On April 11, Johnson signed the Elementary and Secondary Education Act at a schoolhouse next to the Pedernales River in Stonewall, Texas, where he had once been a student. One of his former teachers, Kate Deadrich Loney, sat beside the president as he signed the legislation, and so did some of the Mexican American students he had taught in Cotulla, Texas. “By passing this bill,” Johnson said, “we bridge the gap between helplessness and hope for more than 5 million educationally deprived children.”
THE TRIUMPH OF MEDICARE
On January 4, 1965, the same day Johnson called on Congress to pass a health-care bill for the elderly in his State of the Union address, the House Democrat Cecil King of California and the Senate Democrat Clinton Anderson of New Mexico, whose longtime advocacy of government health care had stemmed from his brush with tuberculosis in his early twenties, introduced a Medicare bill that would cover sixty days of hospital care, sixty days of posthospital care, 240 home health-care visits, and outpatient X-rays and other hospital diagnostic services. The benefits would be paid for by an increase in the Social Security tax, from 3.6 percent to 4.25 percent in 1966–1967 and up to 5 percent in 1968–1970. According to the best estimates, the program would cost a little over $2 billion in the first full year of operation. The Social Security Administration would administer the program.
When this legislation was introduced in Congress, the battle for federal health insurance had been ongoing for more than fifteen years. In fact, the Medicare legislation of 1965 was the latest in a series of bills that had been introduced and tabled in one way or another throughout the period, while the battle raged from the grass roots to the halls of Congress over the very idea of government involvement in health care.
At the start of his second term in 1949, President Truman called for a national health insurance plan for all Americans. Under his proposal, the federal government would offer health insurance for medical, dental, and hospital costs to every American. Although Truman’s proposal did not address the question of how the program would be funded, the bill’s supporters said they would use a payroll tax on employers and employees just like Social Security. Truman’s proposal was attacked by the American Medical Association (AMA), the professional association of physicians; by the insurance industry; and by congressional conservatives who blasted it as “socialized medicine.” The AMA spent a reported $1,225,208 lobbying against the bill in the first nine months of 1949, the highest amount spent until that time by any interest group on lobbying in a single year. The opponents of national health care warned that the provision of health insurance would be the first step in a gradual federal government takeover of the entire health industry and the establishment of a system like the National Health Service, which had just gotten under way in the United Kingdom in 1948. Although Truman’s proposal was far from government-controlled health care, opponents used exaggerated rhetoric to conjure up the worst fears that Americans had in the cold war era. They warned that a national health-care system would destroy the integrity of the doctor-patient relationship that had been so central in American health care since the late nineteenth century.46 Under a system of “socialized medicine,” the doctors and insurers said, the federal government, not doctors, would make decisions about patient care. For many years after the success of the AMA’s lobbying campaign, most liberals shied away from proposing any legislation to provide federal health insurance for all Americans.
In 1957, however, a group of congressional Democrats decided to push for a much narrower plan that would provide insurance to cover the costs of hospital visits only for older Americans through Social Security. The plan had first been discussed at the end of the Truman administration, when it became clear that health insurance for people of all ages stood no chance of passage. The AFL-CIO took the lead in putting the plan together, and the Social Security Administration provided assistance, though the Eisenhower administration never endorsed the plan. Many health-care experts commended the proposal, even though it was much more limited than Truman’s proposal.
Most data confirmed that a huge portion of the elderly population in the United States lacked access to health insurance to cover the cost of hospital stays, doctor visits, and prescription drugs. “I am eighty years old and for 10 years I have been living on a bare nothing,” one retired schoolteacher explained to Congress. “Two meals a day, one egg, a soup, because I want to be independent . . . I worked so hard that I have pernicious anemia, $9.95 for a little bottle of liquid for shots, wholesale, I couldn’t pay for it.”47 The burden for their care often fell on their families, welfare programs, and charitable organizations. Otherwise, they simply survived as long as they could without any care at all. The situation worsened as health-care costs for the elderly escalated as a result of the advent of antibiotics, revolutionary surgical procedures to alleviate heart disease, and other medical breakthroughs. Doctors were devoting much more of their time to elderly patients.48 Hospitals expanded in size as the population of elderly people grew, and there were more ways to treat their illnesses. There were also good political reasons for Democrats to support government health insurance for the elderly despite Truman’s experience. The elderly were seen by a large majority of Americans as a “deserving” group who were not being well served by private insurance. By placing benefits for the elderly under Social Security and paying for them with the Social Security tax, the sponsors of the bill hoped to capitalize on the popularity of the existing program.
The sponsors believed that the way they had packaged their proposal, along with the support of organized labor, would soften the opposition. They were wrong. The more limited Medicare proposal came under the same attacks as had President Truman’s proposal for national health insurance for all Americans. The AMA resuscitated the charge of “socialized medicine” and conducted a fierce lobbying campaign in Washington and congressional districts to demonize the bill.
