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Medicare for All – Part II

Published in The Journal Record
January 29, 2020

Last month we learned that President Lyndon Johnson needed help with social conservatives to pass Medicare.  Enter United States Representative from Arkansas, Wilbur Mills.

Mills chaired the House Ways and Means Committee which made him a very influential legislator.  He foresaw the likely possibility that if Medicare were passed it would be but a short time before members of his party would demand something similar for the rest of the country.  He devised companion legislation that was dubbed Medicaid to forestall this anticipated desire to expand Medicare to the entire population. 

Mills did several things that were particularly pragmatic and far-reaching.  He suggested that Medicaid should cover certain categories of the poor, particularly those with the greatest public enthusiasm such as pregnant women, children, and the poor elderly.  In addition, he was particularly clever in making Medicaid a joint federal/state program with the states paying roughly half the cost, but also maintaining control over who and what was covered and what providers  would be paid. 

As would be expected, any government program such as Medicare was likely to be opposed by a conservative coalition of conservative Democrats from the south and northern Republicans.  Anticipating this Mills knew that conservatives love programs where the state had considerable autonomy.  Thus, he was able to pull off a hat trick by aligning Medicare and Medicaid together but allowing the states to have considerable control over Medicaid and  significant leverage in how the program would be managed within their state. 

So, in July 1965 Lyndon Johnson signed both the Medicare and Medicaid programs into law – Medicare, an individual tax supported insurance program for the elderly; and Medicaid, a social welfare program funded by the federal and state governments designed to help certain categories of the poor. 

Today Medicaid covers 59% of low-income children.  States pay, in general, 17% of their general fund into the program.  It covers 60% of nursing home residents and 37% of child births.  Mills, therefore, eliminated until this very point in our history the call to expand Medicare to the entire population.  His artful maneuvering of the political system eliminated the desire for a “Medicare for All” program until today, with the Democratic party clearly moving in that direction. 

We must admit that Wilbur Mills was spectacularly successful in avoiding a single payer system for two generations.

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