How Medicare Was Made

Fifty years ago, Congress created Medicare and Medicaid and remade American health care. The number of elderly citizens lacking access to hospitals and doctors plummeted. Hospitals, physicians, and state and local governments came to depend on this federal funding. We have a tendency to forget the history of laws that extended the obligations and commitments of the federal government. But the passage of Medicare and Medicaid, which shattered the barriers that had separated the federal government and the health-care system, was no less contentious than the recent debates about the Affordable Care Act.

When Medicare was first proposed, in the late nineteen-fifties, national health insurance had been a losing cause for decades. In the thirties, Franklin Delano Roosevelt had chosen not to add health care to his Social Security proposal because he believed that it would be too controversial, and would damage the prospects of other programs. Whereas most Western democracies had adopted some form of national health-care program, the United States relied on a private system that revolved, as the sociologist Paul Starr has recounted, around a sacred understanding of the doctor-patient relationship. When liberals talked about giving the government a bigger role in health care, stakeholders in the existing system always fought back, protecting their authority and autonomy by warning that Washington would sever the ties between doctors and their patients. It was one thing to distribute old-age pensions but quite another to allow the government to intrude into intimate medical affairs. When one senator suggested in 1937 that President Franklin Delano Roosevelt was prepared to expand the government’s role in medicine if doctors did not do more to help the needy, Time magazine asked in its June cover story, “Nationalized Doctors?”

When President Harry Truman proposed national health insurance for every American in 1945, and again in 1949, as part of his effort to move forward with domestic policies that had been left out of the New Deal, he and allied liberals came to see why F.D.R. had avoided the issue of health care back in the nineteen-thirties. The American Medical Association conducted the most expensive lobbying effort to that date in opposition to Truman’s health-care plan, which it branded as “un-American” and “socialized medicine.” Charging that the Truman Administration consisted of “followers of the Moscow party line,” the A.M.A. worked closely with the conservative coalition in Congress to kill the measure in committee. By 1950, the proposal was dead.

Meanwhile, during the forties and fifties, the government solidified the private health-care system through corporate tax breaks that subsidized companies offering their workers insurance. More workers were brought into the private system through this indirect and hidden form of government assistance, creating even greater resistance to the idea of the federal government directly providing insurance.

Still, many Democrats remained convinced that the health-care system left too many Americans without access to affordable care. In 1957, Congressman Aime Forand, an ardent New Deal liberal who had quit school after seventh grade to take care of his ailing father, came up with the idea of a smaller and more targeted program as a first step toward national health insurance. With Congressman Cecil King, a California Democrat, Forand proposed covering some of the medical costs of the growing number of Americans over the age of sixty-five. The problem of elderly Americans who lacked health care was acute, according to the Department of Health, Education, and Welfare. Older Americans required more than twice as much hospital care as people under the age of sixty-five. Even with Social Security benefits, most could not afford the cost of hospitalization, which was rising rapidly during these years as a result of medical advances. Forand and King made the tactical decision to propose that the program fall under the Social Security Administration. Liberals would be able to argue that they were simply expanding the popular program and paying for the new benefits through the Social Security payroll tax. ...