws earlier than others. The current situation could have been different if the private insurance industry had supported the specific proposals that both Republicans and Democrats made during 1945-60. They didn't. They waited. They waited. They argued for delay. They were running out of time.

Medicare and Medicaid today are part of a national safety net. Many factors will determine their future role. However, I'm happy to have been a part of bringing these programs to life and challenging the health delivery sector to improve for future and present generations. We will create a better program based on the foundations of Medicare and Medicaid.

 

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