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Friday, April 10, 2015

COVERED: House Passes Massive Expansion of Health Care Coverage

Bob Rosenblatt, Special Correspondent

 

Throughout 2015, the Academy is working with partners to create a platform for dialogue around the history and future of these two vital programs, including this weekly Covered blog series. Covered is written by Bob Rosenblatt, a Senior Fellow at the National Academy of Social Insurance and editor of the website HelpWithAging. Learn more about the Academy’s celebration of the 50th anniversary of Medicare and Medicaid.


House Passes Massive Expansion of Health Care Coverage

April 10, 1965

By Bob Rosenblatt, Special Correspondent

Washington, D.C. – The House voted this week to approve an unprecedented expansion of the federal government’s role in health care through a new system of hospital and medical insurance for Americans aged 65 and over. A complex legislative proposal combining private and public programs would bring health insurance to 20 million older Americans.

The bill also included an expansion of health insurance to an estimated eight million people now enrolled in or potentially eligible for state-run welfare programs.

The bill was approved on April 8th by a vote of 313-115 with 248 Democrats and 115 Republicans favoring the proposal.  The 115 Republicans voted in favor of the Democratic proposal after the Republican alternative failed along party lines. On final  passage, the votes against were cast by 73 Republicans and 42 Democrats – showing deep internal divisions in the two parties that may be important during Senate consideration as well as during the debate over other Administration proposals on issues ranging from civil rights to aid for education.

“This is a landmark day in the historic evolution of our Social Security system,” President Johnson said at a news conference after the House vote.  “The overwhelming vote of support in the House of Representatives for the Social Security Amendments of 1965 demonstrates once again the vitality of our democratic system in responding to the needs and will of the people.”

The coverage of hospital bills for people over 65 would be a new benefit under the Social Security system, financed by a new tax on workers and their employers.

For supporters, the House vote was a long-awaited and unlikely victory, something that liberals have been pressing for without success since the New Deal presidency of Franklin Roosevelt. The landslide election of 1964 gave Democrats a huge majority in the House and Senate, bringing in large numbers of liberal Democrats committed to passing a health care bill for older Americans, something the Administration has dubbed “Medicare.”

The bill passed by the House on April 8th was essentially the creation of House Ways and Means chairman Wilbur Mills (D-AR), a conservative long opposed to new government programs. In fact, he prevented a House-Senate conference from agreeing on a bill in 1964 that was limited to providing  hospital coverage to older Americans. After the landslide election, Mills did an about-face, deciding that passage of the legislation was inevitable and that he would be better positioned to shape an ambitious program if he were supporting the measure. He spoke often and confidentially with President Johnson as the two men adopted an aggressive legislative strategy.

The result was the bill passed this week, which would create a complex system of delivering care to a much broader population than originally anticipated by this Administration:

  • Hospital coverage for people 65 years of age and older would be delivered as a new benefit under the Social Security system, with financing from an expanded Social Security tax on workers making up to $6,000 a year and their employers. The yearly benefits would include up to 60-days of hospital care during a period of illness, 120-days of nursing home care, and 100-days of home care visits.
  • Care from doctors for the over-65 population would be delivered under a voluntary private insurance program, with individuals paying $3 a month in premiums, and federal tax revenues paying $3 a month.  Individuals would pay an annual deductible of $50, and then 20 percent of the bills charged by their doctors for office visits, or surgeries and other treatments in the hospital.
  • Indigent people under 65 years old, including a large number of children and mothers, would get help with their medical bills through a new program, financed jointly by the states and the federal government.

This last element of the measure that passed the House would be a huge expansion of the existing Kerr-Mills program in which help with medical bill for indigent people over 65 is now paid for by the states with some federal financing; only 400,000 individuals are covered by that program, even though many more are in need of assistance. The new program would be run by states’ welfare departments  and would cover families receiving Aid to Families with Dependent Children as well as people with disabilities.

States would get infusions of cash from the federal government, which in some cases would pay as much as 80% of the total costs.  In return, the federal government would set the rules on minimal coverage that must be provided. The reform of this state-based approach to medical care for the indigent should provide  health care coverage to as many as eight million. But the exact number can’t be determined until states agree to participate and set their income eligibility standards and other rules for coverage.

The supplementary health plan for paying doctor bills for the elderly was originally a Republican idea and Mills, chairman of the powerful Ways & Means Committee, surprised colleagues of both parties one day in closed committee hearings when he decided to combine it with the Johnson’s Administration’s limited play for hospital coverage. To increase political support, he then packed in the proposal to increase coverage for poor, which was originally an idea proposed by the American Medical Association. In effect, Mills created a legislative “layer cake” as some on Capitol Hill have called it, combining three separate proposals.

The Republican layer – the proposal to limit coverage to voluntary private insurance for doctor bills – was offered as a stand-alone bill in the House and rejected on April 8th.  The vote was 191 in favor and 236 opposed. Voting for the bill were 128 Republicans and 63 Democrats. Voting against were 10 Republicans and 226 Democrats.

The Mills bill is now moving to the Senate, with Democrats confident of passage.  But it is not yet clear what changes and amendments may be sought during the coming days of debate. Doctors remain deeply suspicious of what the government may do in regulating their fees.

► Directory of COVERED posts
► Learn more about the Academy's celebration of the 50th anniversary of the enactment of Medicare and Medicaid
► See the next post in the COVERED series, "White House Tries to Ease Docs' Fears of Medicare"

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