Social Security Amendments of 1965

In 1935, when President Franklin D. Roosevelt signed the Social Security Act, medical benefits were left out of the bill. The committee that Roosevelt appointed to study issues related to Social Security wanted to include health insurance in the bill. However, the committee was concerned that amending the bill to include health insurance would kill the entire bill.[1] Harry Truman took on the idea of national medical care and tried to integrate it into his Fair Deal program. Truman's attempts were also unsuccessful, though during his presidency the fight for national medical care became specific to the aged population.

Once the targeted age was decided, a lengthy debate began over presenting a coherent medical care bill to Congress. The Conservative coalition dominated the House Ways and Means Committee, which complicated attempts to pass social health programs. Wilbur Mills (D-AR), chair of the committee, later played a role in creating the health care program that was integrated into the Social Security Act.

In 1960, the Kerr-Mills Act created the Medical Assistance for the Aged (MAA) program which gave states the power to decide which patients needed financial assistance. The federal government would provide matching funds to the states for the program. Some states did not participate or abide by the Act.[2] Another preliminary bill, the King-Anderson Bill, was introduced in 1962. Under it, some hospital and nursing home costs for patients 65 and older would have been covered. Although this bill was defeated in committee, the vote was narrow (12–11), signaling a shift in attitudes.

With the election of Lyndon B. Johnson in 1964, Democrats controlled both the Presidency and the Congress, claiming a 2:1 ratio to Republicans in the House and 32 more seats in the Senate. The Democrats in the House Ways and Means Committee shifted away from Southern Democrats, making the committee more sympathetic towards health insurance reform.

Those who had previously worked on the King-Anderson Bill drafted a new bill providing coverage of the aged, limited hospitalization and nursing home insurance benefits, and Social Security financing. Wilbur Cohen, Assistant Secretary for Legislation of the Department of Health, Education and Welfare (and later Secretary), pushed the Medicare bill. Cohen convinced Johnson to give the bill high priority, and Johnson declared its importance to his Great Society program. The bill was introduced as companion bills,[3] H.R. 1 and S. 1, given the numbers as the first bill introduced in each House of the new Congress.

The groups previously opposed to the legislation switched their focus from opposing the bill to creating new versions of it. As a result, three forms of the bill emerged: John Byrnes', the American Medical Association's, and the administration's bill (known as Medicare). Byrnes was a Republican committee member who proposed that doctors' services and drugs be financed; participation in coverage would be voluntary for the aged. If an elderly patient did need the help, his or her financing would be "scaled to the amounts of the participant's Social Security cash benefits" and the financing would come from the government's revenues. The AMA proposed Eldercare, which provided government financing for physician's services, surgical charges, drugs, nursing home costs, x-ray and lab services. When brought back to the Ways and Means committee, three bills were presented: Byrnes,' Eldercare, and Medicare.

When deliberations began in 1965, both AMA members and their suggestions were rejected. Wilbur Mills, the chair of the Ways and Means committee, suggested combining Byrnes' ideas and Medicare. His committee took on the task of drafting H.R. 6675, the bill that ultimately became law. In combining the two bills, John Byrnes's suggestion, which included lower taxes, had to be altered as higher taxes were necessary for the program's predicted costs. The Ways and Means Committee reported favorably on the new bill to the full House of Representatives on March 29 after a straight party committee vote of 17 to 8.[4]

During debate on the House floor, Republicans offered a substitute bill that would have made participation fully voluntary. It was narrowly defeated 236 to 191, with 128 of 138 Republicans in favor of the substitute. H.R. 6675 was passed in the House on April 8, 1965 by a vote of 313 to 115.[4]

The biggest threat to the passage of H.R. 6675 in the Senate came from liberal Democrats who were eager to expand coverage of the bill. As amended and passed in the Senate on July 19 by a vote of 68 to 21, H.R. 6675 would have cost approximately $800 million more than the House-passed bill.[4]

The bill went to conference committee where Representative Mills worked to eliminate practically all of the Senate amendments. The bill went through more than five hundred amendments before being passed by majority vote in the House (307–116) on July 27 and in the Senate on July 28 (70–24).[5]

The legislation made two amendments to the Social Security Act of 1935. Title XVIII, which became known as Medicare, includes Part A, which provides hospital insurance for the aged, and Part B, which provides supplementary medical insurance. Title XIX, which became known as Medicaid, provides for the states to finance health care for individuals who were at or close to the public assistance level with federal matching funds.

On July 30, 1965, President Johnson signed the bill, making it Public Law 89-97. The signing took place in Independence, Missouri and was attended by Harry S. Truman. Johnson credited Truman with "planting the seeds of compassion and duty which have today flowered into care for the sick and serenity for the fearful". Implementation of the amendments required extensive data processing and the re-configuration of hospital policies nationwide.[6]