Medicare/Medicaid was the single largest healthcare mandate. After 8 failed attempts at compulsory national healthcare Obamacare was born…

from Medicare to Obamacare...

By 1958, nearly 75% of Americans had health insurance. Under the Eisenhower Administrations of 1952 – 1960 no serious government-sponsored health proposals were put forward. There had already been four attempts at passing nationalized health insurance, 1915, 1935, 1944, and 1945, all them defeated by the AMA, health insurance companies, and unions. The proponents of nationalized health care realized they would have to approach it in an incremental fashion – and they began by focusing on the elderly.

Focusing on the elderly allowed the proponents to overcome several criticisms. The main concern was that nationalized health insurance would provide health care to individuals already able to pay for it themselves. Seniors are generally on a fixed income and in poorer health. The AMA was also concerned that nationalized health insurance would encourage extensive – and unnecessary – utilization of medical services. So, they put forth proposals to only cover hospital services.

President Kennedy championed Medicare [5TH attempt at National Health reform], but again faced tremendous obstacles from several sides which stymied any effort to pass his legislation. He could not find the political support for passage of Medicare during his presidency. In late 1963, the legislators began to process Medicare once more in anticipation of executive sessions in the spring of 1964. However, the hearings were interrupted by an event that would greatly alter the political climate of the country, and the course of history-the assassination of President Kennedy, on November 22, 1963.

One of the many consequences of that tragedy was a surge of public support for the martyred President's legislative program. President Johnson moved quickly to capitalize on these sentiments [6th attempt at national health reform]. In his first speech to Congress, he mentioned Medicare as one of his top priorities. True to politics, the idea of Medicare was unpopular with the majority and after several attempts to pass it in the House-Senate, it was considered to be hopelessly deadlocked on October 2, 1964.

The reelection of President Johnson in 1964 was the largest plurality in history, carrying in on his coattails the biggest congressional majorities since the New Deal days. Chairman of the House Ways and Means Committee, Wilbur Daigh Mills, finally said, "I can support a pay-roll tax for financing health benefits just as I have supported a payroll tax for cash benefits," thus ending one of its major opponents. On March 23, 1965, the Ways and Means Committee passed the bill and on April 8 the bill passed in the House. The Senate passed a much modified version on July 9 and the final bill was approved in the House and Senate on July 27 and 28, respectively, and signed into law by President Johnson on July 30, 1965.

This same Social Security Amendment from July 1965, also created Medicaid. While Medicare was aimed at the seniors, Medicaid was enacted as a means-tested, federal-state program to provide medical services to the indigent. The state decides eligibility and benefits using the federal government’s minimum standards. Thus, benefits and eligibility vary widely across states.

Medicare and Medicaid had two immediate effects: First, they enlarged the U.S. health care market. Second, they altered the composition of health care spending. The share of out-of-pocket spending decreased. The combined effects generated sharp increases in the price of health care.

This increase spurred more legislation. President Nixon imposed wage and price controls in 1971 and in 1972 established Professional Standards Review Organizations to limit expansion of Medicare costs. In 1973, the government sought a managed care solution by passing the Federal HMO Act (the intent was to encourage creation and proliferation of nonprofit operations through federal grants and loans. In 1981, 90 percent of all HMOs were nonprofit), and in 1974 attempted to limit the growth of hospitals and other facilities under National Health Planning and Resources Development Act [7th attempt at national health reform]. The Employment Retiree Income Security Act (ERISA) was established in the same year. This allowed employers to design their own coverage packages and refuse to cover things like in vitro fertilization or to satisfy state requirements for minimal mental health coverage.

1982, we had endured double-digit increases in health care spending for 17 years. During the 50s and 60s we could absorb the rising costs, but lackluster growth and the erosion of middle-class incomes left Americans looking for a new solution to health care inflation. A backlash against liberalism brought us Ronald Regan in 1980. In the early 80s the aid to support nonprofit operations of HMOs was eliminated and many converted into for-profit (by 1986 59% were for profit).

In 1983, President Regan began restricting reimbursements for doctors and expanded the insurers’ ability to establish “reasonable and customary” fees. He also switched plans to “capitation” instead of fee-for-service.

1992, Bill Clinton made health care reform a cornerstone of his presidential campaign. Hillary Clinton headed a Task Force on National Health Care Reform. A plan for universal health care was introduced as the Health Security Act on November 20, 1993 [8th attempt at national health reform]. The Clinton plan unfortunately failed in congress and the alternative Medical Savings Account plan was introduced.

On Dec. 8, 2003, President George W. Bush greatly expanded Medicare by signing the Medicare Modernization Act, which established a prescription drug benefit. This, Medicare Part D, went into effect in 2006

The lesson in all of this is that the American health care delivery system is constantly evolving in response to a changing economic and political landscape. During the boom times of the 1950s and 1960s, liberal advocates of health rights tended to argue for greater access to care and increased protection against the costs of illness. And they succeeded in expanding access to care because tax revenues were rising, profits were strong and productivity was increasing. But when the economy weakens, it sets up a conflict between the liberal critic’s demand for equality and access to care and the concern of government and business to control costs (Starr, 1982). This occurred with the jobs crisis of the 1980s and 1990s, and it “translated into a severe instability of health insurance coverage” (Nayeri, 1995, p. 58). Since 2001, soaring health care costs and a jobless economic recovery have intensified the internal contradictions of the employer-based system of health care provisioning.

Next, the cost of government health care...