Prior to 1965, many elderly citizens could not afford care. I think it is important to remember that, and to at least consider the possibility that solons of both major US political parties were not just casting about for another way to bankrupt the nation’s treasury by passing legislation that enabled Medicare and Medicaid.

Despite its popularity with seniors, the disabled, and those who might otherwise have to care for them, Medicare infringes on the right of workers to control their retirement savings and on the freedom of seniors to control their own health care. Medicare has done enormous damage to the U.S. health care sector and to individual liberty.—“Medicare,” 7^th Edition (2009) Chapter 12, Cato Handbook for Policymakers, 7.

How Was Medicare Born?

President Lyndon B. Johnson signed the act enabling Medicare, continuing the efforts of President Kennedy, but the groundwork was begun by Harry Truman.

In 1945, after the Allied victories over the Axis in World War II, President Harry S. Truman submitted to Congress a plan for national health insurance. Congress rejected it and Truman persisted, unsuccessfully. In 1948, at the National Health Assembly Dinner in Washington, D.C., Truman described his reasons for proposing this program, including:

It was also my duty at that time [1922–1932, while serving as Presiding Judge of Jackson County, Missouri—ed.] to see that poor people were properly taken care of from a health standpoint. We had two medical men in that county at that time who devoted their whole time to the health and welfare of those people, who couldn't afford to pay for medical care. We had an excellent county home which had a population on the average of about eight hundred all the time. And Kansas City had a hospital which contained from five to seven hundred, all the time, of people who could not afford medical care in any other way. They were indigent. And I found out with that experience that the people at the indigent bottom of the scale and the people at the top of the scale were the only ones who can afford adequate hospital care and medical care. [emphasis added] And I became vitally interested in that situation.

The Role of the AMA

Many doctrinaire conservatives and libertarians claim that the American Medical Association, or AMA, is guilty of foisting Medicare and Medicaid upon us, resulting in the transformation of the US from a capitalist to a communist, or “statist,” nation. This line of argument charges that the AMA:

• Championed—
  • Medicare
  • Medicaid
  • the State Children’s Health Insurance Program
  • Medicare Part D
• Protects the interests of only one group of doctors (“allopaths,” or drug-healers) as opposed to
  • Herbalists
  • Osteopaths
  • Homeopaths
  • Hydrotherapists
• Is chiefly responsible for state licensing laws that govern who may be recognized as a medical practitioner
• Promoted its own canon for medical training and schools standards

However, in the 1930s and 1940s, the AMA strongly opposed proposals by Presidents Franklin D. Roosevelt and Harry S. Truman for universal health or national health insurance. (Neither President was successful in his attempt to shape this area of public policy.) AMA representatives went so far as to call Truman White House staffers “followers of the Moscow party line.”

Medicare

Medicare is a social insurance entitlement program administered by the federal Centers for Medicare and Medicaid Services (CMS). Originally restricted to citizens age 65 and older, eligibility as well as provided services have been expanded by Congress and successive Administrations since the enabling legislation was signed by President Lyndon B. Johnson in 1965.

Funding

Medicare is partially funded by income taxes assessed under the Federal Insurance Contributions Act and the Self-Employment Contributions Act of 1954. Other funding sources are copayments and coinsurance contributions by participants.

Eligibility

People are eligible to participate in the Medicare program if they are:

• US citizens
  • Orhave been permanent legal residents for five continuous years
    • And they are 65 years or older
  • Orthey are under 65, disabled
    • And have received either Social Security benefits or the Railroad Retirement Board disability benefits for at least 24 months from date of entitlement (first disability payment)
  • Or they get continuing dialysis for end stage renal disease
  • Or need a kidney transplant
  • Orthey are eligible for Social Security Disability Insurance
    • And have amyotrophic lateral sclerosis (Lou Gehrig’s disease)

Single-Payer?

Not. Medicare was originally a single-payer insurance program. However, the federal government now allows private insurance companies to participate in Medicare. Private insurance plans such as the Medicare Advantage Plan and so-called Medigap plans are examples of this.

Medicaid

Medicaid is not an entitlement program. It is an insurance program partially funded by the federal government in cooperation with participating states.

