HCR History, Chapter 3: The Great Medicare Debate

by Karoli on March 17, 2010 · 3 comments

A look down the timeline of social legislation is mind-boggling. Unemployment insurance, disability insurance, and retirement benefits were all in place and yet, access to health care for all Americans remains the elusive prize, even today. No matter how many years pass, arguments for universal health care are the same, as are arguments against. Here are two excerpts, both from opposite sides of the timeline.

September 9, 2009

Our collective failure to meet this challenge – year after year, decade after decade – has led us to a breaking point. Everyone understands the extraordinary hardships that are placed on the uninsured, who live every day just one accident or illness away from bankruptcy. These are not primarily people on welfare. These are middle-class Americans. Some can’t get insurance on the job. Others are self-employed, and can’t afford it, since buying insurance on your own costs you three times as much as the coverage you get from your employer. Many other Americans who are willing and able to pay are still denied insurance due to previous illnesses or conditions that insurance companies decide are too risky or expensive to cover.

President Barack Obama, to a joint session of Congress

April 25, 1928

For some time the statement has been made that only two groups of persons can afford to be ill, the wealthy and the very poor. The former are able to pay for what they get and the latter get a rather good type of service without charge.

The group that gives the greatest concern to students of the situation is the middle class. This group has been the victim of exploitation since the earliest times. It exists in one-room kitchenettes in the cities and must perforce go to the hospital in times of sickness. In the country and in the villages it is far removed from the available hospitals and pays mileage charges in addition to medical fees for medical attention. Because of its transient character it has fallen out of touch with the old-time family physician.

Morris Fishbein, “Socialized Medicine” April 25, 1928 to the American Medical Association

By 1928, most European countries had established some form of national health care, whether a state-based single payer system or a hybrid insurance private-public partnership. In the US, Theodore Roosevelt’s 1912 Progressive Party platform included this plank:

The protection of home life against the hazards of sickness, irregular employment and old age through the adoption of a system of social insurance adapted to American use;

Specific reforms embraced by the Progressive Party included:

We favor the union of all the existing agencies of the Federal Government dealing with the public health into a single national health service without discrimination against or for any one set of therapeutic methods, school of medicine, or school of healing with such additional powers as may be necessary to enable it to perform efficiently such duties in the protection of the public from preventable diseases as may be properly undertaken by the Federal authorities, including the executing of existing laws regarding pure food, quarantine and cognate subjects, the promotion of vital statistics and the extension of the registration area of such statistics, and co-operation with the health activities of the various States and cities of the Nation.

Despite the best efforts of subsequent Presidents, Congress would not cede ground on the health care issue. In 1960, federal unemployment insurance, disability insurance, and a federal pension were all in place, but health care was the sacred cow upon which Republican opponents staked their claim.

Indeed, Fishbein’s article quoted above builds the American Medical Association’s case for why socialized medicine should be avoided at all costs. After ticking off a litany of reasons why there should not be any government baseline for health care, Fishbein goes on to argue against private insurance as a way to spread the risk and costs to provide care, but he saves the deepest scorn for Great Britain’s system.

Any doctor can get on the list of those working under the act and there are in England, Scotland and Wales some 35,000 so registered. Of these fewer than 15,000 are actually doing national insurance work. About 1,000 physicians, constituting an active minority, refuse to have anything to do with the whole scheme. The number of persons insured under the act is approximately 15,000,000, so that the average number of insured persons in the care of one doctor is about 1,000.

His argument isn’t so much about the patients’ access, though as much as it is the quality of the doctors contracted to provide care. There is, in this essay, a lofty air of arrogance and elitism running through it, a tone carried through the debate in later years as well. Even though the AMA standard-bearer changed, the message was the same: We know best.

Let’s move farther down the timeline.

1943-1950: The Wagner-Murray-Dingell bill

Social Security has passed, as has unemployment insurance. Congress is bickering over disability insurance but health care is still overlooked. World War II rages on, Congress has granted some veterans’ health benefits to returning soldiers, and the debate heats up. Unions and other fraternal organizations line up behind it; the AMA organized against it. Despite Roosevelt’s past efforts to secure health care for all Americans, his reception to the actual bill proposed by the House was lukewarm, owing possibly to the ongoing war effort. He did, however, warm up to it in 1944, promising to take it up with Congress.

The bill died in committee in 1944; Roosevelt died in office in 1945. Despite Truman’s efforts to include it, and despite overwhelming public support for it (75% in favor in 1942; 59% in favor in 1943) it went nowhere.

