Let's Look At Medicare and Medicaid: Introduction, Background, and History

By Max Sano

On July 30th, 1965, President Lyndon B. Johnson signed Medicare and Medicaid into law. Medicare is a government assistance program that provides healthcare insurance to the poor, while Medicaid serves the same purpose but for those over the age of 65. These programs are examples of big government at its finest, providing access to affordable healthcare to those in need of it.

Lyndon B. Johnson signing Medicare into law on July 30, 1965

Lyndon B. Johnson signing Medicare into law on July 30, 1965

The inception of these healthcare initiatives can be traced back to the 1930s when President Franklin D. Roosevelt enacted the New Deal, a series of public works programs, financial reforms (including Social Security), and business regulations in response to the Great Depression of 1929. Roosevelt did not incorporate healthcare coverage into his Social Security plan out of fear that Congress would reject that aspect of the program, which in turn would jeopardize the other New Deal programs he hoped to pass.

His successors experienced similar congressional rejections on this matter through the Truman and Kennedy administrations whenever either president showed support for related programs. If there were any bills drafted, conservative Democrats and Republicans alike blocked any vote on the matter. One of the most outspoken opposers of Medicare on Capital Hill in the 1950s and 1960s was Rep. Wilbur Mills (D-AR). As chairman of the House Committee on Ways and Means—the chief tax-writing committee in Congress, which could approve funding for national government programs—Mills blocked John F. Kennedy’s plans for a federal healthcare initiative to be realized. Kennedy described the reality for many aging Americans across the nation:

For every city and town, every hospital and clinic, every neighborhood and rest home in America – wherever our older citizens live out their lives in want and despair under the shadow of illness.

It was not until after the election of 1964, when President Johnson was elected to office over conservative maverick and Republican nominee Barry Goldwater, that such a plan could be enacted into law. 1964 was a time of political upheaval, which was represented in the results of the election. Goldwater lost to Johnson in a landslide—61 percent to 39 percent—and his fellow Democrats surged to overwhelming majorities in Congress, winning 295 seats in the 435-member House and 68 in the 100-member Senate. Chairman Mills acknowledged the political shift and began working alongside Democrats to get Medicare up for a vote.

Logo for the government body that oversees Medicare and Medicaid programs

Logo for the government body that oversees Medicare and Medicaid programs

The Medicare program, as signed by LBJ,  included Part A—Hospital Insurance—and Part B—Medical Insurance. Today these two parts are called “Original Medicare”. Over the years, Congress has made numerous alterations to the program. This contains a 1972 expansion which allows more people to be eligible for healthcare coverage, including the disabled, people with end-stage renal disease (ESRD) requiring dialysis or kidney transplant, and people 65 or older who select Medicare coverage. At first, Medicaid gave medical insurance to people getting cash assistance. Today, a much larger group of Americans is covered, which includes low-income families, pregnant women, people of all ages with disabilities, and people who need long-term care.

Continued expansions to Medicare show why so many more Americans have access to healthcare today. The Medicare Prescription Drug Improvement and Modernization Act of 2003 (MMA) made the biggest changes to the program in 38 years.  Under the MMA, private health plans approved by Medicare became known as Medicare Advantage Plans. These plans are sometimes called Part C, or "MA Plans.” This is an example of conservative political theory implemented in healthcare policy—the utilization of Medicare funds with certain private plans to provide care for the most people possible. Alternatively, the MMA also expanded Medicare to include an optional prescription drug benefit, known as Part D, which went into effect in 2006. The inclusion of a pharmaceutical component into government-sponsored healthcare expands the government’s role in healthcare coverage. This is important to understand because it shows that conservative and progressive components have been added to the gov program throughout its existence.

It is important to note that Medicare and Medicaid expansions are bipartisan in practice. Part C was enacted when Republicans controlled both chambers of Congress, while Part D was passed when Democrats held an equivalent level of political control. The Center for Medicare and Medicaid has is clearly a legitimate and powerful force for providing healthcare coverage to millions of Americans, and will continue to be if the Trump administration allows it. The Center’s efforts to provide medical advice and services to the American people is truly testament to its own mission statement: “We’re putting patients first.”


Suggested Reading