• “Cooperation” really means that participating states comply with guidelines and rules established by the federal Centers for Medicare and Medicaid Services; state governments can establish additional requirements and different funding levels as well as outsource management or do it in-house
• Since 1992, all 50 US states have participated in Medicaid

Medicaid is set up to help the indigient and children; Medicaid programs use means-testing to establish eligibility by applicants. The first test that must be passed is proof of US citizenship or status as a legal resident alien.

• Medicaid enrollment is not automatic and not all who are indigent are accepted. Currently, it is estimated that Medicaid reaches only 40% of those who would be eligible. Of these, the majority of Medicaid enrollees are children.
• The federal government provides matching funds to participating states. The levels of funding correspond directly to the state of the economy on the national and state levels, of course. On average, 22% of a state’s budget is expended for Medicaid (this includes the federal government’s contribution).
• Up to 60% of skilled nursing home residents are Medicaid enrollees; Medicaid also provides payments for up to 37% of US childbirths*.

Health Care Makes for Strange Bedfellows?

Yes. Federal health programs have splintered conservatives and liberals alike. For instance, US Senator Orrin G. Hatch, a solon suspected of conservative views, became a pariah to some of his fellow Republicans for teaming with US Senator Ted Kennedy to co-sponsor the State Children’s Health Insurance Program.

Basically, some conservatives believe that any federal involvement in health care is too much while some liberals believe that any federal involvement in health care is too little, by definition.

Questions for Doctrinaire Conservatives

• Does the federal government have any responsibility for the public health?
• Would the public be better served if no state imposed professional standards through licensing?
• Would an unfettered market for medical services provide better coverage for wealthy and poor alike?
• Would waste, fraud, and abuse disappear if health care services are governed only by an unfettered marketplace for those services?
• Would citizens be able to afford medicines if the federal government provided no financial or physical support for medical research?
• Did citizens have better and cheaper access to safe drugs before 1905, when the federal Food and Drug Administration was created?

Questions for Doctrinaire Liberals

• Are federal and state government agencies better able to decide for citizens their health care options?
• Given the US Constitution, are there limits to the reach of the federal government within the various states?
• Would larger federal insurance programs better control medical costs for citizens?

Observations

Businesses and governments establish rules, regulations, and guidelines to protect their funds and assure their proper use. However, the increasing web of inter-relating rules creates its own environment to foster waste, fraud, and abuse as well as confuse participants and allow them to be hit by unexpected costs.

For instance, my 88-year old mother recently had surgery to replace her left shoulder. She knew that her left arm would be immobilized for up to six weeks, and she knew that she would be unable to perform many every-day functions, including bathing and dressing, on her own with her arm immobilized. So, she chose to enter a local in-patient rehabilitation center. Medicare and her private insurance plan covered the costs of her surgery, post-operative care, and the in-patient rehabilitation center. The hospital arranged for her transportation to the rehab center, so she went in the ambulance they arranged.

She has been billed over $500 for a 15-mile transport that is not covered by Medicare. No one told her this was an option; I was there and know this. I also know that I could, and would, have driven her to the rehabilitation center. I wasn’t given the option.

Conclusion

A federal health insurance program made sense in 1948 and during the 1960s. Costs were much lower and more manageable. However, establishing that pool of money drove doctors and others to find means to expand their access to it. My family doctor in the 1960s had his own practice; he made house calls and carried drugs with him. Today, doctors and surgeons work for companies; the corporation and the insurance companies backing them make decisions regarding how much time to spend with each patient and how many patients a doctor must see each billing cycle (a.k.a. “work day”). Attempts to “reform” the system result in more rules, regulations, and guidelines designed to ensure more careful stewardship of taxpayer and patient funds, but that also result in increased costs.

Costs have expanded exponentially, even though the billing rate for a procedure and the Medicare assignment for that procedure are radically different. (In my mother’s case, two different anaesthesiologists billed her insurance plans $1,800 each for their time during her surgery. Both doctors were present at the same time during the same surgery; each billed the same amount for the same time. However, Medicare allowed about $300 for each.)

This system is insane! I don’t feel less free because of federal or state intrusion into health care. If not for government, most citizens would be unable to afford health care. Period. I feel that the pigs at the troughs are wrecking the system, eating it out from within with little or no concern for the public weal.

I think that the real issue lies with the nature of the program—it’s insurance; it provides a pot of money of which others can take advantage. If those intended to benefits actually benefit, well, that’s good, but it is apparently a secondary mission to that of handing out more money.

There has to be a better way of providing for the national health.