Organized labor was a driving force in the campaign for Medicare in the late 1950s, primarily through the National Council of Senior Citizens, an organization with more than 500,000 active members that was a creation of the AFL-CIO. In the 1950s, a small cohort of labor leaders had taken an interest in the health-care problems of the elderly, and in 1960 they formed a small group called the Senior Citizens for Kennedy that persuaded the future president to pay attention to the issue. Nelson Cruikshank, a former Methodist minister who had worked for the Farm Security Administration and the War Manpower Commission and had served as director of the AFL-CIO’s Department of Social Security, was one of the major players. The Democratic National Committee and the AFL-CIO worked with this group to launch the National Council of Senior Citizens in July 1961, with the help of Walter Reuther and the UAW. The first president was Aime Forand, the original congressional sponsor of Medicare in 1957. The executive director of the organization was the former director of public relations for the AFL-CIO. The National Council of Senior Citizens lobbied members of Congress, convened rallies, spread its message in the media, and ran letter-writing campaigns.
In early 1962, President Kennedy called on Congress to pass Medicare legislation that would provide hospital insurance to the elderly. In 1961 and 1962, AMPAC—the political arm of the AMA—“educated” voters by sending speakers and pamphlets about the dangers of Medicare to approximately fifty key congressional districts. The AMA sent posters and pamphlets to doctors to be displayed in their waiting rooms; the topic “socialized medicine and you” was addressed in terms of the dangers patients faced from Medicare, primarily the inevitable restrictions on their freedom to choose their own doctors.49 In Operation Coffee Cup, the AMA’s women’s auxiliary—the wives of doctors—gathered groups of women in their homes to discuss the perils in the bill. The coffee klatches were advertised as informal events, but they were carefully orchestrated, and the hosts had very specific instructions about what to say. Women who attended were taught how to write to legislators and generate petition drives against the legislation
. The women who ran this operation liked to play a record that featured Ronald Reagan, a former Hollywood actor and spokesman for GE, attacking the proposal. “One of the traditional methods of imposing statism or socialism on a people,” Reagan said, “has been by way of medicine.”50 Admiral Ben Moreell, one of the founders of the Americans for Constitutional Action, warned, “We should now be aware that we are threatened by total state socialism, an ancient tyranny under modern disguise.”51
Fiscal conservatives in Congress also went after the bill by raising concerns—stemming from the connection of Medicare to Social Security—that the cost of health-care benefits under Medicare would force the government to raise Social Security taxes on workers and employees to intolerable levels (then considered to be anything above 10 percent). The chief opponent in the House in 1962 and 1963 was Wilbur Mills, the fiscally conservative chairman of the Ways and Means Committee, which had jurisdiction over both Social Security and the Medicare bill. Mills had been holding up the bill since it was first proposed in 1957. In 1960, he had tried to take some of the steam out of Medicare when he and the Oklahoma senator Robert Kerr proposed Medical Assistance for the Aged (known as the Kerr-Mills Act), which provided means-tested assistance to elderly Americans who had too much money to receive welfare but too little to purchase any kind of health insurance. The benefits were funded by states and the federal government and administered by the states. The Kerr-Mills Act was limited, and a number of states didn’t even adopt the program, so demands for Medicare continued despite its passage.
Ways and Means debated Kennedy’s Medicare proposal, but it never left the committee. Mills had reported to the White House that he didn’t have the votes necessary to pass Medicare in his committee, nor did the bill have the support of a majority of the House. President Kennedy’s legislative team, though it pushed for Medicare, agreed with Mills in his assessment of the dimensions of the support they could expect for the bill.52 Mills’s primary objection to the bill was the risk Medicare posed to Social Security, though he subscribed to some of the arguments of the AMA, perhaps motivated by threats from the organization that it might make trouble for him in his normally safe district in Arkansas. Based on all the polling data, Mills anticipated that older people would be disappointed when they discovered that the administration’s program covered only hospital bills. He predicted they would insist that Congress expand the health-care benefits to include doctors’ costs, which would require increases in Social Security taxes. When he assumed the presidency, Johnson had pleaded with Mills to change his position and had his staff rework the proposal to satisfy some of Mills’s budgetary concerns, but still the chairman wouldn’t budge.
Despite the opposition, the pressure for reform kept mounting. With average hospital costs rising from $29 a day in 1960 to $40 a day in 1964, health insurance providers were continually raising their premiums. These companies charged the highest rates to the elderly because they were considered “bad risks.” Only about one in four elderly people had adequate hospital insurance. The American Hospital Association, whose members were overburdened with caring for the elderly, indicated that it supported some kind of federal insurance. Approximately two-thirds of the electorate supported Medicare by 1964.53
In the spring of 1964, the AMA heard that the conservative Ways and Means Democrat John Watts from Kentucky, who had been one of the main opponents of Medicare on the committee, unexpectedly started telling colleagues that he might be willing to support a compromise version of the legislation. AMA representatives mobilized to make it clear that they would respond with a show of force in his home state if Watts switched from a no to a yes on the legislation. The association sent word to local government and business officials in the state that it might formally endorse the surgeon general’s 1964 landmark report that smoking caused cancer—a report that would certainly deal a crippling blow to the economy of Watts’s tobacco-producing district. This was enough to make Watts reconsider. Once the congressman announced that he could not vote for the Medicare legislation under any circumstances, the AMA informed Kentucky’s local leaders it was backing off its threat.54 In 1964, when the Senate added a version of Medicare as an amendment to Social Security legislation that the House had passed, Mills killed the amendment in conference committee.
