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.
Senate Passes Medicare, Prepares for Conference with House over Disputes
By Bob Rosenblatt, Special Correspondent
July 10, 1965
Washington, DC – The Senate yesterday approved legislation that would provide health insurance for hospital and doctor bills for 20 million Americans over the age of 65. The Senate’s action constitutes a major win for President Lyndon Johnson and would be the largest expansion of social insurance since the creation of Social Security’s retirement system almost 30 years ago.
The Senate action moves forward the Medicare bill, a unique combination of government and private approaches to health care: the hospital coverage will come through a new part of Social Security, while doctor bills will be paid through a voluntary insurance program, with individuals and government sharing in the premiums.
The Senate approval came on a vote of 68 to 21.The big margin of victory echoed the vote in April, when the House passed the measure, 313 to 115. In the Senate, the bill was supported by 55 Democrats and 13 Republicans; voting against were 7 Democrats and 14 Republicans.
The Senate and House now head for a conference to work out differences in the two bills, including important details of coverage for an estimated 20 million seniors and provider payments.
The Senate bill, like the legislation approved in the House, is built around the concept of social insurance. All people over 65 will have hospital, nursing home and home care covered. The care will be paid for by money collected from current workers and their employers as part of the Social Security system. The Senate rejected amendments in committee and on the floor that would have linked the size of a worker’s contribution to his or her income. Those amendments would have required the poorest people to pay nothing; payments would increase as an individual’s income increases. The income-related financing would have Medicare more closely resemble a welfare-type approach.
There are significant issues to be resolved when the House and Senate conference committee begins work next week.
- Hospital Coverage. The House provides 60-days of hospital care during a spell of illness after payment of a $40 deductible. The Senate bill was amended on the floor to provide for unlimited days in the hospital, with a co-payment of $10 per day after 60-days. The amendment, by Sen. Vance Hartke (D-IN), was intended to provide relief to seniors with serious illness who may be facing a protracted hospital stay. The Senate also voted to lower the age at which a worker can get Social Security benefits to 60, down from the current initial eligibility age of 62. Both of these amendments would significantly drive up the costs of the two programs.
- Nursing Home Coverage: The House bill provides 20-days of care, with two additional days for each unused hospital day, up to a maximum of 100-days. The Senate bill provides 100-days, with a $5 co-payment for each day over 20-days. Both bills limit coverage to patients who have been in a hospital at least three days.
- Home Health Care Coverage: The House allows 100-days of home health care visits after a three-day hospital stay. The Senate does not require a prior hospital stay, but covers visits up to 175-days. Home health care involves a licensed health care worker, such as a nurse, who may administer medications, change dressings or provide physical therapy.
Both the Senate and House agree that Medicare should have a relatively hands-off approach when it comes to doctors’ bills. Care in a doctor’s office will be covered by Part B of the program, which will be voluntary and will, to a far greater extent than Part A, rely on private insurance. The coverage will cost $6 a month, with $3 paid by the individual and $3 by the federal government. The federal government will spend about $600 million a year from general tax revenues to pay for its share of the premiums.
But the House and Senate differ on the amount of the costs that will be borne by patients. Under the Senate’s approach, enrollees in Part B would pay an annual deductible of $50 and be responsible for 20 percent of any additional charges by the doctor. Private plans would pay for the other 80 percent. Under the House approach, deductibles and copayments for care provided by doctors would be determined completely by private plans. The House bill reflects the concerns of many doctors over government involvement in rate setting and the regulation of billing practices.
The Johnson Administration and the hospitals won an important fight over coverage of specialists. The Senate bill would continue the current practice of including the charges of radiologists, anesthesiologists, and pathologists in the bills hospitals sent to patients. Such charges would be covered under Part A, rather than Part B, which focuses on care in a physician’s office. This issue will come up during the conference because the House and Senate approaches are different.
Both the House and Senate favor different limits on coverage for people over the age of 65 who are in psychiatric hospitals. The House version of the bill has 60-days of hospital care a year, with a lifetime limit of 180-days. This would be included in the voluntary private insurance program. The Senate wants it covered as part of hospital insurance under the new part of the Social Security system, Medicare Part A with a lifetime limit of 190-days.
There are still important coverage disagreements to be worked out that will have fiscal ramifications for the government and affordability considerations for many seniors. But, Medicare appears to be on a path to becoming law after having won passage in the House and Senate with big majorities and significant support from Republicans. The last-minute bargaining should be intense if Congress is to complete work on the bill before its traditional summer recess.
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► Read the Next post in the COVERED series, "Nursing Home Admission Rule Stirs Discontent in Medicare Debate"
► Learn more about the Academy's celebration of the 50th anniversary of the enactment of Medicare and Medicaid