The analysis on the Social Security site of why such a popular measure died is instructive:

The answer is that highly controversial legislation must be treated as a special case. No system of representative government can truly be equitable–nor can it survive in the long run–unless it takes into account the intensity with which opinions are held. Although the principle of majority rule is deeply ingrained in the Nation’s political tradition, Americans are equally committed to the principle that the majority must not tyrannize the minority, or deprive the minority of basic rights. As columnist Tom Wicker noted recently in The New York Times: “One of the features of the American political system, in fact, has been the restraints it exercises on ‘pure’ democracy–or what some call mob democracy. Allowing each state two senators, regardless of size and population, and interposing the electoral college between voters and candidates are only two examples.” (3)

Characteristically, our political system responds rather quickly in situations where a strong popular and interest-group consensus exists. Conversely, when there is a serious split among major interest groups, politicians tend to proceed cautiously.

The author goes on to attribute the failure of the Wagner-Murray-Dingell bill, debated over the following 5 years, to deeply divided and competing interests. He notes the following benchmarks:

  • Senator Robert A. Taft of Ohio introduced a counterproposal appropriating $200 million to states to provide private health insurance for the poor. Truman would not agree to it, arguing that it would delay a program for all, and was a $200 million subsidy to the insurance industry. That angered Republicans, who united against any further effort to extend medical benefits to the elderly.
  • The 1946 midterm elections centered around criticism of the New Deal programs, with the Republicans accusing Democrats of driving the country into debt.
  • The AMA dug in hard, organized, and campaigned against it. They teamed up with the US Chamber of Commerce, trial lawyers, and more than 1800 other organizations.

By 1950, it was clear there was no national will to extend health insurance to all citizens. The country was distracted by the McCarthy witchhunts and the Korean war. Ultimately, the final nail in the coffin was this:

In a throwback to the early 1900′s, health insurance became entangled with patriotic issues and was pictured as un-American and “revolutionary” by the time the election campaign had begun, many candidates were shying away from taking a position on it. In political parlance, it was becoming a “pariah issue.”

And this, in a long, convoluted way with attention to the Great Disability Debate outlined in Chapter 2, brings us to 1960.

1960 – 1965 Medicare for the elderly

Despite support from the AFL-CIO and other labor players, despite voter support, it was apparent by 1960 that universal health care for all was a political non-starter. However, there was a rising movement and support for providing health care to the elderly. The American Hospital Association was looking to Congress to help them with the costs of indigent elderly patients, and unions gave the final shove to introduce a bill expanding Social Security benefits to include hospital and medical benefits for the elderly.

The AMA, however, remained adamant about any health coverage tied to a government program. Allying with the newly-formed Health Insurance Association of America, the US Chamber of Commerce and the Pharmaceutical Manufacturers’ Association, they launched a pre-emptive PR campaign against any expansion of Social Security to include health benefits.

The environment seemed right: Congress had passed a program allowing for direct payments to providers for welfare recipients, including elderly welfare recipients. After considering some incremental measures for the poverty-stricken and indigent, HR 4700 was introduced by Rep. Forand of Rhode Island. It would provide insurance against hospital, nursing homes and surgical services for OASDI recipients.

A milder bill (HR 12580) was also introduced by Republicans, which allowed for state-administered benefits for elderly patients who met a means test. Both measures failed in the House Ways and Means committee, and were never sent to the full House of Representatives.

The Senate passed Social Security amendments in 1964 which included hospital insurance provisions. The corresponding House bill did not have anything similar. In the conference committee, the Senate conferees voted 4 to 3 to include the hospital provisions; the House conferees rejected them on a 3 to 2 vote. The conference committee adjourned without sending a Conference report for approval.

After the 1964 elections, President Lyndon Johnson decided to take up the question of Medicare again as his first priority. The House began considering HR 1 on January 27, 1965, one week after Johnson’s inauguration. A shift in the makeup of the House to a strong Democratic majority gave them the votes in the Ways and Means committee to report out HR 6675 by a vote of 17 Democrats in favor, 8 Republicans against.

On the House floor, Republicans argued for a voluntary health plan with a floor funded similar to Medicaid (which would have placed most of the cost and control on individual states). During the debate, HR 7057 was introduced which provided for a voluntary system paid partly by the government and partly by the individual. Republicans fought to send HR 6675 back to the Ways and Means committee and substitute their version instead. That effort failed, and HR 6675 passed the House by a vote of 313 (65 – R, 248- D) to 115 (73 – R, 248 – D).

Meanwhile, in the Senate, major provisions of the House bill survived and it was sent to the Senate floor.

5 years after the effort began, and 37 years after the national debate began, the Senate passed HR 6675 by a bipartisan vote of 68 to 21.

Medicare became the law of the land on July 30, 1965.

Next installment: Lessons learned from historical context

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