The election of 1964 changed the situation in Congress. The National Council of Senior Citizens boasted that the election had been a “magnificent mandate” for Medicare. While exaggerated rhetoric was commonplace after elections, in this case the argument happened to be true. The Democratic caucus in the House finally reflected national opinion on the issue. Approximately thirty-seven legislators who had been considered “friends” of the AMA were defeated.55 Many Republicans felt that Goldwater’s opposition to the proposal had been one of the biggest factors in their poor showing in the election. “Social Security and medical care were primary issues in 1964,” the Ohio Republican Frank Bow acknowledged, “and the Republican response on these issues was a major factor in the disaster that befell us.”56 There had been a sizable expansion in the number of members who wanted to vote for Medicare. Somewhere between forty-two and forty-four new members of the House were Medicare supporters, and they all were prepared to fight for it. The Ways and Means Committee now had a majority in favor of the bill, which meant that Wilbur Mills could no longer prevent his committee from voting on a bill. If Mills managed to change the minds of his members, a strong majority in the House would probably be willing to force the bill out of his committee anyway, and out of Rules too. Mills, according to Larry O’Brien, had mellowed in his opposition to Medicare; he “wasn’t going to take on a crusade that was doomed to failure.”57
On January 5, 1965, the day after the president’s State of the Union address, Mills announced to the administration that his committee’s first order of business would be Medicare. He had already given a speech in Little Rock in which he announced his support for Medicare—though he didn’t specify his support for every detail of the proposed legislation—but the biggest threat to Medicare was no longer Wilbur Mills. It was the Republicans who would siphon off votes from the administration’s proposal to build coalitions behind their own plans. No longer were any Republicans arguing against the federal government’s providing help for the elderly. Now the Republicans had legislation they claimed would do a better job than what the administration was proposing. Republicans were hoping they could persuade Democrats on the Ways and Means Committee and in the House to compromise on a bill that would have greater bipartisan support—and would give the federal government less power over the health-care industry than the administration’s proposal did. Muting some of its rhetoric about socialized medicine, the AMA focused on pursuing the cheapest alternative. On January 27, two Ways and Means opponents to the White House measure, the Missouri Republican Thomas Curtis and Sydney Herlong, a Florida Democrat, sponsored a proposal written by AMA staffers and informally called Eldercare, which offered voluntary medical insurance to the elderly on the basis of need; it was an expanded version of Medical Assistance for the Aged (Kerr-Mills). States would have to choose to participate in the program, and each would have the power to set its own rules, at an estimated total cost of up to $2.1 billion per year to the federal government. People over sixty-five who qualified could purchase Blue Cross and Blue Shield or commercial insurance and receive subsidies depending on their income. The states, drawing on federal and state general revenues, would supplement the government funds with contributions from the participants. This plan gained little traction in Congress, even among Republicans.
Other Republicans decided to offer a bolder plan. On February 4, the ranking Republican on Ways and Means, John Byrnes of Wisconsin, introduced his own plan, nicknamed Bettercare. The claim here was that the plan differed fundamentally from the administration’s proposal, in that it offered more generous benefits to the elderly, particularly the coverage of physicians’ costs, that it was an entirely voluntary p
lan, and that it would have no impact on the Social Security tax. Retirees who chose to participate in Bettercare would be covered for hospital bills, doctor bills, and selected patient services. The projected cost to the government would be $3.4 billion per year. The payroll tax would not finance any of the benefits in the Byrnes bill; the federal government would pay two-thirds of the cost through income tax revenues, while participants would match the federal contribution with what Byrnes called a “premium,” but what might just as accurately have been called a tax.
Byrnes’s proposal did not come out of left field. The Wisconsin Republican was a business-friendly Republican who represented a largely middle-class constituency in the rural Eighth District, though his constituency did include the cities of Green Bay and Appleton. Many considered Byrnes to be one of the smartest and most honest legislators in Congress, a fitting complement to Wilbur Mills. On social policy, he was relatively liberal, having been deeply influenced by his college course work with liberal labor economists at the University of Wisconsin, from which he graduated in 1936. Byrnes was also extremely proud of his state’s progressive heritage.
Like Mills, Byrnes wanted to protect Social Security from the costs of health care. His bill was an effort to keep Republicans in the game when passage of some legislation seemed inevitable. It was also a genuine attempt to promote legislation that he thought was superior to King-Anderson, more generous than what Johnson had proposed. And in many ways, his proposal was more liberal than King-Anderson. His proposal, for instance, covered doctor’s services inside and outside of hospitals, as well as outpatient services. His program would be funded by the progressive income tax system rather than the regressive Social Security tax.58
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